Another day, another batch of federal “investments” in private companies. The Commerce Department distributed $389 million in funds earmarked for R&D to four companies working on semiconductor components and critical materials, taking a minority stake in each one of them.
That brings the number of semiconductor firms partly owned by taxpayers to 15. And it brings the total number of federal stakes across all industries to the big four-oh.
Under the Trump administration, taking stakes used to be an ad hoc thing. Now, it’s official policy. Federal agencies give out grants and loans, and sometimes just favors, in exchange for companies’ shares. None of the money was appropriated with the intent of receiving equity, so there is no legal basis for any of these positions. That makes the whole mess harder to unwind.
I won’t provide an update every time the administration expands its portfolio, as that would probably take up most of my time. But interested readers should follow the Cato Institute’s Government Ownership Dashboard, which is continuously updated with new announcements. See how, in just over a year, the number of federal non-emergency stakes in private companies has gone from zero to 40.
One can also read my magazine piece from June on how federal stakes distort both sound governance and economic decision-making, ultimately leaving Americans worse off.