The 'DOGE' jokes are easy, but Musk's new side hustle is Tesla's biggest advantage yet: Morning Brief

11/14/2024 18:12
The 'DOGE' jokes are easy, but Musk's new side hustle is Tesla's biggest advantage yet: Morning Brief

Taking Musk's government efficiency department as a joke underestimates what he might do with this newfound power.

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The clowning started immediately.

Just as President-elect Trump announced “the Great Elon Musk” and “American Patriot Vivek Ramaswamy” would co-lead a new department to slash government waste, Sen. Elizabeth Warren pointed out that having two people do the job of one leader isn’t exactly a model of streamlined efficiency.

Others described the appointment as Trump relegating the outspoken pair to the kids' table, an assignment to insignificance, a limp concession.

But taking the presidential gesture as a joke underestimates what Musk might do with this newfound power. And that's something analysts and investors are keenly attuned to — just look at the stock.

Musk has railed against what he sees as government overreach, much of which comes from personal experience. He’s taken particular aim at the Federal Aviation Administration over purported licensing and safety-related violations at his company SpaceX. Musk’s spacecraft outfit has also secured billions of dollars in federal contracts over the last decade.

What’s more, Musk’s array of companies has been the target of several probes and lawsuits by federal agencies. By becoming the czar of DOGE (Department of Government Efficiency), Musk will be charged with shrinking (or hamstringing) the very institutions that are supposed to be watching over his companies.

(Musk has already suggested eliminating hundreds of existing agencies and cutting the more than $6 trillion annual budget by $2 trillion.)

But what are entanglements if not opportunities?

Like Trump, Musk is adept at waving away conflicts of interest by taking on the mantle of public champion. Musk knows where to cut because he is a businessman confronted everywhere by red tape. Other leaders concerned about decorum might worry about the appearance of corruption. But to Musk, his business aims are a reason to lean in. His zealous self-interest is in your best interest.

What about anxious Tesla (TSLA) investors who have already suffered through years of Musk’s “distractions”? Again, the rising share price of the electric vehicle company since Election Day is an answer to that question.

In a very meaningful sense, Musk’s antics, his public feuding, and his pivot into national politics make up the thing he is selling. If Tesla’s true product is its stock, Musk’s true value is his evangelism.

On X, Musk highlighted that his leadership of DOGE won’t be an official government role, giving him the space and freedom to continue running Tesla. The department, which doesn’t currently exist or have congressional backing, is also set to conclude its work by Independence Day, 2026, giving Tesla investors another reassurance that Musk won’t be permanently engaged.

But that too is a hedge. Musk’s extracurriculars, however off-putting to many people, have served Tesla shareholders. Forging an alliance with a president who is not shy about punishing his enemies and rewarding those loyal to him is a shiny new catalyst. It helps to have friends in high places who know that you helped put them there.

Musk can turn his latest role into another conduit for his messaging, augmenting the influence of X (formerly Twitter). As one user put it, “Elon getting a bunch of otherwise disengaged young men interested in how the government works is an existential threat to the current system in ways that cannot be quantified.”

Musk said the work of DOGE will be posted online so people can chime in if the department tries to cut something important or is ignoring spectacular waste. He said DOGE would create a leaderboard for the “most insanely dumb spending of your tax dollars.”

This is Musk the salesman, the orchestrator of spectacular stunts, far removed from producing the next generation of rockets, vehicles, and solar panels. That it would take an unelected elite — the richest man in the world — to tame the federal bureaucracy is a fitting irony.

“This will be both extremely tragic and extremely entertaining," Musk said. For whom, exactly, he didn't clarify.

Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.

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