Ch 5.8 | The Free Market Myth Meets Trump’s Intel Deal
Why both parties cry “socialism” only when it helps the other side.
I want to be on the record right up front: I still believe in the power of free markets to drive innovation and lift people up. I do not believe in government intervention in markets. I long for a “freer” market, but as I've said many times before, the free market is a myth and it likely always has been.
When we move beyond economic theory and into our economic reality, we live in a hybrid economy. An economy where corporations receive subsidies, grants, tax breaks, and industry bailouts.
So when I read “Tyler Cowen: Trump Seizes the Means of Production at Intel,” I can’t help but laugh at the biting irony when he exclaims:
Milton Friedman’s longstanding insistence that government funding will, sooner or later, mean government control has now come to pass. The Democrats are not so much shocked as catatonic and lacking much of an effective response. But it is they who are responsible for making so much of the economy dependent on federal government funding. And now, they are learning lessons to their distaste when it comes to science funding, DEI in universities, and now, tech companies.
I laugh not because I disagree, in fact, I couldn’t agree more with Tyler who points out the hypocrisy of the political duopoly.
If you agree with the Republicans, then you likely believe that if/when the top quartile (e.g., the investor or shareholder class) gets a government subsidy then it’s distinctly not socialism, instead you rationalize that it’s incentivizing economic growth. But if those same dollars subsidize the working class through social safety nets, then it is socialism. These are the types of dogmatic rationalizations that lead to unfairness and inequality and speak to the heart of why we have a class war in our country.
Thomas Sowell tops the list of my favorite economists, economic historians, and social and political commentators. It’s hard to argue with the wisdom that:
You cannot subsidize irresponsibility and expect people to become more responsible.
And oh how irresponsible we’ve become.
If you've been following my writings here on fairnessmatters.vote, you know I'm no fan of the duopoly and the media fear-mongering they use to divide us to profit and/or retain power.
Back in Ch 2.7 | 👊Can you define socialism?, I dove deep into how the politics industry has weaponized the word “socialism” to shut down debate and vilify the other side. In that chapter, I argued that corporate welfare is already a form of socialism for the rich—think PPP loans, massive bailouts, or tax cuts that trickle up, not down. These subsidies and other forms of government intervention in markets are always fraught with moral hazard.
The Intel Deal: What Happened and Why It Matters
This leads us to the deal the President has “cut” with Intel. It fits right into that conversation. No surprise it’s drawn fire from traditional conservatives and labeled as "socialist." Nor is it a surprise that progressives like Bernie Sanders and Elizabeth Warren are nodding in approval. Trump, the ultimate anti-establishment wildcard, has somehow bridged a divide and has the support of his political rivals. The irony is delicious.
Let's unpack this balanced-like, without the partisan spin, and see if it really signals a slide toward socialism—or if it's just a pragmatic policy that attempts to bring fiscal responsibility to our government subsidies already fraught with moral hazard.
For those catching up, the Trump administration is claiming that they’ve converted about $9-11 billion in federal funding—originally grants and loans from the bipartisan 2022 CHIPS Act—into a non-voting 10% stake in Intel1.
The goal? Bolster U.S. chip manufacturing, reduce dependence on foreign suppliers (hello, Taiwan and China tensions), and ensure taxpayers get a slice of the pie if (and it’s a big if) Intel turns things around. For what it’s worth, Intel's been hemorrhaging cash, with massive losses and layoffs, so this isn't exactly betting on a sure thing. But Trump calls it a "free" win because he is repurposing Biden-era subsidies transforming the funds from bailout to investment.
On the surface, it's industrial policy with teeth: Government invests, gets equity, and ties it to national security.
But let’s be clear, this Intel deal smacks of a bailout in disguise, let's zoom in on the company's dire straits—struggles that make the government's intervention feel less like a shrewd investment and more like propping up a flailing giant at taxpayer expense. As of mid-2025, Intel is hemorrhaging cash, posting a staggering $19 billion in recent losses amid botched foundry expansions and fierce competition from nimbler rivals like TSMC and Nvidia, who dominate advanced chip production. The stock has plummeted over 60% year-to-date, prompting massive layoffs of 15,000 employees—over 15% of its workforce—in a desperate bid to slash costs, while former CEO Pat Gelsinger warned of further pain ahead and was replaced as CEO in March 2025 by Lip-Bu Tan. Delays in U.S. fab projects, underwhelming AI chip performance, and a shift away from its once-dominant PC market have left Intel gasping for relevance in a tech landscape that's evolved beyond its grasp. Critics have called it a "waste" on a failing firm, echoing my Chapter 2.7 point on corporate welfare: Why bail out the investor class with repurposed subsidies when the working class gets labeled "socialist" for far less? If this is "America First," it better deliver, or it's just another handout widening the class divide.
