This week, the Trump administration announced it's expanding its stake in semiconductor manufacturer GlobalFoundries. This brings the government's share of the company to over $2 billion, according to President Donald Trump, and it's only one of roughly three dozen companies in which this White House has acquired a piece of the action. This is a disturbing development for Americans who favor free enterprise and don't want the government to control the means of production.

While it may be a while before the opportunity arises to roll back state intervention in the economy, given the drift of both major parties away from faith in the marketplace, the Cato Institute has launched a project to get the process started.

$2 Billion Government Stake in One of 35 Once-Private Firms

"The U.S. Department of Commerce will receive equity in GF of approximately four percent, further enabling the American public to share in GF's growth," GlobalFoundries announced Monday in a press release about a U.S.–Japanese initiative to open two new semiconductor manufacturing facilities.

"This brings our total Investments to 1.63 Billion Dollars, and now, the U.S. Government's stake is worth over 2 Billion Dollars," Trump confirmed on Truth Social.

The announcement's triumphant tone isn't necessarily shared by people who wonder what the government's ownership stake in one company will do to regulation and investment in the industry. Will fully private firms challenging a state-backed player experience an even playing field?

In a July CNBC survey of 1,000 U.S. voters, 49 percent of respondents said it is "not appropriate for the federal government to own a portion of a U.S.-based company." Nineteen percent considered it appropriate, and 32 percent had no opinion.

"Washington's expanding involvement in the businesses it regulates threatens the competition and innovation that underpin American prosperity," warns the Cato Institute's Tad DeHaven on the launch of the Restoring Free Enterprise project. "Our project will examine the consequences of that involvement and chart a path toward getting Washington out of the boardroom."

Restoring Free Enterprise's Government Ownership Dashboard shows the U.S. government owning shares in 35 companies. The recent deal with GlobalFoundries comes on top of an earlier equity stake, giving the government 7 percent ownership of the firm. Other big deals include an 8.4 percent stake in Intel, a claim on 20 percent of distributions above $17.5 billion in Westinghouse, and an arrangement granting the U.S. government the right to appoint a director for U.S. Steel and to veto decisions over matters including investment and production.

Why might this be a problem?

When Government Enters the Market, Competition Is Undermined and Decisions Politicized

In an analysis for the Center for Strategic and International Studies, Sujai Shivakumar, Charles Wessner, and Christina Tutino cautioned that direct government ownership could create "conflicts between the role of the government as an investor in a particular company and its role as a regulator (e.g., regarding export controls) of firms across the wider industry." They added that preferential treatment for state-linked forms could "distort competition, stifle innovation, and potentially lead to monopolies or market concentration in strategic sectors."

"Once government crosses the line into equity ownership, the game changes," agreed economist Vance Ginn in a 2025 piece for the American Institute for Economic Research. "It's no longer about setting fair rules of the road—it's about Washington joining the race as a participant. That undermines competition, politicizes corporate decisions, and exposes taxpayers to risks they never agreed to take."

Basically, when the government gets involved in any industry, it complicates matters for the companies in which shares are held, for competitors who must worry that regulators will put their thumbs on the scale to help favored firms, and for the market in general. Overall, government interference of any sort in market transactions does more harm than good, and direct ownership makes things even worse.

"Federal rate controls, excessive taxes, barriers to restructuring, and rigid labor rules weakened private railroads in the mid-20th century, just as automobiles, buses, trucks, and airlines were intensifying competition," Cato's Chris Edwards points out in a case study for the Restoring Free Enterprise Project. Congress then created Amtrak to maintain the passenger train service its red tape had helped strangle, but despite plans for the railroad to be self-sufficient, "it has never earned a profit and has received tens of billions of dollars in subsidies."

Proposals for Reform, but Is Anybody in D.C. Interested?

The project acknowledges the Trump administration's intention to encourage U.S. manufacturing and to meet strategic defense goals. But it points out that private, profit-seeking firms are what made the U.S. prosperous and dominant in so many fields to begin with. The government should get out of the way of the market if it wants the country to continue to thrive.

