The Trump administration is trading over $10 billion dollars of taxpayer money for ownership stakes in companies in what Ana Swanson in The New York Times calls an "unusual strategy."
A New York Times analysis has found that "the government’s growing portfolio of corporate ownership involves minority stakes, or the option to take them in the future, in at least nine companies involved in steel, minerals, nuclear energy and semiconductors."
These deals, Swanson writes, were all made in the past six months, with the "bulk" being done in October and November.
"The effort appears mostly driven by national security concerns, particularly a desire for the government to prop up strategic industries and lessen America’s reliance on foreign countries like China for key resources," she writes.
And while some officials hope it will be a "windfall for taxpayers," Swanson says, "the likelihood of that is unclear."
What is clear, however, are concerns being raised by what Swanson calls "the unusual government intervention into the private market."
Those concerns include "the opacity of the process, the potential for favoritism, corruption and market distortions, along with the possible loss of taxpayer funds should the investments fail," she writes.
Aaron Bartnick, a fellow at Columbia University and a former Biden White House official, says these deals provoke serious questions.
“In the absence of a clearly articulated strategy,” he says, “this could just devolve to arbitrary deals that favor friends or disfavor foes.”
Swanson notes that while previous administrations "have tried to speed the development of sectors like semiconductors and clean energy with grants, loans, tariffs and other policies ... taking equity stakes in companies is incredibly rare."