The White House Shakedown of the Defense Industry

5 minutes read time.

In a move that would have been considered unfathomable by a generation of free-market conservatives, the Felonious Punk administration has appointed itself the de facto “chairman of all boards” of corporate America. This week, that unprecedented power grab has taken its most dangerous and alarming turn yet, with the administration openly declaring that it is “thinking about” taking equity stakes in the nation’s most critical defense contractors, including giants like Lockheed Martin and Boeing. This is not a strategic investment or a coherent industrial policy. It is, as one conservative economist bluntly put it, an “opportunistic display of corporate shakedowns.” The threat against the defense industry is the logical and terrifying culmination of a pattern of behavior, a new chapter in American capitalism where the power of the federal government is being wielded as a weapon to force private companies into deals that serve the president’s personal and political agenda, not the interests of national security or the health of the economy.

The Intel Precedent: Anatomy of a Shakedown

To understand the threat now facing the defense industry, one must first look at the playbook perfected just last week with the chipmaker Intel. The company, which has struggled with production delays and has lost ground to international competitors, was in a position of profound vulnerability. It was dependent on the final, $8.9 billion tranche of funding from the bipartisan CHIPS Act, a program initiated under the Biden administration to onshore critical semiconductor manufacturing. The Felonious Punk administration seized on this vulnerability. First, it applied personal pressure, with the president publicly attacking Intel’s CEO over his past business ties to China. Then came the deal. As the president himself explained, “People come in and they need something.”

What Intel needed was the CHIPS Act money. What the Felonious Punk demanded in return was a 10 percent equity stake in the company, acquired at a sharp discount. The administration also stripped away the Biden-era protections that had tied the funding to specific manufacturing milestones, giving Intel the cash immediately in exchange for the shares. This was not a negotiation between partners; it was a shakedown. The president’s own words confirm the transactional, almost predatory, nature of the arrangement: “I hope I’m going to have many more cases like it,” he declared.

The New Target: The Military-Industrial Complex

With the Intel playbook established, the administration has now turned its sights on an even more critical sector. In an interview on CNBC, Commerce Secretary Howard Lutnick confirmed that top Pentagon officials are now actively considering taking equity stakes in defense contractors. His justification was a thin and almost laughable pretext about finding new ways to “finance our munitions acquisitions.” But his follow-up statement revealed the true ideological underpinning of this move: “Lockheed Martin makes 97% of their revenue from the U.S. government,” Lutnick declared. “They are basically an arm of the U.S. government.”

This is a radical and dangerous re-framing of the relationship between the state and the private sector. It is a declaration that any company that relies heavily on government contracts is no longer a private entity, but a de facto state-owned enterprise that can be treated as such. The message to the defense industry is clear: the administration views you not as a partner to be regulated, but as a subsidiary to be controlled.

The Dangers of a State-Controlled Defense Industry

The risks of this unprecedented fusion of state and corporate power are profound and multifaceted. As William Hartung of the Quincy Institute warned, it creates a massive conflict of interest that could “incentivize the government to put financial success for Lockheed Martin ahead of more important strategic considerations.” The government cannot be both the primary customer, the regulator, and a major shareholder of a company without creating a hopelessly compromised system. The “healthy distance” required for effective oversight would be completely erased.

This move also threatens to inject a lethal dose of political uncertainty into a sector that relies on long-term stability. As conservative critics like Scott Lincicome of the Cato Institute have argued, the most immediate risk is that these companies’ decisions “will increasingly be driven by political rather than commercial considerations.” Innovation, efficiency, and market agility would be sacrificed in favor of political appeasement. The result would be a less effective, less innovative, and more expensive defense industrial base, a direct threat to American national security. The move has even drawn fire from staunch conservatives like Senator Rand Paul, who correctly identified it for what it is: “If socialism is government owning the means of production, wouldn’t the government owning part of Intel be a step toward socialism?”

A New, Corrupt Bargain

The Felonious Punk’s threat to take a stake in the nation’s defense industry is the most dangerous manifestation yet of his “chairman of all boards” governing philosophy. It is a move that would shatter the norms of American capitalism, create massive conflicts of interest, and potentially undermine the nation’s security, all in the service of a president’s desire to “make deals” and exert personal control. It is a new and corrupt bargain, where the price of a government contract may soon be a piece of the company itself. The administration has established a “Pay-to-play” system, and for the defense industry, the price of admission may be their own independence.