The first of the Ten Commandments is “No other Gods” and if you don’t respect that one, the rest are meaningless because you could take your moral cues from another God who thinks that one or more of God’s 10 commandments is “eh, who cares?”
I have always been taught, and recently confirmed with every source known to man, that the First Commandment of capitalism, the one which primarily distinguishes capitalism from socialism, like God from the devil, and good from evil, is “Thine government shalt not own the means of producing wealth,” or words to that effect.
Now, our government has taken a 10% equity stake in Intel. It did not purchase a 10% stake. It TOOK a 10% stake, by “renegotiating” the terms attached to the money Intel received from President Biden’s “CHIPS ACT.”
IS THIS UNIQUE?
...some say 'no'
During the 2008 financial crisis, the government took a controlling stake (60%) in General Motors to prevent its collapse—and later sold it off. I vehemently opposed those moves by both Bush and Obama, moves which became significant whipping boys for the then-nascent Tea Party movement.
President George W. Bush initiated the GM bailout with loans. That didn't work to save GM, so President Obama restructured the bailout into equity after GM filed for Chapter 11 bankruptcy in June of 2009. The federal government provided about $30 billion more in financing and took a 60% equity stake in the “new GM.”
Obama’s auto task force oversaw the restructuring, renegotiating labor contracts, and forcing leadership changes. The government gradually sold off its shares, fully exiting GM by 2013.
From day one of the Obama-restructuring (May 31, 2009), Treasury stated it was a “reluctant equity owner” and would dispose of its GM stake “as soon as practicable.” That exit intent was written into the administration’s principles for managing the ownership stake. That promise did not quiet the Tea Party – or me!
Even though this was an act to rescue a failing, heritage American manufacturing company and the intention, announced early, was to divest as soon as possible, I opposed it vehemently, as did everyone in the Tea Party movement, demonizing anyone, Republican and Democrat alike, who supported it.
We ridiculed Sen. Lamar Alexander who reveled in his cleverness when he described it as pulling a car out of the ditch.
INTEL IS DIFFERENT (but not better)
…Introducing the “strategic subsidy conversion”
The Intel stake is designed as “passive, non-controlling,” and structured as a “strategic subsidy-conversion,” not a rescue of a failing business.
The government has no plans to sell Intel. Rather, this appears to be the first in a new government venture to create a “Sovereign Wealth Fund” filled with large shares of equities in the most productive wealth producers in the U.S, starting with chips companies who received CHIPS ACT money.
But, don’t worry, the government says, they won’t be “controlling” those industries.
"The government won’t hold board seats or participate in governance. It is required to vote in line with Intel’s board in situations that require shareholder approval," reported Barrons. "The government must hold the shares for at least one year; afterward, it can sell them on the open market," reported the Washington Post.
Treasury Secretary Scott Bessent insists the “non-controlling” clause in the "strategic subsidy conversion" that President Trump negotiated with the Intel CEO (who came to the White House with hat in hand after Trump said he should be fired for his involvement with China) is a wall of separation between “ownership” and “control,” and therefore the deal does not violate the First Commandment of capitalism.
Color me skeptical.
I screamed at the TV as I watched the reputed conservative on CNBC’s “Squawk Box” try to convince himself that taking an equity stake in exchange for the “CHIPS” money the Biden administration gave to Intel is “an improvement.”
Biden bribed chips companies to try to solve the alleged crisis that “not enough chips are produced in the U.S.”
Trump is “renegotiating” Biden’s bribe -- which many companies took only because Biden wanted them to and gave them sweetheart terms to accept the money
In those "renegotiations," Trump is demanding a large equity stake in the companies to compensate the government for Biden’s bribes.
Why is the First Commandment the First Commandment? Because without it, the rest are merely suggestions from one of many sources. You don’t like that suggestion. Pick another from a different source.
Why is the First Commandment of capitalism the First Commandment? For the same reason. This changes everything we’ve ever known and relied on about capitalism. And it’s just the start. I have no idea where it will take us, but I know this. Without capitalism, the world, and especially the U.S. would be a lot poorer.
And, we no longer have a capitalist economy. That is not an opinion. That is a fact.
Ralph Bristol is a former popular local conservative radio talk show host with Super Talk 99.7 (WTN 99.7) where he worked for 11 years. He is now semi-retired.
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