During the 2016 presidential election, Elon Musk was no fan of Donald Trump — the Tesla and SpaceX CEO didn’t think the celebrity businessman was the right guy for the job.
But now that President Trump has the job, Musk has shifted his views. He’s joined Trump’s council of business advisors and also has become a member of a Trump administration initiative to create more US manufacturing jobs.
I don’t think there are two brains more un-alike that Musk’s and Trump’s on planet Earth. Adding to all this is Musk’s endorsement of former ExxonMobil CEO Rex Tillerson as Secretary of State — a stunning development given Musk’s ardent belief that global warming is an existential threat and that humanity needs to exit the fossil-fuel era as quickly as possible.
So what gives?
After Elon Musk, the Tesla and SpaceX CEO, met with Donald Trump on Monday, he has shared that he is optimistic about about Trump’s Secretary of State pick, former ExxonMobil CEO Rex Tillerson. Musk replied to an Economics post on Twitter stating that Tillerson could be an excellent Secretary of State. Musk went further and outlined why he holds such a seemingly counterintuitive opinion.
A visionary who also has to be a businessman
It’s important to remember that Musk runs two companies (and really three, given Tesla’s 2016 acquisition of struggling SolarCity) that have been highly dependent on the US government for everything from Department of Energy loan guarantees back when Tesla was facing extinction in 2008-09 to SpaceX’s billion-dollar-plus launch contracts with NASA.
Musk has often been dinged for this — often by right-leaning GOP and probably Trump supporters who thinks Musk lives off government handouts — but Musk hasn’t sought to diminish the debt his companies owe to the American people. You could argue that he’s now going about paying it back, in a Trump-friendly manner, by increasing his US-based manufacturing operations at Tesla and SpaceX, including the construction of a massive battery factory in Nevada.
Musk could be hiring tens of thousands of American workers over the next decade. He could build numerous factories. He could colonize Mars and create vast new opportunities to construct Red Planet casinos, golf courses, and gilded human habitats for the Trump Organization.
Seriously, Musk is by nature a visionary who also has to function as a businessman, which I quite honestly think isn’t second-nature to him. Instead, he operates opportunistically, and in Trump and possibly even more so Tillerson he sees a very big opportunity, once that he’s already enhanced by gaining White House access.
‘The unpriced externality’
With Tillerson, Musk has clearly found a person who can pressure Trump on a carbon tax, something that Musk called for in late 2015, during a speech at the Sorbonne in Paris.
“We have to fix the unpriced externality,” he said, pointing out that pollution is classic negative externality in economic terms that causes harm to all, but cost to none. He called it a “hidden carbon subsidy of $5.3 trillion per year.”
Tillerson supported a revenue-neutral carbon tax when he was at ExxonMobil as the best way to de-incentivize carbon generation. Economist and policymakers often agree, but some also think a carbon market would be a more effective means to halting global warming.