Ethical issues and conflicts of curiosity – DW – 11/20/2024 | EUROtoday

Quite a bit has been written in regards to 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 accountable for a authorities effectivity fee. Last week, Trump made it extra concrete and confirmed the brand new company can be referred to as the Department of Government Efficiency, or DOGE.

What is Musk’s new job?

Since will probably be a brand 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 outdoors 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 finances — which totals roughly $6.8 trillion (€6.4 trillion) in fiscal 2024 — by $2 trillion in an effort to completely downsize the federal authorities, chopping paperwork, rules and wasteful expenditures.

Though Musk is understood for chopping prices at his personal companies, decreasing federal spending can be a giant problem. The venture 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 Musk has “no real experience with government beyond suing it or spreading conspiracy theories about it.” He informed 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 finances went to social safety and Medicare — applications Trump has mentioned he wouldn’t contact. Overall, solely $1.7 trillion was discretionary spending that lawmakers management by means of appropriation acts, in keeping with the nonpartisan Congressional Budget Office.

SpaceX and a billion-dollar battle of curiosity

Musk already has a lot on his plate working six firms like Tesla, SpaceX and social media platform X. Such a brand new place is rife with conflicts of curiosity, particularly since a lot of his firms obtain authorities subsidies or direct federal contracts, making them authorities contractors. They additionally develop and use improvements and know-how 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 keeping with numbers crunched by The New York Times. Last 12 months alone, Musk’s firms signed 100 completely different contracts with 17 federal companies totaling $3 billion.

Some different conflicts of curiosity

Musk has a document 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 fees of securities fraud in 2018. Stepping down as Tesla’s chairman was a part of the later settlement.

Tesla has obtained big tax breaks and different incentives from varied states. On the federal degree, it has a small authorities contract to provide some automobiles. But Musk may persuade Trump to maintain tax credit for electrical automobiles (EVs) in place to maintain up gross sales, or improve tariffs on opponents that make automobiles in Mexico or wherever else.

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

Musk’s different firms, xAI, The Boring Co, Neuralink and X, haven’t any authorities contracts. Still, they’ve lots to achieve from being near Trump. This closeness may propel synthetic intelligence, affect different rules or assist block social media rival TikTookay.

Could the Trump-Musk friendship finish?

Trump shouldn’t be the primary president who has wished 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 chances of non-public 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 collaborating in authorities issues the place they’ve a monetary curiosity.

The most unpredictable a part of this complete venture is Trump himself. He has an extended observe document of choosing favorites after which abruptly dropping them. Dropping the world’s richest man might be an irresistible ego enhance to Trump at some point.

They are two massive personalities who love the limelight, however Trump “cannot stand to be upstaged,” mentioned Moynihan.

Keeping this unlikely relationship going might be a problem equal to chopping 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,” he mentioned.

Edited by: Uwe Hessler