The administration under Trump has struck a deal involving Intel, trading federal interests for an $8.9 billion grant initially earmarked by Biden’s Chips and Science Act.
I feel the need to express my disapproval here.
If a company seeks to avoid diluting its stock, it shouldn’t rely on taxpayer funds.
This isn’t just about Trump negotiating; the real issue is that this money was allocated to begin with. The Chips Act essentially redistributes wealth from taxpayers to corporations. What we’re seeing from Trump and Treasury Secretary Scott Bescent is merely capitalizing on a bad situation.
Had Intel taken to Wall Street for capital, it would have had to either issue debt or dilute existing shareholders. This situation doesn’t align with how capitalism should function, leaving many free-market conservatives feeling uneasy.
In a true free market, Congress wouldn’t have allocated $8.9 billion to Intel. Accepting government capital injections means existing shareholders face potential dilution of their stakes.
Moreover, the government’s 10% share in Intel will be voting stocks. Still, it won’t have the management control—just a passive ownership stake. This could lead to selling off shares to reclaim taxpayer funds.
The core issue with this arrangement is the ongoing transfer of taxpayer wealth to businesses. Much of the outrage among self-identified “free market” conservatives focuses more on stock ownership than on substantial taxpayer subsidies.
A short while ago, the Wall Street Journal mentioned how unexpected it is for a Republican president to demand government ownership in a private enterprise. Yet, this mirrors past actions, notably when George W. Bush’s administration bailed out Wall Street. The Journal seemed unconcerned when those financial institutions profited without conditions, all funded by taxpayers. That’s far more problematic than taxpayers holding non-voting shares.
The Journal also overlooks how it previously defended the conservative principles during Bush’s $700 billion bailout, which benefitted the very banks that caused the 2008 crisis. In that instance, some stocks provided the government first dibs on dividends—making it a form of ownership.
Interestingly, Bush’s Treasury asked for warrants that could convert into common stock. Had Trump activated those during his first term, the federal government could’ve gained significant equity in banks like Goldman Sachs and JPMorgan Chase.
Relatedly, there’s now a strong push against what some see as corporate welfare. For instance, back in 2024, the Department of Energy approved an $80 million grant to Blue Bird, a manufacturer of electric school buses. Trump halted those funds, prompting Senator John Ossoff (D-Ga.) to demand their release.
If Blue Bird ultimately receives that grant, taxpayers should also expect dilution in ownership stakes. What’s unfolding isn’t a true market—it’s crony capitalism or even a form of corporate communism, transferring wealth from taxpayers to private firms. If companies prefer to maintain their stock integrity, they ought not to accept taxpayer dollars.
Commerce Secretary Howard Luttonick asserted on CNBC, “We need equity stakes for the money,” indicating the government’s intention to receive something in return for funds that were already committed under Biden.
