What the U.S. Government Is Doing With Its Stakes in Companies

Summary

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WSJ What’s News – May 7, 2026

Episode Theme:
The episode centers on the increasing role of the U.S. government as an “activist investor” under the Trump administration, examining its direct equity stakes in major companies, the implications for American business, and reactions from business leaders and policymakers. Major news developments in business, global politics, and markets are also covered.

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Main Discussion: The U.S. Government as Investor

Background and Context

• The Trump administration has broken with decades of economic tradition by directly investing in and taking equity stakes in key U.S. companies—most notably Intel, U.S. Steel, and several mining firms.
• Such “Trump capitalism” represents a shift away from strict laissez-faire approaches and resembles more interventionist periods like the New Deal.
• There is uncertainty surrounding the terms, oversight, and exit strategies of these investments.

Notable Quote:

“There’s free market capitalism, there’s state capitalism, and now there’s Trump capitalism.”
— Alex Osolleff (02:10)

Key Government Deals

• Intel: U.S. government takes a 10% stake.
• U.S. Steel: The U.S. will hold a ‘golden share’—potentially giving veto power over major decisions.
• Trilogy Metals: White House holding a 10% stake.
• Spirit Airlines: A proposed deal (offering up to a 90% stake) fell apart.

(Timestamps: 02:20–02:43)

Maggie Severns (WSJ Reporter) Interview

How unprecedented is this?

• References past government involvement (New Deal era) and the subsequent swing to free-market ideals after the 1970s and 1980s.
• Notes the Trump administration’s approach is “a real departure from several decades that preceded us” (02:58).

Transparency & Unknowns

• Details of investment terms (“term sheets”) are unclear or unknown.
• In some cases, the government may gain influence over company decisions; in others, this remains ambiguous.

What will the government do with profits?

• Recent claims from President Trump about $30 billion in paper gains from Intel shares are questioned: “The profit only exists... if you sell the stock.” (03:43)
• No announced plans for exit strategies or use of dividends.

Quote:

“They haven’t said... here’s when we would sell or why we would sell. They also haven’t said what they would do with dividends.”
— Maggie Severns (03:50)

Business Community Response

• Some business leaders and lobbyists express caution about government stakes, advising executives to “change the subject” if approached in high-level meetings (04:21).
• In distressed industries (ex: airlines), companies may seek out government investment as a lifeline.
• Key fear: The government may end up “propping up companies that become too big or too important to U.S. taxpayers to fail.” (04:50)

Quote:

“If you’re running a company that’s in big trouble... you might want that money because it’s a bailout and it could be a lifeline.”
— Maggie Severns (04:34)

Conclusion:

• Much about these arrangements remains uncertain and will need to “play out and see.” (04:57)

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Other Major Headlines

McDonald’s Performance and Consumer Trends (00:42–01:30)

• McDonald’s beats Wall Street forecasts by expanding value deals as consumers tighten spending.
• Other chains like Shake Shack and Papa John’s report disappointing sales; Shake Shack stock drops 28%.
• Hawkeye 360, a defense satellite company, soars after its IPO (+31%), reflecting investor appetite for defense-oriented firms.

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Markets Recap (01:30–02:17)

• Dow drops 0.6%, ending recent record streaks for Nasdaq and S&P.
• Whirlpool falls on earnings downgrade, highlighting mixed signals across sectors.

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White House Rationale (05:02)

• Official statement: Trump administration aims to “correct previous administrations’ mistakes” and reduce U.S. dependence on imported critical goods.

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Elon Musk and French Legal Troubles (05:02–05:57)

• French prosecutors summon Elon Musk to Paris on preliminary criminal charges involving his social platform X.
  • Charges: biased algorithm, secrecy of correspondence violations, child pornography dissemination, and sexualized deepfake image creation.
• X has not commented, but previously called a raid on its Paris offices “abusive... law enforcement theater.”

