Bernie Sanders Likes Trump's Plan for Government Taking Ownership in Tech Companies

Gizmodo

a day ago

There aren't many things that Bernie Sanders and Donald Trump agree on. But we may have found one idea where the two men see eye-to-eye.
Sanders, an Independent Senator from Vermont who caucuses with the Democrats, told Reuters on Wednesday that he's in favor of the Trump administration's plan to convert federal grants for tech companies like Intel and TSMC into equity stakes in those companies.
'If microchip companies make a profit from the generous grants they receive from the federal government, the taxpayers of America have a right to a reasonable return on that investment,' Sanders reportedly told Reuters.
The U.S. government is hoping to get a 10% equity stake in Intel in exchange for federal grants under the CHIPS Act, according to Commerce Secretary Howard Lutnick, who talked about the plan on Tuesday on CNBC. News broke of the idea last week, but Lutnick's appearance on CNBC was the first time anyone from the Trump regime had started talking about it publicly.
'The CHIPS Act was just a giveaway to rich companies,' Lutnick said on CNBC. 'I mean, why in the world is the United States of America taking money and giving it to companies like TSMC, which is worth a trillion dollars? I mean, why would we give them money to come to America?'
U.S.-based Intel and Taiwan-based TSMC have both been incentivized by the CHIPS Act to invest more in manufacturing in the U.S., but it seems folks across the political spectrum have started to wonder whether it's smart to just hand out money to enormous companies without getting something more substantial in return. News broke Tuesday that Trump didn't just want an equity stake in Intel, but also chipmakers like Micron, TSMC, and Samsung.
The idea behind grants for private companies is that they spur further investment in a given community and help create jobs. But the government taking an equity stake would theoretically come with a say in how that company does business, whether it's through employment decisions or any number of other choices. Lutnick insisted to CNBC that the government would not get any governance role at Intel along with its potential 10% stake, but it's hard to imagine that would be true. The government received a 'golden share' on the U.S. Steel deal when Japan-based Nippon Steel purchased the company in June. That allows Trump to appoint a board member in a very unusual arrangement.
Under the CHIPS Act, TSMC received $6.6 billion in grants, while Intel has received about $7.9 billion, according to CNBC. Intel has slowed its expansion plans, which has left billions of dollars in funds on the table that haven't been allocated yet. And as the New York Times recently noted, converting $10.86 billion in government grants for Intel into equity would be one of the largest interventions into private industry since U.S. auto companies were bailed out during the Great Recession.
Trump has also called for Intel CEO Lip-Bu Tan to be fired over his alleged links to China, portrayed by the president as a potential national security concern. But Trump publicly changed his tune after meeting with Tan last week. It's not at all clear what kind of understanding the two men have come to.
Needless to say, all of this potential government tinkering makes Wall Street very nervous. An editorial from the Wall Street Journal on Monday explained that details of the Intel deal were vague, 'but you can bet the feds wouldn't be passive investors.' Which brings us to the question of whether Bernie Sanders will actually like any potential arrangement Intel gets with Trump.
Sanders may approve of an equity stake on paper, but President Trump's history of bending institutions to his will looks a lot different in practice. Trump has strong-armed universities, corporate media, and now has his sights set on museums and the way they present history. Lefties should be cautious when saying they support any idea from Trump without making it clear that any support comes with caveats.
If the past six to eight months of Trumpism are any guide, an equity stake in Intel comes with plenty of strings attached.