Latest news with #Musks
Yahoo
6 hours ago
- Business
- Yahoo
Elon Musk, the Budget, and the Coming Labor Crisis
Other than the president himself, no one has had a greater impact on the first months of the new Trump administration than Elon Musk. Not only was Musks support critical in getting Donald Trump elected, but his empathy-free approach at the newly formed Department of Government Efficiency (DOGE) made headlines that dominated news cycles while helping flood the zone with contentious and newsworthy actions designed to overwhelm an already exhausted public. Even after departing his government role, Muskcontinued - in rather spectacular fashion -exerting outsized influence on American politics. His incendiary opposition to the administrations "big beautiful" budget bill significantly complicates the path for congressional Republicans eager to prove their loyalty to the president. Until Musks spectacular split with the president, support for the worlds richest man broke almost entirely along partisan lines. For Republicans, he was lauded for a willingness to tackle the difficult and thankless task of taking on an entrenched bureaucracy. For Democrats, he was an oligarch looking to use his government role to enrich himself while callously demeaning civil servants. But there was always more nuance to what the worlds richest man was doing in Washington. While Elons DOGE efforts were often ham-handed, his opposition to the Republicans expensive budget bill reinforces the belief that he genuinely wants to help the government become more effective stewards of taxpayer dollars. Musks detractors have suggested his efforts were entirely self-serving, an attempt to curry favor with Trump to benefit all the companies in his orbit. Sen. Elizabeth Warren, for instance, recently released a report outlining as many as 130 instances where Musk "potentially" used his government role and proximity to Trump to enrich himself. But there was less to this critique than meets the eye. A close reading of Warrens report reveals that most of the items listed are related to things that might benefit Musk and his companies in the future. They were speculative benefits, in other words. Moreover, Musk swiftly eroded the goodwill he had accumulated with the president, likely eliminating those speculative benefits while simultaneously reinforcing the view that his approach to DOGE was principled, regardless of its effectiveness. In raw dollar terms, no one has sacrificed more financially to serve in the U.S. government. From the time of Trumps inauguration to April 22, the date Elon Musk announced in a Tesla analyst call that he would be returning to the automaker, Tesla stock fell by more than 45%. In the process, it erased more than $80 billion from Musks net worth - an amount that, by some analysts estimates, exceeds the net savings from the DOGE efforts. Yes, a few of Musks other businesses may have benefited from his government service, but the magnitude of any such gains is far less than the loss he suffered on Tesla stock. While more than half of those paper losses have been recovered since Musk signaled a return to his company, its not clear Teslas fortunes in the auto business will ever rebound. Teslas impact on Musks net worth is, however, a less relevant issue than what the company is signaling about the direction of American life. Despite single-handedly transforming the automobile industry, Teslas dominance in the electric vehicle space is now gone. So, why does the company still command a trillion-dollar valuation in the equity markets? A simple analysis of its stock suggests its value is not about its car business. That realization is a window into the future. As of the end of May, Teslas market capitalization exceeded $1.1 trillion - more than the value of the next nine auto companies combined. This is despite the fact that Tesla sells fewer cars than all but three of those companies. With a brand in free fall, declining sales and profitability, and rising competition from Chinese manufacturer BYD, it would be hard to argue that Teslas auto business should trade at a premium to other manufacturers. Assuming Teslas auto business is worth roughly the same amount as Mercedes Benz, General Motors, or BMW (all companies with unit sales at least 30% greater than Teslas and lacking Teslas significant brand issues), the selling of cars would account for a paltry 5% of Teslas implied value. Solar City, on the other hand, could be worth as much as twice its rival First Solar, given its relative size. Assuming thats correct, another $30 billion or 3% of Teslas valuation is explained by the worth of Teslas solar power and energy storage division. Even adding in the $24 billion of net cash Tesla has on its balance sheet, we have a company worth between $100 and $110 billion - one-tenth of what the market says Tesla is worth. So, why has the market rewarded Tesla with a valuation thats roughly 10 times the sum of its operating businesses? What do investors see in Tesla that they dont see in other similar companies? The answer would seem to be Musks investment in future technologies, most notably humanoid robots (Musk says hes going to sell a million devices at $30,000 a piece by 2030 and is positing a future where there is one humanoid robot for every person on the planet) - not to mention self-driving vehicles. In short, 90% of Teslas valuation is about one thing - eliminating jobs currently held by Americans. This isnt a future entirely inspired by Musks vision alone. Dozens of major companies are charting a course in this direction. In some ways, its a natural evolution of a number of technological advances in material science, artificial intelligence, energy storage and management, and sensors and perception. So, while Musk has been a lightning rod for all sorts of criticism and approbation, our leaders would be wise to examine what his company is telling us about the future - and legislate appropriately. From a policy standpoint, the questions that need to be answered are obvious. How will Americans feed themselves and their families when the job they depend upon is being