Quote:

“The investigation began last year with allegations of a biased algorithm. It has grown to include charges of violating the secrecy of correspondence, dissemination of child pornography, and the creation of sexualized deepfake images.”
— Alex Osolleff (05:13)

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Housing Market Update (06:25–07:37)

• Mortgage rates rise to 6.37% (highest in a month), stalling spring home sales.
• Nicole Friedman: Ongoing geopolitical turmoil, inflation, and uncertainty mean “not a recovery year for the housing market.”
• Families may delay purchases by a full year due to high rates.

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Iran War & Diplomatic Maneuvers (07:37–08:42)

• U.S. awaits Iran’s response to a proposed negotiation framework.
• Saudi Arabia and Kuwait lift restrictions on U.S. military use of bases, potentially enabling military operations through the Strait of Hormuz.
• Strains in U.S. relations with the Vatican and Italy as Pope Leo calls for an end to the Iran war; Giorgia Meloni distances herself from President Trump.
• Secretary of State Marco Rubio dispatched to Rome for diplomatic repairs.

Quote:

“A lot of Italian officials, lawmakers, even those in the Vatican, see Rubio as Trump’s Mr. Fix It. He’s soothing trade nerves... Telling officials exactly what they want to hear while still conveying what the President’s priorities are.”
— Robbie Grammer (08:48)

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International Legal and Security Developments (09:16–10:00)

• China: Two former defense ministers receive death sentences (with two-year reprieves) for corruption as part of Xi Jinping’s military anti-corruption drive.
• United Kingdom: Two officials convicted of aiding Chinese espionage against dissidents—one of the first convictions of this kind in British history.

Quote:

“The case shines a light on the lengths that the Chinese state goes to to keep tabs on critics and dissidents abroad.”
— Alex Osolleff (09:45)

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Memorable Quotes & Moments

• “There’s free market capitalism, there’s state capitalism, and now there’s Trump capitalism.” — Alex Osolleff (02:10)
• “They also haven’t said what they would do with dividends. If you get dividends, are you reinvesting them... or... moving it to Treasury?” — Maggie Severns (03:50)
• “A lot of Italian officials, lawmakers, even those in the Vatican, see Rubio as Trump’s Mr. Fix It.” — Robbie Grammer (08:48)
• “If you decide not to purchase in the spring, they might just wait a whole year.” — Nicole Friedman (07:18)
• “The case shines a light on the lengths that the Chinese state goes to to keep tabs on critics and dissidents abroad.” — Alex Osolleff (09:45)

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Useful Timestamps

• 00:42 – McDonald’s earnings and consumer shifts
• 02:10 – Introduction to government equity stakes (“Trump capitalism”)
• 03:00–04:50 – Maggie Severns on historical context, business reactions, and unknowns
• 05:02 – Official White House stance on government investment
• 05:13 – Elon Musk summoned to Paris
• 06:25 – Real estate market and mortgage rate impact (Nicole Friedman)
• 07:37 – Iran war update; U.S. uses Gulf military bases
• 08:42 – Rubio’s diplomatic mission in Rome (Robbie Grammer)
• 09:16 – China anti-corruption verdicts; UK-China espionage case

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Tone and Delivery

The episode features brisk, news-driven analysis with measured, journalistic language. Insights balance matter-of-fact reporting with occasional vivid context, especially around the novelty and potential risks of new government economic interventions.

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This summary provides a comprehensive overview and brings forward the richest points, quotes, and their context, serving as a useful stand-in for those who missed the episode.

Transcript

[Jessica Mendoza / Miriam Gottfried]

Hey, this is Jessica Mendoza, host of the Journal podcast, our show about money, business and power. If you're looking for more deeply reported stories like we share every day, consider becoming a subscriber to the Wall Street Journal. Visit subscribe.WSJ.com TheJournal all lowercase to subscribe now.

[Alex Osolleff]

The US Government is now an activist investor. How is the business community reacting? Plus, Secretary of State Marco Rubio is in Rome trying smooth things over with the Pope and Italy's leadership.

[Robbie Grammer]

A lot of Italian officials, lawmakers, even those in the Vatican see Rubio as Trump's Mr. Fix It.

