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Your guide to what the 2024 US election means for Washington and the world
The rising tide is lifting all the megayachts. As far as economic growth goes, however, Elon Musk is in one category. Since Donald Trump won the election on November 5, Musk’s fortune has risen by almost two-thirds to $440bn. At this point, he will be a good trillionaire for the Trump presidency. Laggards, like Meta founder Mark Zuckerberg and Amazon’s Jeff Bezos, are starting to take action. Both have donated $1mn to Trump’s inauguration committee, a traditional way to celebrate the incoming presidency. Their wealth has also jumped. America is going through the biggest deregulation drama in history.
Will this increase lift the small boats – the Americans who voted Trump back into office? This is what Trump promises will happen. The main reason he won the majority of labor votes was that America-collar remembered its first period when the middle income grew before the pandemic. But macroeconomic conditions have changed significantly since then. Trump adopted a zero-interest country in 2017. This time, the financial crisis has begun. The inflationary effects of Trump’s tax reform will be immediate. Blue-collar America deserves to be disappointed.
The same doesn’t apply to America’s high net worth — especially those with stakes in AI and crypto, two of Trump’s favorite supporters. The scale of Musk’s controversy as head of Trump’s popular department (Doge) is unprecedented. Like the Holy Roman Empire, which was neither Roman, nor imperial, nor holy, the Doge is not a government department, nor is it its true purpose. Musk says his goal is to cut $2tn from the budget – about a third of the federal budget. But this will not be possible without destroying the US defense budget, as well as social security and Medicare, which Trump has promised to increase and save accordingly.
That leaves the domestic budget — education, food stamps, infrastructure and the like — which comes in at just under a trillion dollars. My bet is that Musk will fail to convince Congress to relinquish his power over the wallet. But Congress will re-enact Trump’s taxes. The result will be a reduction in the US budget, which at 6.4 percent of GDP in 2024 is already high. A weaker economy results in a higher cost of borrowing. This will affect the middle class twice: in a large part of the US budget to be consumed by debt repayment; and the collision of their personal values through the real interest.
But the real goal of Musk and Doge is to reduce it. The market’s hope that he will succeed in repealing the rules has fueled the rally. From the rising price of Dogecoin, which Musk has a stake in, to Tesla, SpaceX, Neuralink and xAI, all of Musk’s companies are growing. Given the diversity and complexity of Musk’s interests, it will be difficult for the media, Congress and other regulatory agencies to keep track of several high-stakes plays. Notables include a relaxation of Tesla’s mandate for its self-driving cars, the number of SpaceX contracts for the Pentagon, which are widely distributed, and all kinds of green lights for Musk’s AI and chip investments.
Musk is the first of his kind. But some from his “PayPal mafia” who founded the online payment company, especially Peter Thiel and David Sacks, are also benefiting. The share price of Palantir Technologies, Thiel’s data analytics company that has major contracts for the Pentagon (which is also widely distributed), has grown by almost a quarter since November 5. Palantir is now more valuable than Lockheed Martin, the old model of the American defense industry. difficulties.
Trump too chosen ones Search like its cryptocurrency tsar. One of Trump’s campaign promises was that the Federal Reserve would add cryptocurrency to its balance sheet. If that were to happen, the US central bank would be bailing out what many economists see as a Ponzi scheme. It is no wonder that the price of Bitcoin has risen above $100,000 since Trump’s victory. “You’re welcome,” Trump wrote on Social Truth, his social media platform, as Bitcoin passed a milestone.
It is often said that in the US, bribery is legal. No one is saying that Musk or Trump are violating any laws and conflicts of interest. The real judge is the politician. With half the national vote, Trump presides over a divided nation but says he has a major responsibility to rebuild America. The winners are already reaping untold blessings. All of this is happening before Trump is in office.