done by a machine? How will the job destruction from these technological advances affect tax receipts, which are overly dependent on income taxes? How will Americans find fulfillment in life without work? How can we best share the benefits of this fourth industrial revolution to ensure they arent overly concentrated in a few hands? Policymakers failed to realize the impact of early automation and offshoring on average Americans, leading to significant income and wealth concentration. They cant make the same mistake again. Our leaders ushered in an era of globalization, during which imports as a percentage of GDP increased by three times from 1970 to the present. We now have $4 trillion of imports flooding our shelves, giving Americans access to low-cost electronics, clothing, and other consumer goods. While average Americans benefited from these price reductions, as a country, we largely overlooked those Americans who lost their jobs as a result of these import gains. In fact, weve never spent more than a billion dollars annually on trade adjustment assistance, 4,000 times less than the imports we have coming on shore every year. Compounding the mistakes of globalization by neglecting the implications of whats about to come will lead to an even more alienated and divided electorate. America wont survive the outcome of that policy failure. Greg Orman is a Kansas entrepreneur, author of 'A Declaration of Independents,' and a former independent candidate for governor and senator of his state. His website is
Yahoo
07-05-2025
- Business
- Yahoo
Washington Should Take Efficiency Seriously
DOGE is saving billions and its doing what voters asked for. As someone who has represented the United States abroad, first as ambassador to Hungary and later as U.S. chief of protocol, Ive seen how American leadership is measured not just by strength or ideals, but by functionality. Our allies watch how we govern ourselves. And too often, what theyve seen in recent decades is an increasingly bloated federal government, mired in duplication, inefficiency, and bureaucratic inertia. Thats why the work of the Department of Government Efficiency, or DOGE, deserves serious consideration. Led by Elon Musk, DOGE has taken on a task that most administrations have promised but failed to achieve: modernizing how our federal government operates. It has consolidated overlapping offices, canceled wasteful contracts, sold underutilized properties, and implemented data-driven reforms, all aimed at reducing cost, improving performance, and saving taxpayer money. Since it began in January,DOGEhas either cut or reduced grants, leases, and contracts in over 176 departments or agencies. On its website the department reports saving $160 billion. For comparison, thats more than the entire annual budget of the Department of Transportation. Even according to independent data and analysis, DOGE efforts have already generated billions in savings. This is not a theoretical exercise in reform. It is tangible, measurable, and aligned with what the American people have repeatedly said they want: a government that delivers more by doing less. Polling backs this up. A FebruaryHarvard CAPS/Harris pollfound that 72% of Americans support the existence of an agency focused solely on eliminating waste and inefficiency in government. A clear majority (60%) said they believe DOGE is helping to rein in unnecessary federal spending. Thats not a left-wing or right-wing perspective; thats a mainstream one. DOGEs creation may have sparked controversy, particularly among those uncomfortable with Musks unconventional approach and public persona. But we shouldnt allow style to eclipse substance. If government is functioning more effectively and at a lower cost to taxpayers, then we must look seriously at how those outcomes are being achieved, and what lessons can be responsibly applied more broadly. Having served in federal roles that demand strict compliance with law, protocol, and tradition, I know firsthand that reform must operate within the boundaries of our values. Rule of law and adherence to institutional norms are non-negotiable. Yet so, too, is the need for honest appraisal: Much of our federal bureaucracy has become outdated, sprawling, and resistant to change. Streamlining is not an assault on government. It is, in fact, an affirmation of it - an attempt to make public institutions worthy of public trust. Of course, DOGEs approach is not without flaws. Musk himself has candidly admitted as much. Critics have questioned whether all reported savings are fully verified, and transparency around decision-making needs improvement. Oversight is not only appropriate - its essential. But the existence of imperfections should not be a pretext for dismissing a bold, productive effort to modernize government. We cannot let perfect be the enemy of progress. Its a time-honored tradition in Washington for good ideas to wither under partisan suspicion. But government reform should not be the property of any one party. For decades, both Republicans and Democrats have campaigned on promises to cut waste, modernize services, and rein in unnecessary spending. DOGE is doing what many in both parties have failed to do: take those promises seriously. The real question is not whether DOGE is controversial - it is. The real question is whether it is effective. So far, the evidence suggests that it is. The challenge ahead is to preserve that momentum, institutionalize the best of what DOGE is doing, fix mistakes, and ensure it is guided by transparency, accountability, and legal rigor. This moment presents a rare opportunity: the chance to reshape how government operates in a way that is more responsive to the people it serves. Instead of vilifying reformers, we should come together around a shared goal that transcends politics: building a government that works. If DOGE continues to help us get there, it deserves not derision, but support. Nancy Brinker served as U.S. ambassador to Hungary and as chief of protocol during the George W. Bush administration. She is the founder of the Susan G. Komen Race for the Cure and the Promise Fund.
