America likes to call itself the land of free markets, where companies succeed or fail on their own. But when it comes to defense companies, that story has always been more complex.
The role of the government under President Donald Trump became more clear. It also shows how closely the state works with major defense companies. The line between the public policy and the private business has become difficult to see than before.
For investors, it does not require bad news. “It shows that the government is pro -business and American companies want to succeed,” investment strategist Josh Coren now told ET. “But of course, no state wants to move on to the boardroom.”
The US has seen this before. During World War II, Washington Shington gained direct control over the industry. The Cold War spent more defense for decades. Coren pointed out, what seems different now, that is that America is not in war – the government’s involvement is still on the rise.
Nevertheless, he argues that this is not a non-American. “The goal is simple: keep the US forward in any future struggle – whether it’s a new fighter jet or artificial intelligence. Falling back is not an option.”
In practice, support is supported by subsidies, loans or direct stakes, the result is the same: billions of dollars flows in companies like Lockheed Martin, Retheon and Northrope Grumman. For investors, that means stability. For critics, it increases the red flag. They worry that excessive government money makes the market less competitive and less honest as the criteria for business success.
This draws attention to a big question: how much “free” the free market? America’s defense sector has always been closely tied to Washington Shington, but Trump’s policies are pushing the relationship further.
Coren sees it differently. “Whether it’s a subsidy or direct capital is being spent on the technology of money that keeps the US forward. From that point of view, it’s a good thing.”
But not everyone agrees. If the government guarantees profits for defense giants, some fear that they can make them less efficient and disappoint new players from entering the industry. What time does a private enterprise start to look like the hands of the government?
For investors, however, the picture is simple: defense stocks feel more secure than ever. With the support of Washington Shington, earnings are inferior and the risks are low. From pension funds to small investors, many view these companies as a solid innings in an indefinite world.
But for the believers of free-market capitalism, the picture is more upset. If Lokhid Martin is now viewed as part of the government, it indicates that the American economy itself is changing. And not just in defense – this can be the beginning of a new playbook where the government and the business are built more tightly than ever.
(Connection: The recommendations, suggestions, opinions and opinions provided by experts have their own. This does not represent opinions of economic time)
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