Elon Musk and conflicts of curiosity in Trump administration – DW – 11/20/2024 | EUROtoday

Loads has been written concerning the budding friendship between President-elect Donald Trump and the world’s richest man, Elon Musk.

What appeared like an odd pairing has become a job alternative for Musk and, previously week, the 2 have been seen collectively in Palm Beach, Florida, ringside at an Ultimate Fighting Championship match in New York and consuming McDonald’s on a jet.

Before the election, Trump introduced he would put the South Africa-born Tesla CEO in control of a authorities effectivity fee. Last week, Trump made it extra concrete and confirmed the brand new company might be referred to as the Department of Government Efficiency, or DOGE.

What is Musk’s new job?

Since it’s a new company, nobody actually is aware of what it can do and what authority it can have. In the top, it can possible be a small advisory group that operates exterior of the federal government with none actual regulatory authority. What it’s prone to have is affect and a loud mouthpiece within the type of Musk.

The Department of Government Efficiency goals to slash the US federal funds — which totals roughly $6.8 trillion (€6.4 trillion) in fiscal 2024 — by $2 trillion in an effort to completely downsize the federal authorities by slicing forms, rules and wasteful expenditures.

Though Musk is thought for slicing prices at his personal companies, lowering federal spending might be a giant problem. The challenge is meant to wrap up by July 2026.

Donald Moynihan, a professor of public coverage on the Ford School of Public Policy on the University of Michigan, thinks Elon Musk has “no real experience with government beyond suing it or spreading conspiracy theories about it.” He instructed DW that the federal authorities must be modernized, “but the only thing Musk has talked about is cutting costs and punishing people he disagrees with. His basic math does not add up.”

In 2023, a third of the then $6.1 trillion funds went to social safety and Medicare — packages Trump has mentioned he wouldn’t contact. Overall, solely $1.7 trillion was discretionary spending that lawmakers management by means of appropriation acts, in line with the nonpartisan Congressional Budget Office.

SpaceX and a billion-dollar battle of curiosity

Musk already has so much on his plate working six corporations like Tesla, SpaceX and X (previously Twitter). Such a brand new place is rife with conflicts of curiosity, particularly since numerous his corporations obtain authorities subsidies or direct federal contracts, making them authorities contractors. They additionally develop and use improvements and expertise which have pushed regulatory boundaries.

“I cannot think of another instance of someone with such clear and obvious conflicts with a public official offering advice on the budget, structure and removal of employees that directly affect his businesses,” mentioned Moynihan. “It is cartoonishly corrupt.”

Over the years, SpaceX has obtained billions in contracts from NASA and the Department of Defense to launch satellites, service the International Space Station or use its Starlink satellite tv for pc communication community.

Over the previous decade, these SpaceX contracts got here in at greater than $15 billion, in line with numbers crunched by the New York Times. Last 12 months alone, his corporations received 100 completely different contracts with 17 federal companies totaling $3 billion.

SpaceX celebrates milestone in reusable rockets

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Some of the opposite conflicts of curiosity

Musk has a file of very public altercations with federal departments and different regulators. An investigation by US monetary market regulator, the Securities and Exchange Commission (SEC), led to expenses of securities fraud in 2018. Stepping down as Tesla’s chairman was a part of the later settlement.

Tesla has obtained large tax breaks and different incentives from numerous states. On the federal stage, it has a small authorities contract to produce some autos. But Musk might persuade Trump to maintain tax credit for electrical autos (EVs) in place to maintain up gross sales, or enhance tariffs on rivals that make autos in Mexico or wherever else.

He might affect regulators who need to look nearer at Tesla’s self-driving push. He might additionally persuade these in energy to maintain emission guidelines in place that permit Tesla to promote credit value billions of {dollars} to different automakers that don’t produce sufficient EVs.

Musk’s different corporations, xAI, The Boring Co, Neuralink and X, haven’t any authorities contracts. Still, they’ve so much to achieve from being near Trump. This closeness might propel synthetic intelligence AI), affect different rules or assist block social media rival TikTook.

Could the Trump-Musk friendship finish?

Trump shouldn’t be the primary president who needs to chop spending or has referred to as in effectivity consultants. What is completely different this time is who the President-elect is looking on and the probabilities of private achieve.

So far, Trump has been cautious to say that Musk wouldn’t be an official a part of the chief department of presidency and solely “provide advice and guidance from outside of government, and will partner with the White House and Office of Management & Budget to drive large scale structural reform.”

This is essential as a result of federal legislation prohibits folks from participating in authorities issues the place they’ve a monetary curiosity.

The most unpredictable a part of this entire challenge is Trump himself. He has an extended monitor file of choosing favorites after which all of the sudden dropping them. Dropping the world’s richest man could possibly be an irresistible ego increase to Trump in the future.

They are two huge personalities who love the limelight, however Trump “cannot stand to be upstaged,” says Moynihan. Keeping this unlikely relationship going might be a problem equal to slicing trillions. “In some ways, assigning Musk to an advisory committee might be seen as a demotion, since it is not clear if it will get anything done.”

Edited by: Uwe Hessler