As alternatives to state ownership of companies, Restoring Free Enterprise proposes permitting and regulatory reforms that "shorten reviews, remove unnecessary requirements, reform the Jones Act, and recognize out-of-state licenses" for workers. The project also recommends free trade agreements that reduce barriers to international commerce, the removal of export and procurement barriers, tax reforms involving expensing, and immigration reforms that simplify processing and make it easier for foreign-born college graduates to remain in the U.S.

The obstacles to implementing these reforms are substantial. The administration, while criticizing the Democratic Party's growing affection for socialism, itself embraces government ownership of companies, mercantilism, and heavy state intervention in economic decisions and activities. The Democratic Party has long been less market-oriented than the Republicans, and despite the GOP's transformation, a growing share of Democrats are openly socialist advocates for state control.

"American political leaders on the left and right are rebelling against the market-first consensus that dominated Washington for four decades," concluded Axios's Courtenay Brown and Neil Irwin in July. "It's evident in everything from the Trump administration taking government stakes in dozens of private companies to socialist candidates winning Democratic primaries promising a more active government role in the economy."

U.S. politicians are happily adopting damaging policies that are at odds with the country's prosperity-building tradition of free markets. The Restoring Free Enterprise project would reverse that unfortunate trend, but it's not obvious that many people in D.C. are interested in joining the fight.

The post As D.C. Embraces State Economic Control, a Hopeful Project Seeks to Restore Free Enterprise appeared first on Reason Magazine.

The Republican congressman who hopes to be the next governor of Michigan has a plan to help American businesses hurt by President Donald Trump's tariffs.

Is he proposing to abolish those tariffs? Hahahaha, oh please. 

Instead, Rep. John James (R–Mich.) has introduced a bill that would use some tariff revenue to offset the economic harm being caused by…the tariffs.

James' proposal, the Tariff Relief for American Development and Employment Act of 2026, would create a new tariff relief fund to be accessed by American businesses that "demonstrate actual tariff-related economic injury."

"Michigan is disproportionally affected by the trade war, so it's reasonable to use tariff revenue to reduce the effect on Michigan businesses and workers," James said in a statement announcing the legislation.

To qualify for the money, businesses would also have to pledge to maintain existing production and employment levels. The bill instructs the Treasury Department, which would administer the fund, to give priority to businesses with larger numbers of American workers and those that avoid layoffs and boost worker pay.

In other words: Pay the tariffs first, then do a bunch of paperwork and cross your fingers that the bureaucrats at the Treasury decide that you qualify for reimbursement. And in the meantime, don't cut production or lay off workers—things a business might naturally do in response to a new tax burden—or the federal overseers might not favor you.

"You guys remember when Republicans used to criticize Democrats for imposing costly, convoluted taxes and then giving some Americans their own money back?" asks Scott Lincicome, vice president for general economics at the Cato Institute, in response to James' proposal. Indeed.

For that matter, remember when Republicans understood that concentrating more economic decision-making power in Washington wasn't the way to help American businesses? This bill requires businesses to jump through a series of hoops—a process that will add more costs and complexity on top of the tariffs—and creates more incentives for executives to work harder at currying favor in Washington rather than succeeding in the marketplace.

The fact that James is running for governor in Michigan—and trailing in the polls—likely sheds some light on his motivations here.

This does not seem like a bill meant for Congress to seriously consider or pass. In all likelihood, it exists solely so James can tell voters in Michigan that he's trying to ease the pain caused by Trump's tariffs—which are deeply unpopular and increasingly seem to be strangling the GOP's prospects in the midterms.

In Michigan, manufacturing employment has declined since April 2025, when Trump launched his second-term tariffs on what the White House dubbed "Liberation Day." Meanwhile, Michigan households have paid more than $23 billion in tariff-related costs since January 2025, according to a tracker maintained by the National Taxpayers Union Foundation.

By acknowledging that the tariffs are hurting businesses in Michigan, James becomes the latest Republican to openly break with the president over his signature policy. Former congressman Mike Rogers, who is running for Senate in Michigan, has TV ads calling for an end to what he calls the "tariff war."

