Comrades, we must celebrate! Our glorious socialist revolution has arrived! With tears streaming down my face, I say, “Thank you, President Trump. You have delivered the means of production to the proletariat! Workers of the world unite!”
OK look, maybe the United States acquiring a 10% stake in the semiconductor chip company Intel doesn’t exactly herald the resurrection of Vladimir Lenin, but when a laissez-faire capitalist like Donald Trump negotiates a minority stake in a privately-held corporation on behalf of the United States, it’s bound to raise some eyebrows.
The odd thing is, the people whose eyebrows you would expect to be leaping off their faces if a President Kamala Harris did something similar are strangely muted in their criticism. The voices who argued most vociferously against encroaching “big government” have, for some reason, opted to keep silent when it’s their Big Government doing the encroaching.
When the Obama administration bailed out the auto industry back in 2009, the US government took a massive 60% equity stake in General Motors, arguing that the manufacturer was vital to preserving the domestic auto industry—along with national security concerns.
At the time, Republicans opposed the plan, decrying it as socialism, or as the government tipping the scales for one company over others. Some argued that GM was a “dinosaur” that needed to go extinct. Others predicted the bailout would only postpone GM’s inevitable collapse. In the end, GM paid back what they owed to the US, escaped bankruptcy and is now back to profitability (although they recently took a 35% drop in profits, largely owing to the Trump tariffs). So, the gamble paid off.
The same thing might happen with Intel, whose business has struggled with the advent of AI, massive debts, leadership changes and a failed foundry business which has cost the company billions. They no doubt need a massive infusion of cash, which the US has now provided.
Win/win?
Not necessarily. The problem with the US government taking ownership positions in private companies is that it brings with it a host of problems related to the awarding of, for example, government contracts. If our government owns a large stake in one company, wouldn’t it be more inclined to dispense lucrative contracts to the company they own—as opposed to the one they don’t?
Obama called the government a “reluctant shareholder” in GM, and promised to unwind its position in the company as quickly as possible—which we did, selling the last of our stock in the company in 2010. The current president, it will surprise no one to hear, has yet to make any such promises. Corporate interference is, very likely, incoming.
More worrisome than the government taking their stake in Intel was economic advisor Kevin Hassett’s response when asked on CNBC whether the American public can expect more of these sorts of deals: He answered in the affirmative, saying it was entirely possible the government would begin taking stake in other companies.
Which is, you know, socialism.
The justification for these acquisitions, according to Hassett, is to provide the American public with equity in companies which receive federal assistance and to build up a sovereign wealth fund, something for which the president has been advocating. I don’t have an opinion one way or the other on the establishment of such a fund except to note that it might be a mistake to have billions of dollars sloshing around in a giant piggy bank that any American president can disperse as they see fit?
Moreover, there very well might be some justification for the US government to take ownership stakes in various companies at various times. But there have to be strong limits.
President Truman tried in 1952 to nationalize our domestic steel industry to avert a strike. The steelworkers weren’t having it: “Hitler and Mussolini did the same thing in Germany and Italy as Truman has done in the United States,” stormed Thomas Millsop, the president of Weirton Steel. The Supreme Court agreed, declaring that Truman lacked the authority to unilaterally takeover an entire American manufacturing sector. Will this Supreme Court rule similarly if Trump bullies his way into other industries? Hard to say.
Personally, I don’t trust Trump. Nor do I trust any of his minions to act in the best interests of anybody whose telephone numbers they don’t already have on their phones. But I support saving Intel, provided the president keeps his greasy, special-sauce-stained fingers out of the boardroom. And, again, provided the government unwinds its position in the company as soon as possible.
A basic tenet of liberalism is using the levers of the American government to help Americans. That may include, at times, corporations. Government can do good things, even in the hands of bad people. Whether this turns out to be one of those good things remains to be seen, but in the meantime, I’m going to celebrate the Marxist revolution currently emanating from the unlikeliest place.
Today, Intel. Tomorrow, comrades, the world.
