The public purse is not a private dividend machine

Let me state the matter plainly. According to CNBC, defense companies and their trade groups are actively pressing Congress to ensure that the Pentagon cannot require approval before those same companies buy back their own stock. Read that again slowly. Firms that derive their revenues — in very large part — from federal appropriations are lobbying to prevent the federal government from having any say over how that capital is redeployed.

I did not build the customs service, the public credit, and the first national bank so that Treasury dollars could flow in a circle: from the public fisc, to a contractor's revenue line, and then immediately back out to its shareholders. That is not commerce. That is extraction.

The principle here is not complicated. When a company's principal customer is the United States government — when its order book is written in the ink of congressional appropriations — it has accepted a partnership with the public. Partners do not get to disclaim oversight when the accounting becomes inconvenient. The argument that buyback restrictions interfere with "private" capital decisions collapses the moment you trace where that capital originated. It originated with the taxpayer.

The deeper concern is productive capacity. My Report on Manufactures was not a brief for subsidizing idleness; it was an argument that public encouragement of industry must yield industrial strength — real capacity, real workers, real output. Stock buybacks, by inference, do none of those things. They do not build a shipyard, tool a semiconductor fab, or train an engineer. They return money to investors who may deploy it anywhere on earth. If the United States is spending hundreds of billions on defense procurement, it is entitled to ask whether that spending is building the sinews of national strength or merely fattening balance sheets.

I am not hostile to private enterprise — I am its architect in this republic. But I was equally clear that concentrated private power, when it operates free of any public check, becomes a threat to the very market order it claims to represent. A handful of enormous contractors, insulated from competition by the complexity of defense procurement and now lobbying to insulate themselves from financial oversight as well, is precisely the configuration that warrants a firm legislative hand.

My recommendation is direct: Congress should require Pentagon review and approval of material stock buybacks by prime defense contractors. Set a threshold — say, buybacks exceeding five percent of the prior year's federal contract value — and subject those transactions to scrutiny. The contractors will howl. Let them. A firm confident that its capital is being put to genuinely productive use has nothing to fear from transparency. It is only the firm that cannot make that case which needs the secrecy.