Trump’s bonanza of the century
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A rising tide lifts all the megawatts. However, Elon Musk’s net worth has risen by about two-thirds to $440 billion under Trump’s presidency trillionaire. Underdogs like Meta founder Mark Zuckerberg and Amazon’s Jeff Bezos both contributed $1 million to Trump’s inauguration committee, a traditional way to curry favor with the incoming administration. America is going through the biggest deregulation game in history.
Will this rising tide also lift the smaller boats, the blue-collar Americans who voted Trump back into office?That’s what Trump promises will happen. The main reason he won so many working-class votes was that blue-collar America remembered his first term, when real median incomes rose before the pandemic hit. But since then, macroeconomic conditions have changed dramatically is a zero interest rate world in 2017. This time the straitjacket is on. The inflationary effects of Trump’s tax cuts will be swift. Blue-collar America is likely to be disappointed.
The same will not apply to high net worth America, especially those with stakes in AI and crypto, two of Trump’s most ardent supporters of the industry Like the Roman Empire, which was neither Roman, nor an empire, nor holy, the Doge is not a state administration, nor is efficiency his real goal. Musk says his goal is to cut $2 trillion in federal spending, but that won’t be possible without cuts to the U.S. defense budget and to Social Security and Medicare, which Trump has promised add and save respectively.
That leaves the domestic discretionary budget — education, food stamps, infrastructure, etc. — of less than a trillion dollars. My bet is that Musk won’t be able to convince Congress to give up his power of the purse. But Congress will pass Trump’s tax cuts. The net result will be a growing US budget deficit, which is already high at 6.4 percent of GDP in 2024 A fiscal deficit will lead to higher borrowing costs, which will hit the middle class twice. A larger share of the US budget has been consumed by debt service. and hit their personal bottom through higher real interest rates.
But Musk’s real goal with Dodge is deregulation. The market’s expectation that he will succeed in overturning the regulations has fueled his rising net worth. companies are on the rise.Given the scope and complexity of Musk’s interests, it will be difficult for the media, Congress and other watchdogs to scrutinize the many plays at stake. The obvious ones include Tesla’s loosening of responsibility for its autonomous driving system, SpaceX’s boom in Pentagon contracts that are largely classified, and all kinds of green lights for Musk’s AI and brain chip investments.
Musk is first among equals. But other members of his original “PayPal Mafia” that founded the online payments company, notably Peter Thiel and David Sachs, are also benefiting from the value of shares in Palantir Technologies, Thiel’s data analytics company, which has large Pentagon contracts (also mostly). classified), up nearly a quarter since Nov. 5. Palantir is now worth more than Lockheed Martin, the old-world paragon of America’s defense industry. complex.
Trump has too appointed Sacks as his cryptocurrency czar. One of Trump’s campaign promises was that the Federal Reserve would add cryptocurrencies to its balance sheet. If this goes ahead, the US central bank will essentially reverse what many economists see as a Ponzi scheme. It’s no surprise that the value of Bitcoin has soared since Trump’s victory surpassed $100,000. “Welcome,” Trump wrote on Truth Social, his social media platform. when Bitcoin crossed that milestone.
It is often mentioned that corruption is legal in the USA. No one is claiming that Musk, or indeed Trump, is breaking any laws because of this conflict of interest. The real judge is politics. With less than half the national vote, Trump presides over an evenly divided nation, but claims a sweeping mandate to rebuild America. The winners are already reaping incredible rewards. All this is happening even before Trump takes office.
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