It is good that Republicans are finally admitting the reality of the tariffs. Study after study has shown that the import taxes are imposing costs on American businesses and consumers. Last week, the New York Federal Reserve concluded that the average price of 67 common household goods would have fallen over the past year, if not for the tariffs. Instead, those prices increased by about 3 percent.

Fixing that requires repealing Trump's tariffs, rather than constructing a new labyrinthine process for funneling some of the tariff money back to certain businesses.

James' bill is a deeply silly proposal, but there's also something quite pathetic about this. James is, after all, a member of Congress. You know, the branch of government that the U.S. Constitution vests with control over trade and tariffs. You don't need to build a bureaucratic Rube Goldberg machine to "reduce the effect [of tariffs] on Michigan businesses and workers."

You just have to do your constitutionally appointed job and tell the president that he can't unilaterally raise taxes on Americans whenever the mood strikes.

The post Michigan Congressman Proposes Using Tariff Revenue for Tariff Relief Fund appeared first on Reason Magazine.

Governments have spent decades issuing dietary guidelines, sponsoring public health campaigns, and encouraging consumers to cut back on sugary, salty, and fatty foods. Now they're moving beyond persuasion and adopting more aggressive measures to influence what people eat.

In an October 8 article titled "Nagging People to Eat Healthily Does Not Work," The Economist describes a growing international movement to tax unhealthy foods, restrict advertising, require warning labels, and regulate how supermarkets display and promote their products. Such measures are needed, officials argue, because the earlier approach failed to curb rising obesity rates.

The Economist notes, for example, that from 1992 through 2020 Britain adopted 14 national strategies to reduce obesity, comprising 689 individual policies. Most of these sought to educate consumers about healthy eating or improve access to healthier foods. Yet England's obesity rate doubled over roughly the same period.

The article treats the rise in obesity as evidence that these efforts failed, and its framing implies that governments need to go further. But the fact that obesity increased despite these initiatives doesn't tell us whether they were effective. (After all, obesity might have increased even faster without them.) More importantly, it doesn't follow that more intrusive interventions will improve health outcomes.

The Economist article cites a study that attributes Mexico's reductions in calories, added sugar, and saturated fat sold to mandatory warning labels. But these measures reflect changes in food purchases and product formulations, not demonstrated improvements in health. The article provides no evidence that the labeling requirements have reduced obesity, diabetes, cardiovascular disease, or mortality.

And who decides which foods should carry warning labels, face higher taxes, or be restricted in where retailers can display them? The government has a poor track record in providing nutritional advice.

Terence Kealey, Bautista Vivanco, and I wrote a Cato Institute article earlier this year examining the history of federal dietary guidelines. We traced how officials adopted dietary recommendations grounded in scientific theories that were contested from the outset and inadequately supported by experimental evidence.

In 1977, the Senate Select Committee on Nutrition and Human Needs issued Dietary Goals for the United States, urging Americans to reduce fat and cholesterol intake while increasing carbohydrate intake. The recommendations reflected the prevailing hypothesis that dietary fat and cholesterol were major causes of cardiovascular disease.

But the evidence was far from conclusive. Researchers had challenged the correlations underpinning the hypothesis, and randomized trials available at the time had failed to show a mortality benefit from reducing dietary fat. The American Medical Association warned in 1977 that the evidence supporting universal dietary goals was inconclusive and that the recommendations could have harmful consequences.

Nevertheless, federal officials pressed forward.

For decades, government dietary guidance encouraged Americans to limit cholesterol-rich foods, including eggs and shellfish. It wasn't until 2015 that the Dietary Guidelines Advisory Committee concluded that dietary cholesterol was no longer a nutrient of concern for overconsumption.