But this isn’t just about Intel.
Commerce Secretary Howard Lutnick just pointed out that Lockheed Martin makes 97% of its revenue from the federal government.
If we are adding fundamental value to your business, I think it’s fair for Donald Trump to think about the American people.
It’s great political theater. And it rings true. As he points out, when 97% of your revenue comes from one customer — the taxpayer — you are already a quasi-public entity. The only difference is that all the upside goes to executives and shareholders while all the risk sits with citizens. Calling Lockheed “private” is a charade. Exactly why I’ve always argued we are a hybrid economy!
So what’s fairer? To pretend Lockheed is a free-market firm while it lives off taxpayer contracts? Or to finally give taxpayers a stake in exchange for footing the bill?
The same can be said of companies like SpaceX and Tesla—both helmed by Elon Musk. These companies perfectly illustrate the partisan double standards on government intervention that I've called out before. These firms have raked in billions in federal contracts, loans, and incentives: Tesla with over $2 billion in subsidies and tax credits to jumpstart EV production, and SpaceX landing more than $15 billion in NASA and Defense Department deals that Musk himself admits were crucial to survival.
Some on the political left once applauded these as strategic investment in green tech and space innovation for the greater good, much like their support for working-class programs. Of course the irony is that the political right defend it as smart business boosting American competitiveness—yet they'd cry "socialism" if similar funds went to universal healthcare or debt relief.
But flip the script to the Intel deal, and suddenly the lines blur: Trump's equity stake echoes the same "corporate welfare with a return" logic, demanding accountability from subsidies that too often enrich the investor class without strings. It's not pure socialism, as I defined in Chapter 2.7, but it exposes the class war hypocrisy—handouts are fine when they prop up billionaires and corporations, but taboo when they level the playing field for the working class. If we're serious about conscious capitalism, why not extend equity demands to SpaceX or Tesla, ensuring workers and taxpayers share in the upside from public dollars? Imagine if the government had invested those billions instead, and the government owned 10% for those companies. The ROI would have been enormous.
Now, tying this back to my earlier chapters: In Chapter 2.7, I highlighted how we already have "socialism for the investor class"—entitlements like bailouts and subsidies that flow upward. Remember the PPP program or the 2008 auto bailouts, where the government took stakes in GM and Chrysler? This Intel move echoes that, but with a twist: It's proactive, not reactive, and framed as transforming a bailout into a “deal”
The Political Irony: Trump, the Progressive Darling?
Here's where it gets deliciously ironic—and a bit mind-bending for anyone stuck in the duopoly's left-right binary. Trump, who built his brand railing against "socialism" and big government, is now earning praise from the very progressives he's spent years demonizing.
Bernie Sanders: The self-described democratic socialist said, "If chip companies profit from generous federal grants, the taxpayers of America have a right to a reasonable return on that investment." Spot on, Bernie—this aligns perfectly with my point in Chapter 2.7 about ensuring subsidies come with strings for accountability.
Elizabeth Warren: She quipped that Trump "appeared to have stumbled onto an idea she had pushed for years" on corporate accountability. Warren's long advocated for equity stakes in exchange for bailouts, seeing it as a check on corporate greed.
Meanwhile, the Republican Party is fracturing. Free-market purists like Rand Paul call it "a step toward socialism," Erick Erickson dubs it a "paradigm shift towards socialism," and Steve Moore blasts it as "terrible corporate welfare." Even Sen. Todd Young, a CHIPS Act co-author, says this wasn't the law's intent. But others, like Rep. Mike Haridopolos, back it for strengthening supply chains and taxpayer returns.
Trump's an anomaly here—a populist who defies neat labels. He's not ideological; he's transactional. This isn't about redistributing wealth for equality's sake (a hallmark of socialism). It's "America First" economics: Protect jobs, secure tech dominance, and make sure the government isn't a chump. In a way, it mirrors the "conscious capitalism" I discuss in Ch 3.10 | Capitalism and Monetary Policy, where aligning incentives between investors, workers, and society creates shared prosperity. Think Silicon Valley's employee stock programs or Ownership Works initiatives from private equity firms like KKR.
The irony? The right's "socialism" boogeyman is being wielded by their own guy, while the left cheers. It exposes how hollow the label has become—used to bash anything that challenges the status quo of upward wealth transfer. As I wrote before, the duopoly thrives on creating enemies; this deal scrambles that script.
But Is This Socialism? Let's Apply the Definitions
Alright, lightning rod time—let's get definitional, just like in Chapter 2.7. I laid out the spectrum there: Capitalism (unfettered markets, but prone to inequality and exploitation), socialism (government ownership of major industries for collective benefit), democratic socialism (worker-focused, anti-authoritarian twists on that), and social democracy (capitalism with strong safety nets, like the Nordic model of Social Democracy).
