AEI’s James Pethokoukis: U.S.’s stake in Intel is ‘creating new problems’ with unintended consequences

[Intel Headquarters]
JasonDoiy

Economic policy analyst James Pethokoukis criticized the U.S. government’s recent stake in Intel (NASDAQ:INTC [https://seekingalpha.com/symbol/INTC]), suggesting it transforms the chipmaker from a trusted supplier into a political instrument.

In an interview with CNBC, the Dewitt Wallace Fellow at the American Enterprise Institute questioned the fundamental purpose behind the government’s investment, expressing confusion about what problem the move is intended to solve.

He noted that while the original subsidies to Intel (NASDAQ:INTC [https://seekingalpha.com/symbol/INTC]) were meant to enhance resilience in chip manufacturing for national security purposes, the government’s equity stake appears to serve different motives.

Pethokoukis highlighted the tension between traditional conservative economic principles and the current administration’s approach to industrial policy.

He suggested that some conservatives have redefined their economic views to align with presidential preferences, stating that certain policy positions “get renamed conservatism” regardless of their alignment with longstanding conservative principles.

“I tend to think that actually you’re creating new problems by creating companies which seem dependent on the government, which may have policymaking now part of their politics,” Pethokoukis explained. He expressed concern that government involvement could lead to unintended consequences and political influence over corporate decision-making.

When addressing the potential financial benefits of the government stake, he dismissed stock value increases as secondary to the intended purpose.

“The return on investment is supposed to be that Intel (INTC) with this funding will be able to turn their business around and become a reliable leading edge manufacturer of computer chips,” he stated, emphasizing that national security benefits should be the primary goal rather than short-term market gains.

But he concluded that focusing on stock performance distracts from the core objectives of U.S. industrial policy. “I think anything else is a distraction and leads to the sort of impulsive politicization of these companies,” he warned, suggesting that government involvement risks compromising the independence and effectiveness of private enterprises in the semiconductor sector.

MORE ON INTEL CORPORATION:

* Intel's Big Break: Trump, SoftBank, And Fed Rate Cuts Could Spark A Comeback [https://seekingalpha.com/article/4816145-intel-big-break-trump-softbank-and-fed-rate-cuts-could-spark-comeback]
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* Intel: Interested Parties Do Not Necessarily Interest Me [https://seekingalpha.com/article/4815738-intel-interested-parties-do-not-necessarily-interest-me]
* Intel rises even as it says new US stake ups risks [https://seekingalpha.com/news/4488912-intel-rises-even-as-it-says-new-us-stake-ups-risks]
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