Is Elon Musk Using Trump to His Own Advantage?

Plus, Vance-Kraushaar fight; Harvard anti-Israel “die in”; Yale’s Snyder flees to Canada

Elon Musk, who is a key adviser to President Trump while also one of the world’s wealthiest individuals as the controlling owner of Tesla, SpaceX, and X (formerly Twitter), last night amplified a tweet by Jeremy Tate. Tate said, “I totally understand why teachers unions oppose school choice. I get it. As a business owner I too like the idea of not having to compete with anyone.”

Musk added the “100 percent” emoji, apparently to symbolize agreement. At the Editors, we’re all-in for school choice, and we certainly haven’t been as successful in business as Musk has. But if Musk was agreeing with the point about a business owner disliking competition in addition to the point about school choice and teachers union, then we at The Editors have a different, and more idealistic view than Musk of the role that competition plays in capitalism. It’s a shortsighted business owner who doesn’t appreciate competition. Competition among vendors and suppliers benefits the business owner as a customer. And, at best, competition also helps motivate businesses continually to improve quality, value, and service. Without ongoing competition, a business can become complacent, and the value it provides customers may slip to the point where the business eventually becomes vulnerable to a new entrant who offers a better product and price. Not competing with anyone may be a good way to extract monopoly profits at monopoly prices for a short period of time, but, aside from rare situations— “natural monopolies” such as regulated utilities—it is not a recipe for long-term business success.

But if Musk really dislikes competition so much that he will harness government power to defeat it, it potentially puts some of the Trump administration’s actions in unfavorable light. For example, the tariffs on automobiles (why automobiles, of all things?) will advantage Tesla by making vehicles sold by Tesla’s competitors more expensive to consumers. Musk has been doing impressive work cutting expenses, yet he is also, via SpaceX, a big government contractor. Tesla is in the solar energy business and is affected by all kinds of government decisions about electric car transitions, energy, and transportation policy.

A Harvard professor of practice who teaches economics, Jason Furman, had a set of social media posts this morning throwing cold water on this line of argument. “Elon Musk lost $9 billion over the last day. Rational profit maximizing oligarchy is not the right model for understanding our current public policy,” Furman tweeted. He followed with a Bloomberg screengrab showing that Musk’s net worth is down $96.2 billion year to date, making him the largest loser in absolute terms of anyone.

But maybe “year to date” isn’t the only comparison worth looking at. See the chart above, which shows that over the past six months—since before the election—Tesla has outperformed Ford, GM, and the S&P 500 Index, and is actually up about 5 percent over that term.

Maybe Musk’s plan is to generate concern about the conflict of interest, and then be forced to sell the stock—which he could then, under section 1043 of the tax code, entirely avoid paying capital gains tax on.