Washington Doesn’t Belong in the Boardroom | This Week's Economy Ep. 128
From boardroom interference to import taxes, D.C. keeps looking everywhere but at runaway government spending.
Hello Friends!
Many lawmakers have lost sight of the basic economic principles that build flourishing societies. From putting Washington in private boardrooms to imposing tariffs, this administration seems intent on focusing on anything but the real problem: runaway government spending.
Inflation and many of today’s economic woes are made worse by federal deficits that fuel higher interest rates and add relentless inflationary pressure. These challenges won’t be solved by squeezing “revenues” out of private industry or taxing imports. They’ll only be solved by spending less, taxing less, and regulating less.
We’ll break down the latest news on these issues and more in this edition of This Week’s Economy. Catch the full episode on YouTube, Apple Podcast, or Spotify, and visit my website for more information.
1. Washington in the Boardroom?
In the News:
The Trump administration is reportedly negotiating to turn Intel’s $10.9 billion CHIPS Act subsidies into a 10 percent equity stake in the company. If finalized, Washington would rank among Intel’s largest shareholders.
This isn’t the first move of its kind. Earlier this year, the Pentagon took a preferred equity position in MP Materials, the nation’s largest rare-earth mining firm—giving the government direct financial leverage over a critical supply chain. After Nippon Steel’s bid for U.S. Steel, the administration secured a “golden share,” granting Washington veto power over everything from executive pay to plant closures. Officials have also floated proposals for the U.S. to receive direct payments from foreign resource revenues in exchange for trade or security guarantees. Sources: Bloomberg, CBS News, Reuters, and The Times
My Take:
From Referee to Player: The Intel deal is more than a one-off—it signals a broader shift. By taking equity stakes in private firms, government stops being the referee and becomes a competitor. That distorts markets, warps incentives, and leaves taxpayers holding the risk.
The Problem: Some conservatives defend these arrangements as “strategic,” arguing that America cannot rely on foreign suppliers for semiconductors, rare earths, or steel. But when the government blurs the line between capitalism and state management, it undermines competition, politicizes corporate decisions, and shifts risks to taxpayers who never agreed to take them.
The Right Role: Government’s job is to set fair, neutral rules—not hold stock certificates. If conservatives abandon that principle, they hand progressives the blueprint for permanent industrial policy. Washington should cut spending, balance the books, and let markets do what they do best: allocate capital, reward innovation, and drive prosperity.
Related: I break down why Econ 101 shows equity stakes are misguided in The Daily Economy.
2. Unlawful Tariff Taxation
In the News:
A federal appeals court ruled that President Donald Trump’s tariffs unlawfully relied on the International Emergency Economic Powers Act (IEEPA) to impose sweeping duties on imports. The court held that the law does not give the executive branch unilateral authority to levy tariffs. While the tariffs remain in effect under a temporary stay until October 14, the case is headed for likely review by the U.S. Supreme Court. Relatedly, the President signed an executive order suspending the de minimis rule—which allowed small imports to bypass fees—for all U.S. goods. Sources: CNN, NPR,
My Take:
Unconstitutional Tariff Taxation: This ruling is a step in the right direction. Tariffs are taxes, plain and simple—and the Constitution clearly gives Congress, not the president, the power to tax. The Supreme Court now has a chance to reaffirm that no president can impose taxes by executive decree. That would be a win for taxpayers and for constitutional order.
No More Exemptions for Small Imports: Tariffs create a maze of tax policies that distort markets, picking winners and losers while encouraging companies to chase loopholes instead of profits. Removing exemptions like the de minimis carve-out only adds more complexity and cost, rather than solving the underlying problem.
The Real Economic Battle: Tariffs miss the bigger picture. The true threat to our economy isn’t imports—it’s Washington’s runaway spending. Deficit spending fuels higher interest rates and inflationary pressures, as the Fed tries to suppress borrowing costs. America remains the most stable economy in the world, but lasting prosperity requires tackling the root problem: reining in spending, scrapping tariffs, and lowering taxes on hardworking Americans.