Meanwhile, the campaign against dietary fat coincided with—and may have contributed to—significant shifts in American eating habits. According to the U.S. Department of Agriculture (USDA), from 1970 through 2003 per capita availability of grains rose by 43 percent, while added fats and oils rose by 63 percent. A separate USDA report found that per capita consumption of whole milk declined by 70 percent over that period, while consumption of lower-fat and skim milk increased by 140 percent. The USDA attributed this shift to warnings about saturated fat. Even after scientists raised concerns about trans fats, federal dietary guidelines continued to favor margarine over butter. Some margarines contained partially hydrogenated oils, which the Food and Drug Administration (FDA) later determined were no longer generally recognized as safe because of their cardiovascular risks.

These trends don't prove that government dietary advice caused Americans to change their diets. But government recommendations can influence what manufacturers produce and what consumers buy. When these recommendations are wrong, the consequences can be widespread.

Nutritional science is complex, and scientific consensus can shift. Government officials are no less susceptible to error than anyone else. Yet when the government endorses a particular dietary theory, its recommendations carry authority that can discourage competing approaches and magnify the consequences of mistakes.

The latest federal dietary guidelines illustrate this problem. The Trump administration's 2025–2030 guidelines introduced a new food pyramid that places greater emphasis on proteins and fats while discouraging refined carbohydrates. Whatever the merits of those changes, the reversal demonstrates how dramatically official dietary recommendations can shift.

The uncertainty doesn't end with fats and carbs.

Consider the growing campaign against ultra-processed foods. Numerous observational studies link higher consumption of these products to obesity, cardiovascular disease, diabetes, and other adverse health outcomes. Yet researchers have not yet determined precisely which ingredients, additives, processing methods, or combinations of these factors account for many of those associations, or at what exposure levels.

Nor is there universal agreement on what constitutes an "ultra-processed" food in the first place. As Kealey, Vivanco, and I pointed out in another Cato article, the widely used NOVA classification system places a broad range of products in the ultra-processed category, including some fortified cereals and breads that provide valuable nutrients. Researchers have struggled to classify certain foods consistently. A 2025 systematic review identified six different systems for classifying highly processed foods, each with its own criteria.

Even the federal government recognizes the problem. In July 2025, the Department of Health and Human Services (HHS), the FDA, and the USDA announced plans to develop a uniform definition of ultra-processed foods. Their request for information acknowledged that existing classifications can include nutritious foods such as whole grains and yogurt. In August 2026, HHS announced that the agencies had submitted a proposed definition for final review.

Some ultra-processed foods may indeed pose health risks. But broad categories can obscure important differences among products, and observational associations alone cannot tell us which ingredients or processing methods cause adverse health outcomes.

The Economist article reports that Britain is considering a system that would require supermarket chains to meet government-defined nutritional targets across their entire sales. Rather than merely informing customers about nutritional content, the government would make retailers responsible for altering the composition of what consumers buy. Supermarkets could comply by promoting certain foods, discouraging others, or pressuring manufacturers to reformulate their products.

Government nutrition authorities would thus have considerable power to influence what supermarkets sell and what consumers buy. If their nutritional assumptions prove mistaken, the consequences could affect millions of consumers.

Consumers benefit from accurate information about the ingredients and nutritional content of the foods they buy. But providing information is different from using government power to manipulate prices, restrict advertising, or pressure retailers to change what they sell.

Moreover, people have different nutritional needs, preferences, and attitudes toward risk. Some may willingly trade potential long-term health benefits for convenience, affordability, or the simple pleasure of eating foods they enjoy. These are choices individuals are entitled to make for themselves.

That raises a more fundamental issue. Even if officials had perfect knowledge of nutrition, why would that entitle them to dictate the dietary choices of competent adults?

Most people would likely oppose the government compelling patients with hypertension to take their medications, forcing sedentary adults to exercise, or prohibiting people from engaging in recreational activities that pose health risks. Why should eating be any different?

Adults should be free to seek dietary advice from physicians, nutritionists, researchers, or anyone else they trust—and to decide whether to follow it. They should also be free to disregard that advice, even if that might increase their health risks.

The post The Government Doesn't Know What's Best for You. Why Let It Decide What You Should Eat? appeared first on Reason Magazine.