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Your guide to what the 2024 US election means for Washington and the world

A rising tide lifts all megayachts. As far as net worth goes, however, Elon Musk is in a category of one. Since Donald Trump won re-election on November 5, Musk’s fortune has jumped by nearly two-thirds to $440bn. At this rate, he will comfortably become a trillionaire during Trump’s presidency.

Laggards, like Meta founder Mark Zuckerberg and Amazon’s Jeff Bezos, are starting to take action. Both gave $1 million to Trump’s inauguration committee, a traditional way of currying favor with the incoming administration. Their wealth also jumped. America is going through the biggest deregulatory play in history.

Will this rising tide also lift the smaller boats — the blue-collar Americans who voted Trump back into office? That’s what Trump promised would happen. A key reason he won so many working-class votes is that blue-collar America remembers his first term when real median incomes grew before the pandemic hit. But macroeconomic conditions have changed dramatically since then. Trump inherited a zero-interest rate world in 2017. This time, the monetary straitjacket is in place. The inflationary effects of a reversal of the Trump tax cuts could be swift. Blue-collar America is likely to be disappointed.

The same does not apply to America’s high net worth – especially those with stakes in AI and crypto, the two most ardent supporters of Trump’s industry. The extent of Musk’s conflicts of interest as co-head of Trump’s misnamed government efficiency department (Doge) is unprecedented. Like the Holy Roman Empire, which was neither Roman, nor an empire, nor divine, the Doge was not a government department, nor was efficiency its true purpose. Musk said his goal was to cut $2tn from the budget – roughly a third of federal spending. But that would be impossible without slashing the US defense budget, as well as social security and Medicare, each of which Trump has promised to increase and preserve.

That leaves the local discretionary budget — education, food stamps, infrastructure and more — coming in at less than a trillion dollars. My bet is that Musk will fail to persuade Congress to give him power of the purse. But Congress will implement Trump’s tax cuts. The net result is a growing US budget deficit, which at 6.4 percent of GDP in 2024 is already high. A growing fiscal deficit leads to higher borrowing costs. That hits the middle class twice: with a larger portion of the US budget being eaten up by debt servicing; and the hit to their personal bottom line through higher real interest rates.

But Musk’s real goal with Doge is deregulation. Market expectations that he would succeed in scrapping the regulations boosted his soaring value. From the rising valuation of Dogecoin, in which Musk has a stake, to Tesla, SpaceX, Neuralink and xAI, all of Musk’s companies are thriving. Given the size and complexity of Musk’s interests, it will be difficult for the media, Congress and other oversight bodies to keep a check on the many games at stake. The obvious ones include a relaxation of Tesla’s liability for its autonomous driving system, an improvement in SpaceX’s contracts with the Pentagon, which are largely classified, and all sorts of green lights for Musk’s AI and brain chip investments.

Musk is the first of the equals. But others from his original “PayPal mafia” who launched the online payment company, notably Peter Thiel and David Sacks, also benefited. The share price of Palantir Technologies, Thiel’s data analytics company with several contracts with the Pentagon (most of which are also classified), has increased by almost a quarter since November 5. complex.

Trump too TEACH Sacks as his cryptocurrency czar. One of Trump’s campaign promises was that the Federal Reserve would add cryptocurrency to its balance sheet. If that continues, the US central bank will essentially be backstopping what many economists see as a Ponzi scheme. No wonder the value of Bitcoin has risen above $100,000 since Trump’s victory. “You got it,” Trump posted on Truth Social, his social media platform, when Bitcoin crossed that milestone.

It is often said that in the US, corruption is legal. No one is saying that Musk or even Trump broke any laws on these conflicts of interest. The real judge is politics. With less than half of the national vote, Trump leads an equally divided nation but claims a huge mandate to remake America.

The winners are already reaping unimaginable rewards. All of this happened before Trump was in office.

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