Related: I broke down the court’s ruling and joined a panel on NTD News to discuss the real impacts of tariffs—watch here:
3. 800+ Laws Go into Effect in Texas
In the News:
More than 800 new laws passed by the Texas Legislature and signed by Governor Abbott took effect September 1. Highlights include the state’s $338 billion two-year budget, new funding for water projects through the Texas Water Development Board, a school voucher program, and expansion of the state’s medical marijuana program. Sources: CBS News
My Take:
Big Texas Budget: The state’s largest—and arguably most progressive—budget should alarm every fiscal conservative. Had Texas limited the growth of state funds to population growth plus inflation over the past decade, taxpayers would have saved $51 billion in excessive spending and taxes. Texas didn’t become America’s economic engine by spending like California. Lawmakers must reverse course with sustainable spending and real property tax relief.
School Choice: Yes, Texas finally passed school choice—but it’s far from universal. The ESA program is capped at most 90,000 students, barely 1.4% of Texas’ 6.3 million school-aged children. Worse, only a limited number of students from families earning above 500% of the federal poverty level (about $160,000 for a family of four) can qualify. School choice isn’t about rationing opportunity—it’s about restoring it. Texas must expand the program, fully fund it, and give every child access to a better future.
THC and Medical Marijuana: A surprising addition: House Bill 46 expands the state’s medical marijuana program. Meanwhile, lawmakers continue debating whether to regulate or ban hemp-derived THC products as the bill died in the second special session. Texans don’t need the state babysitting them—they need government to get out of the way and let responsible adults make their own decisions.
Related: After Governor Abbott signed SB 2, I broke down the benefits and shortcomings of this school choice law on X.
4. Congress Returns to Work on a Continuing Resolution
In the News:
Congress is back from its month-long recess and must now hammer out a short-term spending deal to avoid a government shutdown on September 30, when federal funding expires. Source: Associated Press
My Take:
Avoiding a Crisis: The U.S. is teetering on the edge of fiscal, monetary, and economic disaster. Federal debt has blown past $36 trillion, inflation remains a threat, and higher interest rates are squeezing families and businesses alike. The last thing we need is more reckless spending.
Shutdowns Aren’t the Problem: Politicians routinely use the threat of a shutdown to push through bloated bills. But they’ve already shut down schools, economies, and communities in recent years. Compared to that, a short federal shutdown might be the wake-up call Washington needs—forcing Congress to confront its true crisis: addiction to deficit spending.
A Real Solution: Balanced budgets are possible. Faster growth paired with strict spending restraint can get us there. Congress should adopt sustainable reforms that cap annual budget growth to population growth plus inflation. The stakes couldn’t be higher. The time for excuses is over.
Related: Check out my This Week’s Economy episode for a deep dive on why federal spending restraint is essential.
5. Jobs Report Reveals
In the News:
In the first jobs report since President Trump dismissed the head of the Bureau of Labor Statistics, the numbers came in worse than expected. The economy added just 22,000 jobs last month — far below the forecast of 76,500. Meanwhile, unemployment ticked up by 0.1 percentage points to 4.3%, the highest since October 2021. These disappointing results highlight the combined pressures of rising inflation and harmful tariffs, resulting in more Americans being out of work than there are jobs available. Source: BLS
My Take:
The labor market has been weakening for more than a year. Job revisions cut earlier months lower, and key sectors like manufacturing (-12K), wholesale trade, and mining are shrinking. Long-term unemployment continues to rise, showing that opportunities are drying up for too many Americans.
Policy is making things worse. Trump’s tariffs and protectionist trade measures add uncertainty for businesses, on top of the regulatory drag left over from Biden’s term. The One Big Beautiful Bill hasn’t yet delivered its benefits, leaving workers squeezed between rising costs and fewer jobs.
The Fed must not make a bad situation worse. Core PCE inflation is still at 3.1%, well above the 2% target. Cutting interest rates now would only fuel inflation while jobs stagnate — a recipe for stagflation. What we need instead is fiscal discipline, free trade, and pro-growth reforms that empower markets, not government.
Related: I explained more details of the August Jobs Report in a recent post.
Thanks for joining me in this episode of "This Week's Economy." For more insights, visit vanceginn.com and get even greater value with a paid subscription to my Substack newsletter at vanceginn.substack.com.
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