Many experts said it was only a matter of time before the bromance between Donald Trump and Elon Musk would go south. This past week, we all got a front-row seat as their partnership blew up like a 50-megaton hydrogen bomb, leaving devastation in its wake.
You might wonder: what does this soap opera between two megalomaniacs have to do with money or the economy? The answer is everything. The great danger of a federal government as large and powerful as ours is that it has the ability to choose winners and losers in business. Politicians can reward their friends, punish their enemies, and play as big a role in a corporation’s success as any market force.
As details of the new “Big Beautiful Bill” emerged, Elon Musk was one of the first to voice opposition. He criticized the vast amounts of pork in the bill and railed against government waste in Washington. His critiques are valid, but let’s be honest: I suspect what really motivated Musk’s outcry was that the pork was no longer going to him.
If passed, this bill would significantly reduce or eliminate the massive subsidies and tax credits enacted under President Biden to incentivize electric vehicle (EV) purchases. That would severely harm Tesla’s bottom line. Meanwhile, the bill includes generous payouts to union autoworkers and manufacturers as a reward for their political support in helping Trump win re-election last year.
As you might imagine, Musk viewed these actions as a massive slap in the face, especially given that he too played a key role in helping Trump win re-election in 2024, and has seen a significant loss in the value of Tesla since heading up the Department of Government Efficiency (DOGE)
To be fair, I’m not sure Trump is thrilled with all the junk in this bill either. But he believes that without the extension of the tax cuts, the U.S. could slip into recession, an outcome that would damage both his agenda and his legacy. Now, more seasoned in the ways of Washington, he feels compelled to support the bill despite its flaws.
The feud fully boiled over late last week. As tensions continue to escalate on social media, Musk has come out in support of Trump’s impeachment and is claiming Trump appears in the Epstein files. In response, Trump is threatening to pull all government contracts from Musk’s businesses while publicly calling him “crazy” and a “drug addict.”
The real lesson here is that we must stop giving billionaires, both inside and outside of Washington, so much power. The way to do that is by dramatically reducing the size and scope of the federal government. The incestuous relationship between big business and big government is a cancer on our society. One cannot thrive without the other; by shrinking one, we shrink the other.
For too long, crony capitalism has reigned supreme. Many once believed, wrongly, that Donald Trump would be the antidote to this corrupt system. Sadly, it’s clear to me that he is not. Even if he wanted to change Washington, which I’m not sure he does, no real change can happen until we first strip away its vast power.
In the end, it is we the people who should hold that power; and it’s time we take it back.
(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)