Will Elon Musk Get the Jack Ma Treatment

Elon Musk was the biggest donor to the Trump election campaign. This has allowed him to raise his political profile to a very public level.

He has sat in on telephone conversations between President Trump and other heads of state. He is also heading up a government efficiency department with Vivek Ramaswamy.

Musk has made no secret of his belief that he is was kingmaker in this election. That’s unlikely to sit well with the President.

I am reminded of Jack Ma and his run in with the Communist Party. As recently as 2020 he was among the wealthiest people in the world, had a larger-than-life global public persona and dominated the Chinese new technology sector.

His Icarus moment came when he used a speech to criticise the financial regulators. He accused them of stifling growth and innovation. That was a clear attack on the ability of the Communist Party to plot the path of the financial sector.

Their response was to neuter Alibaba. The ANT Financial IPO was cancelled. Alibaba was split up. Jack Ma disappeared for several months and was stripped of his title as CEO. When he returned, he was a chastened individual who eschewed the public eye.

The message was clear. Money is important, but one should never mistake it for power.   

Elon Musk is running a significant personal risk.

He wants to create a benign regulatory environment for autonomous vehicles. He wants to make DOGE the currency of a colony on Mars. His business successes are truly impressive but is he aware that stealing the limelight from the most powerful person in the world is not a good idea.

News today that the incoming Trump administration plan to cut the EV tax credit hit the shares of both Tesla and Rivian. Is that a warning to Musk, that he should stick to business and leave the politics to elected officials?

The so-called Department of Government Efficiency (DOGE) looks like a poisoned chalice. According to the Bureau of Labor Statistics, the US government has over 23 million employees. That is about 1.2 million more than a decade ago.

Culling that number is going to be difficult. Increasing the productivity of public sector workers is notoriously difficult. They are represented by a large union and the threat of strike action usually deters extended political interference. Putting outsiders in charge of the effort provides room to blame them if it turns into a mess, which is a realistic possibility.