Commentary: The Trump administration's investments in corporate stocks raise fears of 'crony capitalism'

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Set us as preferred It was about one year ago that the Trump administration announced a truly eye-opening transaction: In return for an $8.9-billion investment in the chipmaker already authorized under the Biden-era CHIPS Act, the government would take a roughly 10% stake in Intel shares — making the government Intel’s largest shareholder.Was this a good deal?For the U.S.taxpayer, the answer is yes — from the standpoint of paper profits.

The 443.3 million Intel shares the government acquired for $8.9 billion are currently worth nearly $44 billion on the open market.The Trump administration’s ‘strategic stakes’ policy is a deliberate attempt to shape corporate behavior and obtain leverage under the guise of bolstering domestic capacity in semiconductors, critical minerals, and other industries.— Tad DeHaven, Cato InstituteBut that comes with a host of drawbacks.One is the possibility that Trump will interfere with management decisions at Intel — as he attempted to do even before this deal closed.

More important, the transaction poses questions about Trump’s industrial policy, as indecisive and obscure as it is.The administration’s portfolio of direct and indirect investments now numbers 30 public companies and is valued at about $27 billion.

That’s an unprecedented level of government participation in the operations of U.S.corporations, placed in the hands of a single person whose business judgment is, to say the least, dubious.

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