Tech titan Elon Musk took to Twitter recently to share yet another controversial take, this time espousing his belief that a recession would be “good” for the American economy.
Writing late Thursday night in response to a Twitter user’s question about whether the US was headed towards another recession, the Tesla CEO replied with an emphatic, “Yes”.
He then went on to explain why this economic downturn, which for most Americans would be viewed as a bad thing (during the 2008 housing crisis, 3.6 million jobs were lost, and more than one million homes were lost to foreclosure), was, in his view, a net positive.
“Yes, but this is actually a good thing. It has been raining money on fools for too long,” the richest person on the planet tweeted. “Some bankruptcies need to happen.”
The SpaceX founder’s late-night remarks arrive just weeks after he’d made a speculative prediction that the US was “probably” headed for another recession, which by his estimates would last a year to a year and a half.
“These things pass and then there will be boom times again,” Musk said during a guest appearance at the All-In Summit in Miami Beach earlier this month.
His remarks then, much like this week’s tweets, seemed to highlight the tech billionaire’s disapproval of the current administration’s management of the economy.
“This administration, just, it doesn’t seem to get a lot done,” he noted during the speaking engagement this month.
Fears about an impending recession have grown in recent months as the Federal Reserve has tightened up the country’s monetary policy – such as increasing its benchmark interest rate by half a percentage point, the biggest hike in two decades – in an attempt to rein-in the 40-year high inflation.
The odds of a downturn in this year, according to a recent Bloomberg monthly survey, remain relatively low (at 30 per cent).
But Musk, for his part, believes that a recession is not only inevitable, but will serve as a rude awakening to the companies who implemented work-from-home policies, a group that the Tesla founder took a swipe at in the same set of tweets from this week.
“Also, all the Covid stay-at-home stuff has tricked people into thinking that you don’t actually need to work hard,” he tweeted, before adding, “Rude awakening inbound!”
Musk, a frequent critic of government overreach, who memorably said that he’d file a lawsuit if his Tesla company was unable to reopen when Covid-19 shutdowns forced him to close the doors on his factories, has also been a vocal opponent of government subsidies.
During the opening of Tesla’s new plant in Austin, Texas last December, Musk was asked about the then-yet to be voted on Build Back Better legislation, a massive social spending bill that would’ve overhauled the US social safety net and help move that US economy away to more climate-friendly provisions.
“It might be better if the bill doesn’t pass,” he said, before punctuating that remark with, “I’m literally saying get rid of all subsidies.”
Though publicly he may posture to be opposed to government assistance, behind closed doors, Musk’s companies have been served well by subsidies and tax breaks. Insider reported in July that Tesla revealed in its Securities and Exchange Commission filing that it received “certain payroll related benefits” in response to the pandemic.
And in a separate investigation with The Los Angeles Times, the news outlet found that Tesla, SolarCity and SpaceX combined had benefited from “4.9 billion in government support”.
Included amid that multi-billion-dollar support? A $465m low-interest loan from the Department of Energy in 2010 that held the electric car company coast through the lingering economic fallout of the 2008 Great Recession.
