Sen. Rand Paul (R-KY) slammed President Donald Trump’s decision for the U.S. Government to acquire a 10% stake in Intel Corp. (NASDAQ:INTC), warning that it sets a dangerous precedent of government ownership in the private sector.
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‘It’s A Step Toward Socialism’
Paul expressed concerns that conservatives are increasingly endorsing policies that stray from the principles of the free market, while appearing on CNBC’s “Squawk Box” on Wednesday.
On Trump’s decision to acquire a 10% stake in Intel, Paul says “it’s a step toward socialism,” while warning that once the government gets involved in private business, “you take those forces away that breed excellence,” he says, adding that it’s why he thinks “it's a big mistake to have government ownership of things.”
See Also: US Revokes Chip Production Permissions For Samsung, SK Hynix, Intel In China—Beijing ‘Opposes’ Move
Last month, the Trump Administration decided to convert the grants pledged to Intel as part of the CHIPS Act into an equity stake in the company, but Paul argues that even passive government ownership can distort market incentives.
“We've been giving poor people Coca-Cola for a long time, and maybe 10% of the money Coca-Cola gets is given to them. Maybe poor people should own part of Coca-Cola. No, it's a terrible idea,” he said. “It's sort of compounding one bad idea with another.”
He warned that the move undermines the identity of the Republican Party. “I worry that the free market movement, the movement that was a big part of the Republican Party, is being diminished over time.”
‘Trump Wasn’t Hired To Run A Hedge Fund’
Several other prominent experts have echoed similar concerns regarding Trump’s move in regards to Intel, with economist Peter Schiff calling it “not only unconstitutional, but a bad idea.”
Schiff said, “Trump wasn’t hired to run a hedge fund. This sets a very bad precedent as it moves our nation further away from free-market capitalism,” in a post on X, last month.
Investor Kevin O’Leary said that he hates the idea, adding that “In technology, we let the losers die and their assets get acquired by the winners. That’s what makes America great.” O’Leary further adds that he “hates the concept of government picking winners.”
Sen. Bernie Sanders (I-Vt), however, surprisingly came out in support of Trump’s decision, saying, “I am pleased the Trump administration agrees with the amendment I proposed three years ago,” adding that taxpayers should not be giving billions of dollars in corporate welfare for companies without getting anything in return.
Shares of Intel were down 0.87% on Wednesday, closing at $24.00, and are down 0.25% after hours. The stock scores poorly in Benzinga’s Edge Stock Rankings, with low Momentum and Growth scores, but has a favorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, its peers and competitors.
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