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Those who have long preached in favor of free markets and against socialism are being thrown for a loop with President Trump’s move to have the U.S. government take a 10 percent stake in struggling chipmaker Intel — and his willingness to make similar deals with more companies.
It’s a major development in the battle for the dominant economic philosophy on the political right as free-marketers and populists duke it out over the appropriate level of government intervention in the age of Trump and beyond.
Libertarian-leaning Sen. Rand Paul (R-Ky.) called the deal a “terrible idea,” suggesting on social media the Intel stake is a “step toward socialism.” Rep. Warren Davidson (R-Ohio) warned in another post that “America will not outperform China by being more like China.”
Sen. Eric Schmitt (R-Mo.), meanwhile, made a national security argument when asked about the government taking a stake in Intel.
“You can’t have the only chipmaker in the United States go down, which is what the concern is,” Schmitt told NewsNation on “The Hill Sunday,” adding that he thought the Intel arrangement would be a “temporary” move.
The Intel deal — made after Trump had a meeting with its CEO, whom he had called on to resign — gives the government a nearly 10 percent stake in the chipmaker, paid for with about $11 billion in grants from the CHIPS and Science Act and other U.S. government grants.
It might not end there. National Economic Council Director Kevin Hassett said Monday morning on CNBC that it is “absolutely” possible that the U.S. government takes more equity stakes in U.S. businesses. Trump posted on social media: “I will make deals like that for our Country all day long.”
It’s quite the change from Tea Party-era rhetoric bemoaning government “picking winners and losers” and “crony capitalism” — and has won a thumbs-up from self-described democratic socialist Sen. Bernie Sanders (I-Vt.).
Trump had already shaken the free market capitalists with his protectionist and retaliatory tariff policies, but they were pleased by Trump’s extension and expansion of tax cuts in the One Big Beautiful Bill Act.
His embrace of taking ownership of private companies as a part of American industrial policy, though, is an affront to not only the reigning economic wisdom on the right, but the philosophical principle of independence for private companies.
“Conservatives for years have bemoaned exactly this kind of muddling of the public and private sector — when it came to baking the cake, questions about DEI, and all these other things,” Akash Chougule, president of the pro-free market Foundation for Research on Equal Opportunity, told me. “Government is now one of the major drivers of Intel, and conservatives are not going to be in control of government forever, and now have to ask ourselves what that means.”
Scott Lincicome, vice president of general economics and trade at the libertarian Cato Institute, wrote in a Sunday Washington Post op-ed that “Intel will face constant pressure to align corporate decisions with the goals of whatever political party is in power.”
It is rare but not unprecedented for the government to take a stake in private companies, as those who remember the bailouts in the aftermath of the 2008 financial crisis know.
The U.S. notably took a 60 percent ownership in General Motors, eventually selling off the last of its stake in 2013 for an overall loss of more than $11.2 billion. It took 92 percent ownership of insurer AIG, with the government making $22.7 billion after it sold its remaining shares in 2012.
Government investments in exchange for equity stake aren’t just limited to crises. The Department of Defense (DOD) this year announced a $400 million deal with rare-earth minerals company MP Materials that gave DOD 15 percent ownership, making the department the company’s largest shareholder — a deal that was highlighted by Oren Cass, founder and chief economist at the right-wing populist think tank American Compass.
“An equity stake is a sensible tool in the industrial policy toolkit where the government is supplying cash that a firm could not otherwise access to fund major capital projects important to the national interest,” Cass wrote in his organization’s Commonplace Magazine, while recognizing that such an investment would likely not be enticing to firms with a strong balance sheet.
Some on the right who were opposed to the CHIPS Act investments as a whole think that getting a potential return on investment is perhaps a small consolation for the billions spent on trying to boost American industry. And others, like Schmitt, rationalize it on the basis of national security.
Chougule, though, said that what started as a “legitimate pandemic response the chip shortage” has “transformed into this completely absurd, broad based industrial policy with no real limiting principle for any objective observer who isn’t just blindly either supporting the administration or blindly just favoring greater government intervention in the economy.”
So, which economic principles will win out? In another sign of the power of Trump, few on the right beyond free-market activists and libertarian-leaning Republicans are speaking out against the move to take ownership stakes in private companies.
And Trump, predictably, is dismissing critics: “You do have stupid people say, ‘Oh, that’s a shame.’ It’s not a shame. It’s called business,” he told reporters in the Oval Office on Monday when asked about the criticism.
The opinion writers weigh in: Trump Wins Bernie Sanders Endorsement, by The Wall Street Journal’s James Freeman… The Intel Deal is a mistake, from The Washington Post editorial board.
Welcome to The Movement, a weekly newsletter looking at the influences and debates on the right in Washington. I’m Emily Brooks, House leadership reporter at The Hill. Tell me what’s on your radar: ebrooks@thehill.com.
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FUTURE OF THE FREEDOM CAUCUS AS ROY, OTHERS EXIT
The House Freedom Caucus is set to lose some of its most influential and important personalities come 2027.
