Economist Warns Against Government Involvement in Private Sector
Steve Moore cautioned during an appearance on Fox Business that government interference in the private sector could be problematic.
Commerce Secretary Howard Lutnick mentioned that the U.S. government will acquire Intel’s stock interests in return for funding related to chips and science in a statement made on Tuesday. In the “Kudlow” segment, Moore criticized the approach of the chip and science initiative, which has allocated over $50 billion in subsidies aimed at enhancing domestic semiconductor manufacturing.
“They’re going to turn Intel into Amtrak… I really dislike this idea. It originates from the Chips Act, which I remember well. I, along with others, voted against that absurd plan which aimed to stimulate U.S. chip production through substantial government subsidies,” Moore remarked.
He emphasized that government subsidies tend to warp private industry, asserting that initiatives like the Chips Act distract companies like Intel from meeting customer needs and instead compel them to seek federal funding.
“It didn’t yield positive results. Intel faced setbacks because when companies like them divert their attention from their customers to pursue government funds, they end up in trouble,” Moore noted. “The government shouldn’t own American companies — that’s socialism,” he added.
The Trump administration is reportedly exploring the possibility of changing shares into equity interests, which could result in the government holding approximately 10% of Intel, making it the company’s largest shareholder, according to Bloomberg. Simultaneously, SoftBank Group has pledged $2 billion to Intel, while Washington aims to rejuvenate manufacturing to enhance job creation.
Former President Joe Biden enacted the Chips Science Act in August 2022, designating $39 billion for direct investment to ramp up U.S. chip production. Nevertheless, companies like Taiwanese semiconductor firms, Intel, and Microchip Technology have struggled to expand, pushing back their timelines as chip sales declined, while promised funds from the Biden administration have been delayed.
