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The federal government is now Intel’s largest shareholder.
President Trump has taken a 10% stake in the American chipmaker, which has brought stinging criticism from old-line conservatives who generally support him.
Trump insists it’s a great deal, and that there are more waiting in the wings.
Excuse me, how exactly does this differ from socialism?
TRUMP SAYS INTEL HAS AGREED TO GIVE THE US A 10% STAKE IN THE COMPANY
If socialism is taking over the means of production for the greater good of society, that sounds like a succinct summary of the socialist movement – as is done in such countries as China and Russia.
If Barack Obama had done this, there would be endless hours of programming calling him a communist lunatic.
The former president did take over Chrysler and General Motors, but that was a rescue mission aimed at preventing the collapse of the country’s iconic industry.
Intel is just the beginning. “I hope I’m going to have many more cases like it,” Trump said.
Republicans have long argued that government should stay out of free markets and not bet on “winners and losers.” But this is Trump’s Republican Party, and this is the new approach – a form of what was once dubbed industrial policy.
If the financially troubled firm sells off its manufacturing business, the U.S. share of Intel would grow to 15%.
Larry Kudlow, a top economic adviser in Trump’s first term, said on his Fox Business show that “I am very, very uncomfortable with that idea. I’m very uncomfortable with that one.”
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Steve Moore, an informal economic adviser to Trump, also broke with him, telling Kudlow: “I hate corporate welfare. That’s privatization in reverse. We want the government to divest of assets, not buy assets. So terrible, one of the bad ideas that’s come out of this White House.”
A National Review editorial said “government shouldn’t get into the chip business.”
Sen. Thom Tillis is “uncomfortable… I don’t care if it’s a dollar or a billion-dollar stake. That starts feeling like a semi-state-owned enterprise a la CCCP,” meaning the Soviet Union, he told Major Garrett.
Rand Paul posted: “Wouldn’t the government owning part of Intel be a step toward socialism? Terrible idea.”
Bernie Sanders, on the other hand, is celebrating.
The president’s rejoinder: “Why are ‘stupid’ people unhappy with that? I will also help those companies that make such lucrative deals with the United States. … I love seeing their stock prices go up, making the USA RICHER, AND RICHER.”
He added Monday: “I just made $10 billion, or $11 billion for the United States of America.”
Commerce Secretary Howard Lutnick told Laura Ingraham: “That is not socialism… That’s the best businessman in the United States of America in the Oval Office doing fair things for us.”
Intel, in a required SEC filing, warned investors that the arrangement could limit its ability to secure future grants, hurt global sales, and subject the company to more regulation.
In a deep drive, the Wall Street Journal news section reported how Trump had demanded the resignation of Intel CEO Lip-Bu Tan over past ties to China. But after Tan flew to the White House, Trump stopped the criticism. “I liked him a lot, I thought he was very good,” the president said in the Oval Office.
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He said he’d convert almost $9 billion in grants – earmarked for the company under Joe Biden’s bipartisan Chips Act – into a 10% equity stake.
“Trump will likely need to find more ways to support Intel, not wanting it to fail on his watch,” the Journal says.
That’s the thing. If the struggling company does well, it’s good for America, but if it keeps declining, that’s the downside risk.
The stock has popped by 4% since the Trump announcement, but it’s now valued at about $110 billion – down 50% since the beginning of 2024.
Intel had earlier announced plans to lay off 15% of its workforce.
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The president argues that because the government is a non-voting member of the board, it won’t interfere with Intel’s business decisions.
The reality is when the President of the United States is your largest shareholder, he can pretty much get what he wants.
And with Trump promising many more such deals, he is fundamentally changing the role of government as a partner with business – whatever you want to label it – just like he has transformed so much else.
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