Rep. Chip Roy (R-Texas) is headlining those departures with the announcement that he will run to be Texas attorney general. Several other notable Freedom Caucus members are seeking higher office, too: Reps. Andy Biggs (Ariz.), Byron Donalds (Fla.), and Ralph Norman (S.C.) are running for governor; Rep. Barry Moore (Ala.) is running for Senate. Current Chair Andy Harris (R-Md.) is at risk of being redistricted.
But the coming departure of Roy in particular leaves big questions about the future of the group and how it will impact the House.
Roy is one of the most vocal members of the group. He has driven its biggest battles and much of its strategy over the last several years, and he has personified the Freedom Caucus’s ethos of using every leverage point available to maximum effect in order to secure what it sees as more conservative policy wins.
Some House GOPers hope the departures of those members who have often caused headaches will lead to greater GOP harmony and less chaos in Congress.
“The outcome of Chip leaving is a more productive Congress. He’s been a contrarian, and he’s been an obstructionist,” said Rep. Derrick Van Orden (R-Wis.), who often criticizes the House Freedom Caucus.
But sources in GOP leadership and other Republicans who have been at the center of major negotiations with Roy see him as an important bridge between the Freedom Caucus and the rest of the House GOP and as someone who negotiates in good faith. And they wonder who will fill that role in the next Congress.
“My hope is that we’ll have members from the Freedom Caucus step up to fill that void, because there’s a need for us to continue to work together,” Rep. Stephanie Bice (R-Okla.), who negotiated with Roy as a leader in the Republican Main Street Caucus, told me.
I went into much further detail in a story last week. ICYMI: Chip Roy headlines Freedom Caucus departures that could transform House GOP.
FLAG BURNING DEBATES
Is burning the American flag without consequences the most or least American thing you can do?
That long debate is ramping up in wake of President Trump‘s signing of an executive order directing prosecution of those who violate laws “in ways that involve desecrating the flag” — aiming to get around the Supreme Court finding that the act itself is protected under the First Amendment by directing the Justice Department to bring cases “against acts of American Flag desecration that violate applicable, content-neutral laws, while causing harm unrelated to expression, consistent with the First Amendment.” (Fox News, CBS News, Breitbart News)
Rep. Thomas Massie (R-Ky.) chimed in on the social platform X: “Flag burning, whether it’s [American Flag] or [Israeli Flag], is covered by the First Amendment to the United States Constitution. Neither Congress nor the President nor a Judge can make it illegal.”
Political strategist Chris LaCivita, an adviser to Trump’s 2024 campaign who is targeting Massie in next year’s election, responded: “What a dope – flag burning isn’t speech – it’s behavior – an action – but thanks for the material. I know where I am going to put a flag pole.”
The Federalist’s Sean Davis, on the other hand, said: “When every single city, state, and federal jurisdiction which investigated or charged or imprisoned someone for burning or defacing or giving a dirty look to a rainbow flag admits wrongdoing and pays restitution to its victims, we can have a discussion about whether burning an American flag is ‘free speech.’”
ON MY CALENDAR
- Tuesday, Sept. 2, to Thursday, Sept 4: The fifth annual National Conservatism Conference in Washington, D.C., with a host of high-profile speakers from the Trump administration and more nationalist side of the right wing. (If you are attending this event, shoot me a note on what you’re hoping to see there: ebrooks@thehill.com)
- Friday, Sept. 19, to Saturday, Sept. 20: The Intercollegiate Studies Institute hosts its “Homecoming Weekend” in Wilmington, Del.
THREE MORE THINGS
- Tea Party Patriots Action is in the midst of a three-week bus tour rallying support for attaching the Safeguard American Voter Eligibility Act — a measure to require proof of citizenship to register to vote — to “must-pass” legislation like the National Defense Authorization Act when Congress returns. It will culminate with a rally at the U.S. Capitol on Wednesday, Sept. 10. Jenny Beth Martin, honorary chair of Tea Party Patriots Action, said in a statement that “strengthening election integrity is at the heart of Tea Party Patriots Action’s mission.”
- Rachel Bovard, vice president of programs at the Conservative Partnership Institute, turned up the heat on Senate Majority Leader John Thune (R-S.D.) while talking about the struggle to confirm Trump’s nominees on a Monday podcast with American Moment CEO Nick Solheim. “Plan for it, put your back into it, show up on the floor, and vote,” Bovard said.
- Is a debate with DEI-slayer Christopher Rufo and conservative commentator Jonah Goldberg on the horizon? Rufo said that the editor in chief of The Dispatch has agreed “in theory” to a debate. Radio host Hugh Hewitt and The Free Press’s Bari Weiss have volunteered to moderate. TBD. The potential debate sprung up after Goldberg responded to the debut episode of the Intercollegiate Studies Institute’s “Project Cosmos” podcast that featured Rufo, Patrick Deneen, Christopher Caldwell, Curtis Yarvin, and institute President Johnny Burtka. “Buckley weeps,” Goldberg said.
WHAT I’M READING
- New York Times’s Robert D. McFadden: James Dobson, Influential Leader of the Religious Right, Dies at 89
- Wall Street Journal’s Molly Ball: A Partisan Shot Fired in Texas Reverberates Around the Country
- The Spectator World’s Bruce Gilley: J.D. Vance: proconsul to Britain?
- Politico’s Ian Ward: JD Vance’s Tour in Iraq Taught Him His Government Lies
