Subsidies, Sanctions, & SpaceX: Musk’s Gambit in the Post-Truth Political Economic Environment of Modern Republicanism
What are the odds of Elon Musk’s personal bankruptcy over the next decade, anyway? In my view, they have just gone up a lot. Musk thought power came with a price tag. But he was wrong, and now is...
What are the odds of Elon Musk’s personal bankruptcy over the next decade, anyway? In my view, they have just gone up a lot. Musk thought power came with a price tag. But he was wrong, and now is—I think—desperately trying to see how much veto-point power his money & his ideology can buy. For Musk failed to recognize, as many failed to recognize, that Trump charges upfront—but then does not deliver unless you give him an extra reason to do so. So we are now seeing what happens when a chaos-monkey grifter capitalist misreads a chaos-monkey grifter president. Musk thought he had a deal—he backs Trump all the way, and in return Trump would provide him with EV subsidies, tariff carve-outs, and control of the NASA budget. Musk was wrong. And so we get to watch what happens next…
I still do not have a Musk follow-up op-ed. But I did have thoughts:
And now I have more thoughts:
This has now become interesting to watch in real time:
Donald Trump <https://bsky.app/profile/atrupar.com/post/3lquphecg2z23>: ‘All of the sudden [Elon Musk] had a problem, and he only developed the problem when he found out we're gonna have to the cut EV mandate...’
‘He hasn't said bad about me personally but I'm sure that'll be next. But I'm very disappointed in Elon…’
“When Elon Musk came to the White House asking me for help on all of his many subsidized products, whether it’s his electric cars that don’t drive long enough, driverless cars that crash, or rocketships to nowhere, without which subsidies he’d be worthless, and telling me how he was a big Trump fan and a Republican, I could have said “drop to your knees and beg”, and he would have done it…’
For Elon Musk, it almost certainly seemed to him as though there was no downside. Keep your culture-war friend close, and your potential existential business-threat enemy closer. And so:
Trump agreed with Musk’s right-wing culture war priorities,
But Trump the candidate with his applause lines was a potential existential threat to Musk’s key businesses—Tesla and SpaceX.
Without those businesses, Musk was a bankrupt ex-Silicon Valley has-been
Trump was transactional.
Hence: propose a transaction:
I, Musk, will become your largest donor,
your greatest cheerleader,
the guy who takes the heat for cutting discretionary spending.
And in return:
you, Trump, give SpaceX all the NASA money,
you keep the subsidies flowing that keep consumers buying Tesla EVs,
and you give me carve-outs to tariffs, so that Tesla can be profitable and expanding as a globalized value-chain production-network operation.
Musk, however, did not recognize one thing.
He, however, was not alone. Musk’s problem now is something that a great many people who have thought that they had Trump’s number have failed to recognize.
What is it? It is this:
Trump is only transactional when he has to plunk his cash down on the barrelhead first.
When Trump doesn’t have to do that, he is not transactional at all.
As Elon Musk has now found out.
So what is Musk trying to do now?
I think that what Musk is doing now is trying to save both SpaceX and Tesla from bankruptcy. He is trying to do so by demonstrating to Trump that he, Elon Musk, has power. He is trying to demonstrate to Donald Trump that he, Elon Musk, can harm Trump. He is trying to demonstrate to Donald Trump that he, Elon Musk, has the power to assemble and maintain a Purity-Republican fiscal-conservative Senate voting bloc large enough to send Trump's tax cut bill down in flames.
Thus Trump had better back off. Trump has better give Musk his subsidies for Tesla as an EV manufacturer, his tariff carve-outs for Tesla as a globalized value-chain production network, plus all of the NASA money for SpaceX. Or else.
Does Musk in fact have this power? Who knows? It is going to be an interesting contest in post-modern political economy: How many Republican senators can Elon Musk rent, for how long, with a combination of fiscal-conservative budget-balance Purity-Republican ideology, plus cash?
And how much cash Elon Musk divert out of his enterprises? And how much more cash raise from financiers? Financiers willing to bet that then can loan money to Musk and not wind up stiffed because Musk will have tunneled all of his wealth into xAI, and the debts of his other entities are uncollectible?
Maybe that is what is going on.
But maybe Musk is just a ketamine-addled chaos monkey himself, acting out in unfocused and unfought rage right now.
Politico's Calder McHugh wrote in his review of Rian Johnson's Glass Onion in 2022: "Johnson also adds a new dynamic to the satire: The rich are not only evil; many of them are preternaturally stupid, their legitimacy propped up only by the deference of those around them. The result is an allegory for all of us living with the omnipresent Elon Musk, Donald Trump and Jeff Bezos."
With Trump threatening to revoke Musk's contracts and investigate his businesses, bankruptcy could come faster than you thought. We are long past being a serious country.