Musk Stirs The Trump 2.0 Inner Circle — And Adds In A Splash Of Cronyism – CleanTechnica

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Tesla CEO Elon Musk is now an integral part of the Trump 2.o administration. How Musk will fare in the long haul is yet to be determined — Musk’s mercurial nature may be, ultimately, undone by Trump’s furious outbursts and inability to maintain attention or loyalty for extended periods. Perhaps Musk will continue to fund Trump 2.0 by endowing the current transition period, which follows the roughly $200 million he spent to help elect Trump. More cash may keep Trump’s angry intensity at bay — at least in the short term.

A series of unsettling steps is underway behind the scenes at Mar-a-Lago, where Musk is onsite, vying for power by using his status as the world’s richest person to gain influence.

History Repeats Itself in Trump 2.0: Say Goodbye, “Liberal Consensus”

In her Substack this weekend, historian/writer Heather Cox Richardson reminds us that the US Founders rejected a world in which an impoverished majority suffers under the rule of a powerful few. In the middle of the nineteenth century, Republican President Abraham Lincoln began the process of adjusting American liberalism to the conditions of the modern world. While the Founders had focused on protecting individual rights from an overreaching government, Richardson notes that Lincoln realized maintaining the rights of individuals required government action.

Later, FDR, Eisenhower, and Truman helped to construct a “liberal consensus” in which US citizens rallied behind a democratic government that regulated business, provided a basic social safety net, promoted infrastructure, and protected civil rights. Once-and-future President Trump has little respect for such a “liberal consensus,” and Musk has aligned himself with Trump 2.0 policy plans — in fact, he’s using his ascendancy strategically to boost corporate power at the likely cost of individual rights.

DOGE: Trump has designated Musk to lead a Department of Government Efficiency (DOGE) alongside Vivek Ramaswamy. That dynamic should be interesting. Musk co-authored an essay in The Wall Street Journal with Ramaswamy that detailed more of their plan for the new agency.

“Most government enforcement decisions and discretionary expenditures aren’t made by the democratically elected president or even his political appointees but by millions of unelected, unappointed civil servants within government agencies who view themselves as immune from firing thanks to civil-service protections.”

The two intend to advise DOGE to pursue three major kinds of reform: regulatory rescissions, administrative reductions, and cost savings. Their approach will focus on implementing “executive action based on existing legislation rather than by passing new laws.”

Yet many of Trump’s previous efforts to expansively use executive powers had been struck down by courts. Moreover, as the dangerous duo attempt to cut federal spending or reduce the 2.3 million civilian workers, Congress may cast a covetous gaze. Activist groups may sue, and existing federal rules may delay cutbacks. Musk isn’t accustomed to building consensus as a top-down CEO, nor will he likely stay calm in public critiques of DOGE decisions. The DOGE road may be winding.

Insider/outsider status: Aides speaking on the condition of anonymity have chafed at Musk’s near-constant presence at Mar-a-Lago, especially given his lack of personal history with Trump. Musk has been in attendance at most Mar-a-Lago meetings. He’s attempting to balance his lack of experience in government policy creation with an insistence that “radical reform” of government will make a real difference due to “reformers” who can delve quickly and thoroughly into substantive institutional changes.

Efficiency means favoritism: Musk’s motivation behind “efficiency” is clear: he will try to cut environmental regulations, especially the ones that affect his companies. One staffer for environmental compliance told the Environmental Protection Agency that “Tesla repeatedly asked me to lie to the government so that they could operate without paying for proper environmental controls.”

After Trump announced that he was creating DOGE and putting Musk in charge of it, Musk posted, “We finally have a mandate to delete the mountain of choking regulations that do not serve the greater good.” According to the New York Times, tech executives are calling in favors to meet with Musk, and many would like to serve in the Trump 2.0 DOGE.

Musk maneuvers federal contracts: Musk’s companies have brought in at least $15.4 billion in federal contracts over the past decade, and his companies have been targeted in at least 20 government investigations recently. Trump’s victory and his appointment of Musk to an oversight role in the government “essentially give[s] the world’s richest man and a major government contractor the power to regulate the regulators who hold sway over his companies, amounting to a potentially enormous conflict of interest,” according to the New York Times.

Crony capitalism: Economist and editorialist Paul Krugman recently mused about how Trump’s intended tariffs have the potential for political favoritism of “an order of magnitude greater” than during Trump 1.0. In fact, Krugman states that “it’s very likely that crony capitalism is coming to America.” The way tariffs operate under US laws “offers so much room for discretionary enforcement” that Trump can exempt allies from tariffs. He has previously bragged that not paying his fair share of taxes makes him “smart.”

Manipulating tariffs will “lock in a large Republican financial advantage,” according to Krugman, “by guaranteeing vocal business support for Trump, no matter how much damage his policies do. It will also enrich Trump and those around him.” Enter Elon Musk.

Federal investigations into Musk’s companies: There are other potential benefits to Musk of Trump 2.0 actions. Musk has holdings that have been under much federal scrutiny, as outlined by Richardson. Although Musk says his goal is to “protect life on Earth,” his companies “show a pattern of breaking environmental rules again and again.” Tesla’s facility in Fremont, California, has received “more warnings for violations of air pollution rules over the past five years than almost any other company’s plant in California,” 112 of them. Federal regulators recently fined SpaceX for dumping about 262,000 gallons of wastewater into protected wetlands in Texas. Tesla, too, has dumped contaminated water into public sewer systems.

Tesla stock price rises: Regarding Tesla stock’s huge recent run, it’s mostly about “animal spirits/momentum,” according to UBS analysts led by Joseph Spak. rather than any change of fundamentals since the Trump 2.0 election win. UBS kept a sell rating on TSLA stock but raised its price target to 226 from 197.

The China effect: Tesla makes half of its cars in China and has its second best sales of any country there. Yet Tesla’s local competition is getting stronger. Musk has personally appealed to China’s premier, Li Qiang, for permission to proceed with what Tesla calls Full Self-Driving as the company’s market share in China has dwindled. Some experts have suggested that Beijing may be able to turn Musk into an influential ally in trying to persuade Trump 2.0 to take a more conciliatory approach on trade.