Trump’s wealth in the century

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Rising tide lifts all mega yachts. As net worth goes, Elon Musk falls into one category. Since Donald Trump won re-election on November 5, Musk’s wealth has jumped by nearly two-thirds to $440 billion. At this rate, he will easily become a trillionaire during a Trump presidency. Laggards, like Meta founder Mark Zuckerberg and Amazon’s Jeff Bezos, are getting in on the act. Both gave $1 million to Trump’s inaugural committee, a traditional way to gain support for the incoming administration. Their fortunes also jumped. America is going through the largest deregulation in history.

Will this rising tide also lift small boats – the blue-collar Americans who voted for Trump back into office? This is what Trump promised would happen. One of the main reasons he won so many working-class votes was that working people in America remembered his first term when real median incomes increased before the pandemic hit. But macroeconomic conditions have changed sharply since then. Trump inherited a world with zero interest rates in 2017. And this time, monetary restrictions are in place. The inflationary effects of renewed Trump tax cuts will be rapid. Blue-collar America is likely to be disappointed.

The same will not be true for America’s ultra-high-net-worth individuals — especially those with stakes in artificial intelligence and cryptocurrencies, Trump’s two most ardent industry backers. The extent of Musk’s conflict of interest as co-chair of Trump’s misnamed Doge of Government Efficiency is unprecedented. Just like the Holy Roman Empire, which was neither Roman nor empire nor holy, the Doge is not a government administration, nor is efficiency its true goal. Musk says his goal is to cut $2 trillion from the budget — roughly a third of federal spending. But this would be impossible without cutting the US defense budget, as well as Social Security and Medicare, which Trump has pledged to respectively increase and maintain.

This leaves the domestic discretionary budget – education, food stamps, infrastructure and so on – amounting to less than $1 trillion. I bet Musk will fail to convince Congress to give up his fiscal power. But Congress will enact Trump’s tax cuts. The net result will be a growing US budget deficit, which will reach an already high 6.4% of GDP in 2024. The growing fiscal deficit will lead to higher borrowing costs. This will hit the middle class twice: in the larger share of the US budget eaten up by debt service; And their personal profits are hit by higher real interest rates.

But Musk’s real goal with Doge is deregulation. Market expectations that he will succeed in overturning the regulations have fueled his sky-high net worth. From the rising value of Dogecoin, in which Musk has a stake, to Tesla, SpaceX, Neuralink, and xAI, all of Musk’s companies are thriving. Given the scope and complexity of Musk’s interests, it will be difficult for the media, Congress and other oversight bodies to keep track of the multiple processes at stake. Those obvious ones include Tesla’s dilution of liability for its self-driving system, a bump in Pentagon contracts with SpaceX, which are mostly classified, and all sorts of green lights for Musk’s investments in artificial intelligence and brain chips.

Musk is first among equals. But others from the original “PayPal mafia” that founded the online payments company, most notably Peter Thiel and David Sachs, are also benefiting. The stock price of Palantir Technologies, Thiel’s data analytics company that has huge contracts with the Pentagon (most of them also classified), has risen by about a quarter since November 5. Palantir is now worth more than Lockheed Martin, the old model for the US defense industry. complicated.

Trump has too specific Sachs as Crypto Czar. One of Trump’s campaign promises was that the Federal Reserve would add cryptocurrency to its balance sheet. If this goes ahead, the US central bank will essentially support what many economists consider a Ponzi scheme. Not surprisingly, Bitcoin’s value has risen to over $100,000 since Trump’s victory. “You’re welcome,” Trump posted on the social media platform Truth Social, when Bitcoin passed the milestone.

It is often noted that corruption is legal in the United States. No one is claiming that Musk or Trump are violating any laws because of this conflict of interest. The real judge is politics. With less than half the national vote, Trump presides over an evenly divided country, but he demands a sweeping mandate to remake America. Winners are already reaping unimaginable rewards. All of this is happening before Trump even gets into office.

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