[Alex Osolleff]

And French prosecutors seeking criminal charges for Elon Musk. Summon him to Paris. It's Thursday, May 7th. I'm Alex Osolleff for the Wall Street Journal. This is the PM Edition of what's news, the top headlines and business stories that move the world today. We begin this evening's show with a key insight into how people are spending their money. Thanks to the latest earnings from the world's biggest burger chain, McDonald's has been doubling down on value meals and other low cost menu items. That's helping it bring people in. Its first quarter revenue and profit beat Wall Street's forecast. In the US same store sales rose 3.9%. Some other chains like Shake Shack, Wingstop and Papa John's have reported disappointing sales in recent weeks. Rising gas prices and other costs have made consumers cut back and restaurants are going all out to attract them. And McDonald's plans to keep pushing deals. Stocks slipped today, pulling back from recent records for the Nasdaq and S and P. The Dow led the losses and closed down 0.6%. Whirlpool stock tumbled after the company slashed its earnings guidance. Shake shack shares slid 28% after the burger chain swung to a loss in its latest quarter. But national security satellite company Hawkeye 360 soared after its IPO. It closed up 31%, a sign of investor demand for defense related companies. There's free market capitalism, there's state capitalism and now there's Trump capitalism. The president has been involved in American business in unorthodox ways. The Trump administration has announced direct investment stakes in at least 10 companies. That includes intel, saying the US government will take a 10% stake in Intel. US Steel the US will have a golden share in US steel and mining companies.

[Telis Demos]

The White House taking a 10% stake

[Alex Osolleff]

in Trilogy Metals, while other arrangements like the recent one with Spirit Airlines have fallen apart. It reportedly would have given the government

[Maggie Severns]

up to a 90% stake in the company.

[Alex Osolleff]

For more on those deals and what they mean for the Trump administration, I'm joined now by WSJ reporter Maggie Severns. Maggie, how different is President Trump's approach to these kinds of deals than in the past? Throughout US History, there are examples from

[Maggie Severns]

history, like the New Deal era, where the government was very involved in building infrastructure and more involved in private business. And then in the 70s, 80s, we had this swing towards more laissez faire capitalism and the idea that the government should really be hands off. Right. So this is a real departure from several decades that preceded us when it comes to the government starting to say we want to be more hands on, even when it comes to specific companies. So we don't have term sheets for these deals. We don't know the details of them. In some cases, the government has said that it would have some kind of power to influence company decisions. In other cases, we don't know.

[Alex Osolleff]

Last week, the president said the US investment in intel alone had generated $30 billion in gains over the past 90 days. What has the government said it would do with potential profits?

[Maggie Severns]

The profit only exists for the most part if you sell the stock. Right. He said that the government's made so much money off of intel stock because the stock is up, but that's only if sold our share in intel. And the government hasn't really articulated what plans might be. There's not an exit strategy. They haven't said, you know, here's when we would sell or why we would sell. They also haven't said what they would do with dividends. If you get dividends, are you reinvesting them in the company? Are you taking that money and moving it to Treasury? Is it going somewhere else? We don't know.

[Alex Osolleff]

How's the business community responded to the proliferation of these deals? Do business leaders want these overtures from President Trump or are they kind of wary of them?

[Maggie Severns]

Some lobbyists have started to actually counsel CEOs. If they're going in to meet with the president or top staff, they'll say, what happens if they want to take some kind of share in my company? And folks have been advised, maybe change the subject or kind of, you know, do a smile and nod type thing. If you're running a company that's in big trouble, like, you know, Spirit Airlines was in talks that fell apart with the administration, you might want that money because it's a bailout and it could be a lifeline. You know, the concern from people is that the US Essentially winds up propping up companies that become too big or too important to US Taxpayers to fail. So a lot of that, I think we're going to have to watch these

[Alex Osolleff]

play out and see that was Journal reporter Maggie Severn. Thanks Maggie.

[Maggie Severns]

Thanks so much for having me.