So, does Trump's Intel stake qualify as socialism?
No, It's Not Traditional Socialism: Socialism involves broad government control or ownership of the "means of production" to ensure equitable distribution. This is a minority 10% stake in one company, without voting rights or day-to-day meddling. No nationalization of tech, no forced wealth redistribution. It's more like a sovereign wealth fund investment (e.g., Norway's oil profits funding stakes in global firms) than Venezuela-style takeovers.
It's Not Even Democratic Socialism: Bernie-style policies emphasize worker ownership and safety nets, not government equity for national security. Sanders supports this deal, but as a step toward accountability, not a full ideological shift. As I noted in Chapter 2.7, Sanders himself rejects government owning grocery stores or means of production—he wants fair wages and standards, which this deal indirectly supports via job protections.
Closer to Social Democracy or State Capitalism?: If anything, it's a mixed-economy tweak, blending free markets with targeted intervention. Nordic countries do this all the time: Capitalist at core, but with government stakes in strategic sectors for public good. Or look at China's state capitalism, where the government invests in firms for global edge—though Trump's version is far less controlling. In my view, this is "corporate welfare with a return," flipping the script on subsidies that usually enrich shareholders without reciprocity.
That said, I’m not advocating for this deal. It has a high likelihood of opening the door to more intervention, distorting markets and picking winners and losers (Intel over AMD?). If expanded unchecked, it risks cronyism or inefficiency.
But calling it socialism? That's hyperbole, akin to Fox News slamming Warren Buffett for supporting higher taxes on the wealthy.
Such vilification prevents nuanced discussion.
If anything, it looks less like socialism and more like a sovereign wealth fund maneuver — Norway’s oil fund, Singapore’s Temasek — except in America, where we usually pretend subsidies are “free-market” even as they tilt the playing field.
For balance, here's a counterpoint: If we're okay with socialism for corporations (bailouts, tax breaks), why cry foul when it demands a return? But if this becomes a pattern—equity in defense firms next?—we must watch for authoritarian creep, where government influence stifles innovation.
Tying It Back: Lessons for Fairness and the American Dream
This deal reinforces what I've been hammering: Our system's rigged toward class warfare, pitting investors against workers. In Chapter 3.10 | Capitalism & Monetary Policy, I argued for "conscious capitalism"—ensuring businesses provide paths to prosperity, like employee ownership spreading from Silicon Valley to Wall Street. Trump's move could fit that if it ties Intel's success to U.S. jobs and security, not just executive bonuses.
But let's not romanticize: Without fairness, as I consistently warn, we'll face civil unrest or extreme overhauls. Trump's anomaly on Intel (with more to come) shows bipartisanship is possible on economic nationalism, but it won't fix deeper issues like education costs or wealth gaps.
What can you do? Dig beyond labels. Don’t reject policies that demand accountability from subsidies out of fear of your parties boggieman - in this case “socialism”.
Before you judge, read up on Nordic social democracies. According to many (not everyone), they are successful because their politics and economy are based on a political ideology that does not reject capitalism while at the same time offers a form of socialism. It sounds contradictory, but social democracy is an ideology that does just that. They balance capitalism with fairness, ranking high on anti-corruption indices.
And the USA? We rank a pathetic 24th. Read that again. The United States of America ranks 24th on the anti-corruption index… Is that the America that we aspire to?
Bottom line: While Trump's Intel deal isn't socialism (perhaps it’s a pivot in a flawed system or perhaps it’s an unnecessary step away from the free markets), but it exposes ironies, challenges dogmas, and reminds us that real solutions lie in rejecting political dogma and finding common sense solutions to the problems we face. Let's evolve capitalism to include everyone—or risk the extremes taking over.
We must find a way to give the vast majority of Americans true representation and common-sense solutions stripped of its partisan agendas!
And remember Bari Weiss's definition of true liberalism from Chapter 2.7: Equality under law, individual over tribe, reason over mob. That's the center we need.
Share this post if it resonates, and let's discuss in the comments. What's your take—is this smart policy or slippery slope?
Legal experts and media commentators have raised concerns about the precedent and statutory basis for such an acquisition, questioning the Commerce Department’s real authority absent direct congressional approval. In general, Presidential powers do not extend to acquiring substantial equity stakes in private corporations without Congressional mandate—for instance, during the 2008-2009 financial crisis, Congress approved government stakes in companies through laws like the Emergency Economic Stabilization Act and the Troubled Asset Relief Program (TARP). These moves were subject to extensive legislative debate and oversight, highlighting Congress’s constitutional control over federal spending and property.