Dueling Headlines At Real Clear Politics

The Real Clesr Politics formula is to take polling results across the spectrum, wildly off to more or less accurate, average them together, and pretend it's a meaningful result. They take the same approach with the stories they link: one from, say, the far-left Guardian, one from center-right Fox News, and pretend you can average them out to get to the truth. They were a little cattywampus today, one from Batya Ungar-Sargon at The Free Press, The Elon-Trump Bromance Crashes and Burns, and one from Victor Davis Hanson on X, Musk, Trump Have Same Enemies; Makes No Sense To Fight

In this case, Batya Ungar-Sargon seems to be well-researched and thoughtful center-right, while Victor Davis Hanson tends to rely on farther-right truisms and cliches. Apoparently RCP's editors think we should average this stuff out. But my immediate reaction to Hanson's assertion was, "Elon Musk is his own worst enemy; that's not Trump's problem."

Batya Ungar-Sargon goes into Musk's business model, which suggests that Musk always had serious conflicts of interests going in, which Trump seems to have recognized and was prepared to deal with:

The New York Times reported that the Pentagon was scheduled to brief Musk on a military plan relating to a “potential war” with China. The president learned of the meeting via the Times report, which infuriated him.

“What the [redacted] is Elon doing there? Make sure he doesn’t go,” Trump said, according to an Axios report. “POTUS still very much loves Elon, but there are some red lines,” an official explained to Axios. “Elon has a lot of business in China and he has good relations there, and this briefing just wasn’t the right thing.”

As Trump himself explained to reporters, “Certainly you wouldn’t show [military plans] to a businessman,” adding, “Elon has businesses in China, and he would be susceptible, perhaps, to that.”

. . . Of course, the president was right: While Teslas made in the U.S. are by and large produced here, many of the Teslas Musk sells across the globe are produced in China, as is some 40 percent of its battery supply chain, meaning his fortune, to some degree, rests on being in the good graces of Xi Jinping and the Chinese Communist Party. It would have been a monumental conflict of interest for Musk to have been in that meeting.

Ungar-Sargon moves on to federally mandated electric vehicle tax credits, which other sources point out have made the difference between profit and loss for Tesla in recent years. Politico recognized this in a story from this past January 15, before Trump's inauguraton:

Elon Musk has said America is being “strangled to death” by regulations. But the billionaire’s car company, Tesla, might not have survived without them.

The electric automaker earned $10.7 billion from selling credits created by government climate programs — a total that accounted for a third of Tesla’s profits over the last decade, according to an analysis of securities filings by POLITICO’s E&E News. In the first nine months of 2024, some 43 percent of its net income came from those credits, which Tesla sold to rival carmakers after exceeding climate mandates in California and elsewhere.

Now President-elect Donald Trump, whose campaign was bankrolled with the help of Musk, is threatening to pull the plug on some of the environmental programs that have powered Tesla’s rise. That is prompting questions about whether Musk will seek to protect rules that have helped make him the world’s wealthiest person, or if he’ll support Trump’s promise to put the brakes on federal initiatives for electric vehicles.

But let's back up a little. There are suggestions of other business conflicts in Musk's close involvement in the Trump administration:

“We don’t confirm Schumer donors in this administration,” said a source close to the Trump team — referencing the quiet but decisive move to pull billionaire entrepreneur Jared Isaacman from consideration as the head of NASA under the second Trump Administration.

. . . Isaacman, who led SpaceX’s Inspiration4 and its Polaris Dawn missions, is widely seen as a top private-sector collaborator with Elon Musk in the space economy. The two men share a close working relationship, with Musk praising Isaacman publicly on multiple occasions and Isaacman being one of the highest-profile civilian astronauts in Musk’s SpaceX orbit.

. . . “This seems something that could have possibly set Elon off,” said one GOP strategist. “That is understandable- he is close to Isaacman. I am not saying this was the only thing, but I speculate it could be a factor."

According to NPR,

Musk's companies have long been fueled by taxpayer money, whether in the form of massive government contracts, low-interest loans, tax breaks and other support that helped make Musk one of the world's richest people.

Over the past two decades, companies run by Musk have received tens of billions of dollars in federal backing.

One tally, by The Washington Post, found that at least $38 billion in government support has been funneled to Musk's companies, an estimate that likely undercounts the breadth of support since some defense and intelligence contracts are not publicly available.

. . . Jeffrey Sonnenfeld, an associate dean at the Yale School of Management, said further pain for Tesla could eventually plunge Musk's riches.

"Tesla is hugely reliant on federal largesse for the build-out of EV charging infrastructure, not to mention federal regulatory approval for his continued autonomous driving and robotics experiments," Sonnenfeld said.

"His wealth is highly precarious," he said, noting that most of Musk's fortune is tied to his stake in Tesla. "The reality is that Musk's position is far weaker than many realize."

Ungar-Sargon's Free Press piece also brings up Musk's AI business and his attempts to circumvent Trump's policy moves:

The Wall Street Journal reported that during the president’s much ballyhooed trip to the Middle East, Musk worked hard to try to derail a deal between the United Arab Emirates and his competitor Sam Altman’s OpenAI, if the deal didn’t include his own AI start-up. Musk reportedly went so far as to warn a firm belonging to the brother of the president of the UAE that their plan to build the world’s largest AI data center in Abu Dhabi with OpenAI “had no chance of President Trump signing off on it unless Musk’s xAI was included in the deal,” reported the WSJ.

This, it turned out, was nonsense, and the OpenAI deal went through, angering Musk.

It's been less reported that Musk's AI company, xAI, effectively rescued his disastrous purchase of Twitter by using X's data:

Not only has X served as Musk's political megaphone — it has also been a lucrative source of training data for one of the billionaire's other ventures, xAI, a startup that has rocketed to a $50 billion valuation in 16 months.

That fresh valuation means xAI has surpassed Musk's purchase price for X. It came with a $5 billion funding round, which The Wall Street Journal reported was backed by the Qatar Investment Authority and Sequoia Capital.

. . . The startup has made up significant ground on its rivals by using X as a source of third-party data, one of the key avenues for training large language models.

However, it appears that in at least the United Arab Emirates deal, Musk's influence with Trump wasn't enough to swing things in his favor, adding to the impression that Musk's financial position is more precarious than people might surmise.

In all of Musk's current enterprises, from X/Twitter to AI, to SpaceX and the Mars colony objective, to Tesla, Musk has had to keep being lucky. Especially with Twitter, his lenders have had to keep supporting him on the basis that he's too big to fail. It sounds as though his lenders and his board members -- Larry Ellison is both -- have had to rein in his worst instincts in recent days, but Musk has a history, for instance in his impulsive purchase of Twitter, of making bad decisions from which his lenders have had to bail him out.

The other problem is that many of his enterprises are based on risky future contingencies that could easily collapse: AI, especially "general AI", is potentially a hoax. The idea of colonizing Mars is a chimera. The success of electric vehicles depends on continued government support. Musk's instability, now on clear display, isn't a good feature to factor in with these other circumstances.