[Alex Osolleff]

A White House spokesman said that the Trump administration is correcting previous administrations mistakes that led Americans to be dependent on imports of critical goods. French prosecutors are summoning Elon Musk to Paris. He's facing preliminary criminal charges in a sprawling investigation into his social media platform X. The investigation began last year with allegations of a biased algorithm. It has grown to include charges of violating the secrecy of correspondence, dissemination of child pornography, and the creation of sexualized deepfake images. X didn't immediately respond to a request for comment. But earlier this year when French authorities raided the company's Paris offices and X called that a, quote, abusive act of law enforcement theater. Coming up, the diplomatic shifts that may make it easier for the Trump administration to move ships through the Strait of Hormuz. That's after the break.

[Telis Demos]

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[Alex Osolleff]

It's a beautiful spring day here in New York. The sun is shining, the trees and tulips are in bloom, which is a surefire sign that we are in the thick of the crucial spring home selling season. Today we got the latest data point on why that season's looking not so sunny for people who want to buy a home to Freddie Mac says the average rate for a 30 year fixed mortgage hit 6.37% this week, up from 6.3% last week. It's the highest rate in a month. Journal housing reporter Nicole Friedman says that this is the worst possible timing for the housing market.

[Nicole Friedman]

We had the war in the Middle east, the turmoil with shipping and gas prices and inflation expectations and rates have climbed again and that's kind of stalled out that momentum. This is the spring home buying season, which is typically the busiest time year for home sales. And a lot of families, they want to move over the summer between school years. So if they decide not to purchase in the spring, they might just wait a whole year. And so the expectation now is that this is going to be another slow spring and kind of not a recovery year for the housing market.

[Alex Osolleff]

Turning to the war with Iran, the US Is still waiting on Tehran's response to a one page framework to restart negotiations aimed at ending the conflict, which we told you about yesterday. Meanwhile, Saudi Arabia and Kuwait have removed a hurdle to President Trump's effort to move ships through the Strait of Hormuz, an operation that the Trump administration is now looking to restart as early as this week. That's possible because as the Journal has learned, Saudi Arabia and Kuwait have lifted restrictions on the US Military's use of their bases and airspace. The Iran war has put strain on a number of diplomatic relationships, including between President Trump and Pope Leo. The Pope has called for an end to the war and Trump has been criticizing the Pope for months. That's caused Italy's Prime Minister Giorgia Meloni to distance herself from the president. Now the mission is relationship repair and the administration sent Secretary of State Marco Rubio to do it. Rubio met with Pope Leo at the Vatican this morning. Journal national Security reporter Robbie Grammer is in Rome covering Rubio's trip and he says the Secretary of State has been tasked with a tough job.

[Robbie Grammer]

So far, all the signals coming out of the Vatican are that this meeting was cordial. He spent about three hours at the Vatican where he met with both the Pope and the Pope's top diplomat. You know, a lot of, a lot of Italian officials, lawmakers, even those in the Vatican, see Rubio as Trump's Mr. Fix It. He's soothing trade nerves. He's telling officials exactly what they want to hear while still conveying what the President's priorities are. But at the end of the day, you're always one true social post away from a new diplomat, a crisis if you are a leader in Europe.

[Alex Osolleff]

And in other international news, a Chinese military court has convicted two former defense ministers of corruption. The men, both former generals, were sentenced to death. With a two year reprieve, Chinese leader Xi Jinping has led a years long crackdown on the military's top brass. Today's verdicts were the most severe known punishments on disgraced generals that have come under Xi. And in a British court, a UK Immigration official and a Hong Kong trade official were found guilty of helping the Chinese state and spy on dissidents in Britain. It's one of the first convictions related to Chinese espionage in British history. And the case shines a light on the lengths that the Chinese state goes to to keep tabs on critics and dissidents abroad. The Chinese embassy has previously denounced the arrests of the two men as a, quote, malicious fabrication. And that's what's news for this Thursday afternoon. Today's show is produced by Anthony Bancey and Danny Lewis with supervising producer Tali Arbel. ALEX I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

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