Why is Elon Musk becoming an active advisor to Donald Trump?

Billionaire Elon Musk has been tasked with leading the new Department of Government Operations (Doge) for incoming President Donald Trump.

In a statement released on social media, the US president-elect said Musk – along with former Republican president Vivek Ramaswamy – will “dismantle government regulation, reduce excessive regulations, reduce wasteful spending, and reorganize government agencies”.

It’s a role the tech entrepreneur has undoubtedly prepared for through his business leadership, and one he’s spent months striving for.

But it is also one that is expected to give him control over government policy – and the regulatory environment facing his businesses.

Musk told a Trump meeting in October that he believed the US government budget could be cut by “at least” $2tn from $6.5tn. He also suggested that the number of government employees could be significantly reduced.

Meanwhile, Ramaswamy has put forward plans to abandon a number of government departments including the Department of Education, the Nuclear Regulatory Commission, the Internal Revenue Service and the FBI.

Musk has put forward his plans to improve the efficiency of the government through heroes, pointing to his hopes of one day colonizing Mars, while saying this will only happen “as long as governance is not suppressed”.

At the time, he said that creating a new Doge was “the only way to extend life beyond Earth”.

Any major cuts to government agencies could have a major impact on his business, which is closely related to the government.

Rocket company SpaceX alone has more than $8bn worth of ongoing contracts with the US government, according to public procurement sites, and could further benefit from closer government relations.

Meanwhile, his electric car company Tesla is facing investigations from a number of government agencies over issues such as the safety of its self-driving cars and the treatment of workers. His desire to reduce regulations may affect such probes.

Musk in recent years has repeatedly accused regulators of launching small probes and standing in the way of his companies.

In September he threatened to sue the Federal Aviation Administration over plans to fine his company SpaceX $633,000 for alleged license violations related to another rocket launch at Cape Canaveral in Florida. He accused the organization of “excessing the law”.

Musk “will personally benefit from a lot of deregulation,” said Christopher Phelps, a professor of modern US political history, adding: “I think putting someone who is a billionaire and who owns big companies in charge of a federal project. Deregulation is inherently fraught with conflicts of interest.”

Others say Musk, who has long described himself as a libertarian, appears to be a true believer in the benefits of small government.

“There is no doubt that Musk has a strong interest in controlling the US because of his many businesses,” Prof Gift said.

“At the same time, it’s hard to make the case that it’s the only thing driving him.

“Musk has taken great personal and political risk by working for Trump, and most of his actions and speeches seem to reflect someone who is committed to his beliefs.”

“Obviously you have skin in the game and there is selfishness, but equally you can have a sincere belief that there is too much government regulation and too much government management,” said Alex Waddan, a professor of US politics at the University. of Leicester.

For many years, Musk did not play a major role in politics, despite his great wealth, which is now worth more than $ 300bn, according to Forbes estimates.

But he spoke out against a pandemic shutdown in 2020. His criticism of the Biden administration increased after the White House did not invite Tesla to the 2021 electric car summit.

He officially endorsed Trump this year after the assassination attempt, eventually donating a reported $200m (£157m) to Trump’s 2024 presidential campaign and appearing at several rallies.

Professor Phelps describes Musk’s relationship with Trump as “commercial”, adding that the new role “gives him a lot of symbolic power – and perhaps the power to get the most important things done”.

Since the South African-born billionaire is not a natural-born American citizen, Musk cannot become president frustrated by some famous faces who were involved in politics in the past.

But he can influence US policy, and Trump will have a sympathetic adviser to call upon.

“Trump is looking to surround himself with loyalists in his new administration, and no one has been more loyal than Musk since he announced his support for Trump,” said Thomas Gift, political science professor and director of the Center on US Politics. at University College London.

“Not only did Musk go ‘all in’ in supporting Trump personally and financially during the campaign, but he also became a trusted advisor on topics as diverse as technology policy in the Ukraine war.”

In the first sign of the influence a tech entrepreneur might be rewarded for his loyalty, Musk was participated in a call between Trump and Ukrainian President Volodymyr Zelensky following the election. The war in Ukraine will be a major foreign policy issue when Trump takes office.

“That’s quite surprising,” said Prof Waddan. “Normally, even your biggest donors wouldn’t get this kind of access.”

Musk first floated the idea of ​​a cost-cutting effort while hosting Trump at X this summer. The official name is a winking reference to a a meme featuring a Shiba Inu dogwhich then gave its name to the cryptocurrency Dogecoin, Musk’s favorite, which has seen its value rise since the election.

Professor Phelps says the term is “an acknowledgment of crypto being part of what they’re going to do”.

But it’s unclear how much of Musk’s talk of cutting is likely to be real.

Among other things, the new department will not have an official role, but will provide “advice and guidance from outside the government” according to the announcement.

Experts also warned that the proposed rate cuts could be very disruptive — and backfire on Congress — depending on how quickly they are acted upon.

Musk himself has acknowledged the risks, saying Americans should be prepared to bear short-term hardships for long-term gains.

The way he has run his firms may reveal what the American people can expect.

After him October 2022 to take of social media platform Twitter – which he calls X – Musk has introduced major changes, including cutting X’s workforce from around 8,000 to 1,500 in a matter of weeks.

“His idea of ​​success was to let more people go,” said Alex Waddan, a professor of US politics at the University of Leicester.

Musk also loosened content moderation, stopped verifying accounts and welcomed users back to the site who had been banned for violating its hate speech and defamation laws.

Among the reinstated users is Trump, who was banned following a protest at the Capitol in January 2021 after he continued to say that the 2020 election was against him.

Critics say his reforms have fueled hate speech and misinformation – although Musk keeps the site politically neutral.

This redesign resulted in an exodus of advertisers, which is the main way the site made money. Although Musk has introduced new ways to raise money, such as paid subscriptions, the company today is worth far less than the $44bn Musk was paid two years ago.

Musk’s track record at his other big companies — Tesla and SpaceX — is strong.

Among car companies, Tesla stands out for making electric cars at a huge profit, due in part to efficiency. His rocket company SpaceX is credited with enabling the launch of rockets at a very low cost.

“As a serial entrepreneur, Musk has been relentless in trying to improve the efficiency of the institutions in his businesses,” said Prof Gift.

He also added that although Musk’s main role will be to “break through the red tape that is the US federal government”, his position will give him power in the new administration.

“While his role at the Department of State will be unofficial, there’s no doubt he has Trump’s ear — at least for now.”