In one of the Trump administration’s most underreported moves, the White House has spent the past two years taking ownership stakes in private companies to bolster sectors it considers strategic and secure a financial return for taxpayers rather than simply handing out subsidies. If you hate crony capitalism or oppose government moves toward socialism, this should concern you, because it's exactly that. It has been happening right in front of us, yet few conservatives have made a fuss.
Not only has the federal government acquired such stakes in now over 40 companies, new provisions in the fiscal year 2027 National Defense Authorization Act (NDAA) would authorize the Department of Defense and other agencies to acquire equity stakes in private companies.
But a broad coalition of pro-free-market organizations is pushing back. In a letter to the House and Senate Armed Services Committees, the group urged lawmakers to remove those provisions, warning that allowing the government to continue taking ownership stakes in private businesses would set a dangerous precedent.
NEWS: Broad coalition of right-leaning and free market groups warn that "continued federal investment in private companies is deeply troubling and sets a dangerous precedent for the future." They oppose a provision in the NDAA that would allow the seizure of more equity stakes. https://t.co/d1q1uLUdGz
— Eric Boehm (@EricBoehm87) November 10, 2026
"As the Senate and House Armed Services Committees negotiate a final version of the Fiscal Year 2027 National Defense Authorization Act, we the undersigned organizations and individuals from across the political spectrum urge legislators to set aside provisions that would authorize the Department of Defense (DOD) or other agencies to acquire equity stakes in private companies. This proposal would have serious consequences for the rule of law and for our national security," the letter read.
On a fundamental level, government ownership of private entities impedes independent decision making by both the government and private companies. This risks creating dangerous conflicts of interest that could impact future contracting decisions and put financial interests ahead of security imperatives. Federal investment likewise undermines Congress’s power of the purse and flouts the possibility of independent oversight and accountability—a critical facet of our democracy and congressional authority.
National and economic security demands a dynamic and nimble defense industry. Government favoritism preserves neither, impeding innovation and perpetuating inefficiencies instead. What is considered “critical” may change over time, and both the Pentagon budget and industrial sector must respond to that. Washington has a poor record of picking winners and losers. The federal government already has tools to effectively address perceived market failure and procure necessary technology, components, and materials through traditional appropriations, acquisitions, loans, and grants. Though these methods are imperfect, the government favoritism that may result from ownership of equity stakes in private companies would make it even harder for start-ups (and even established contractors) to compete.
"Whether through executive action or congressional sanction, continued federal investment in private companies is deeply troubling and sets a dangerous precedent for the future in which the full force of government ownership could be used to execute partisan, moral, or philosophical agendas in the marketplace," the letter concluded. "Enshrining this practice into statute would deal a serious blow to our security and democratic institutions."
The letter’s signatories included Americans for Prosperity, the Competitive Enterprise Institute, the National Taxpayers Union, Concerned Veterans for America, the Taxpayers Protection Alliance, and the R Street Institute, as well as Douglas Holtz-Eakin of the American Action Forum and Kevin Kosar of the American Enterprise Institute.
Whether the House and Senate Armed Services Committees will heed the warning remains unclear.
But as the letter points out, we have plenty of examples, in the United States and abroad, of governments deciding to bolster specific sectors. Those examples should give pause to anyone who wants the United States to remain true to its founding principles.
How did government control of the economy work out in communist Russia or China under Mao? Catastrophic repression, famine, and mass death. In Venezuela? Economic collapse, widespread poverty, and hyperinflation. And in Spain under Francisco Franco? Economic isolation, shortages, famine, and repression. In fascist states, government-directed economies served militarization and expansion while political leaders crushed individual freedom. China today offers another example of a government that permits private enterprise but demands that it remain subordinate to the ruling party.
The government cannot keep expanding its control over economic decisions without expanding its control over the people making them. At some point, private businesses are no longer free to pursue their own goals; they are expected to serve the government’s priorities, all in the name of the greater good.
Conservatives need to recognize that danger, not excuse it because their own party is in charge.
