Apparently, I should be careful with the farfetched hypothetical examples I choose, because the Trump administration will interpret them as suggestions. Back on July 21, in the Morning Jolt, I wrote:
The argument from the Trump administration is that the government simply had to become the largest shareholder in MP Materials and the golden shareholder in U.S. Steel because it’s a matter of security. And they have a decent argument, probably stronger in the first case than the latter. (Although the Department of Defense probably spends close to $500 billion each year in publicly traded companies — Lockheed Martin, Raytheon Technologies, General Dynamics, Boeing, Northrop Grumman, etc. When does a company become important enough to U.S. national security interests that the government ought to have an ownership share in it?)
Commerce Secretary Howard Lutnick on CNBC yesterday:
Top officials at the Pentagon are “thinking about” whether the U.S. should acquire equity stakes in leading defense contractors such as Lockheed Martin, Commerce Secretary Howard Lutnick said Tuesday.
The Cabinet secretary, in an interview on CNBC’s “Squawk Box,” revealed the Defense Department’s interest in taking those stakes days after the U.S. government acquired 10% of Intel stock in a roughly $9 billion deal.
Lutnick was asked if the Trump administration would repeat that move with other companies that do business with the government.
“Oh there’s a monstrous discussion about defense,” Lutnick replied.
Lockheed, which makes most of its revenue from federal contracts, is “basically an arm of the U.S. government,” he said.
“But what’s the economics of that? I’m going to leave that to my Secretary of Defense and the deputy Secretary of Defense.”
“These guys are on it and they’re thinking about it,” he said.
The Trump administration is becoming the biggest and most powerful force expanding the role of government in private businesses in a generation. It makes the prospect of New York City’s government running a couple of grocery stores look like small potatoes.