What does Elon Musk want?

Okay, welcome back to Gary's Economics. Today, we're going to talk about Elon Musk.

Okay, so for those of you who don't know, Elon Musk is the world's richest man, and he is the owner of Twitter and Tesla. And he has recently made his big entry into politics, supporting Donald Trump aggressively. Uh, Donald Trump, of course, won the election. It looks like he will give Elon Musk an official role in the US government. And he has started intervening quite aggressively in politics in a lot of countries, including here in the UK, but also all across Europe, generally supporting the anti-immigrant, far-right, right-wing parties.

And we're going to talk today about what we can learn from that, from this, uh, this movement of Elon Musk into politics. So, I think the first thing which we can learn about this maneuver from Elon Musk is, I think it's a really good demonstration of something which I've been trying to educate, trying to illustrate a lot on this channel, which is that when the super-rich get really, really rich, that doesn't not affect you. It has an impact on you. On this channel, we talk a lot about the need to tax the rich more in order to protect living standards. And we often get the pushback, "That's the politics of envy. You shouldn't tax the rich. It doesn't matter if rich people get rich. We should focus on getting rich ourselves. The rich being rich doesn't affect us." And this is a really good example of why the rich being super-rich does affect you. The rich getting richer and richer and richer, and ordinary people owning fewer and fewer assets, that affects you because the rich are competing for the same resources that you need. There's only a certain amount of things in the economy, only a certain amount of housing, only a certain amount of education, universities, doctors, dentists, physical space in the cities. As the rich get aggressively richer, they start to consume more stuff, and that means less stuff for you. And the way that you normally see that is, for example, housing in the cities gets more expensive. That's because the rich are consuming more. The richer richer, they can pay more, they push the prices up. But it's not just housing, right? It's the same with, for example, university education, access to doctors, access to dentists, access to space in the cities. You know, you see here in London, we see a lot of pubs closing down. They're being replaced by generally housing. Whereas if you go into the center of the city, luxury hotels, luxury restaurants, theaters, they're booming. They're doing better than ever. What you're seeing here is the rich competing with you for space, out-competing with you. And the result is you get less space. And the way that you see that is generally the prices of things that you buy going up.

And I think with this Elon Musk case, we start to see another example of this, which is the rich are also competing with you for essentially the ownership of your politics, your politicians, and your media. And this has always been the case. It's the case also for economists. So, I studied economics when I was a teenager at the London School of Economics, which was, which still is, a big elite university here in London. And I got very good grades there. And I had a choice when I went to graduate. Who do you want to work for? Do I want to work for the government, trying to help the economy, trying to support the economy for ordinary people, getting paid 40, 50, 60 grand a year? Or do I want to work managing the money of the rich, getting paid one or two million pound a year? And it's not just bankers, right? It's the same for dentists. It's the same for doctors. You know, I went to a grammar school, and a lot of my friends are dentists. Um, and they can work in the NHS, or they can do Botox for rich people, and they can get paid three or four times as much, right? But it's, it's also the same for politicians. And I'm always reminded of David Cameron. So, I think the Prime Minister of the UK gets paid something like 150 grand a year. I think that's the salary. David Cameron, after he left office, he went to work for a finance company called Greensill. And I think within the first year, he made something like 10 million. Now, I want you to ask yourself, why does a finance company pay David Cameron 10 million one year after he's left office? Is David Cameron an excellent, excellent trader? Is he an excellent financial analyst? If your politicians are getting paid 100 grand a year, 150 grand a year by the people, and they can also get paid 10 million pound a year to work for the rich, who do you think the politicians really work for?

I'm also reminded of Rishi Sunak, right? You know, Rishi Sunak is a really interesting example because his father-in-law is one of the richest people in the entire world. He's a billionaire. So his, the money which Rishi Sunak gets to be Prime Minister is absolutely totally irrelevant to him. But the money that his family will get from his father-in-law, that, that is clearly enormously his major financial interest, right? So you've got to ask yourself then, when somebody like Rishi Sunak is deciding things like, how should we set tax policy? How should we tax rich people? Do you think he speaks to his father-in-law? When David Cameron knows that when he leaves office, he's going to work for Greensill and get paid £10 million in one year, when he's making his decisions, do you think he speaks to the guys at Greensill who are going to pay him £10 million?

So in the case of doctors, dentists, universities, but also economists, also politicians, you are in a competition. The politicians can make a certain amount of money working for you, and they can make a certain amount of money working for the rich. And when the rich are super, super, super, super rich, and your average taxpayer is increasingly poor, it gets harder and harder and harder for you to compete with them. And I think this is the reason why we saw for, for a long periods of time, really high amounts of corruption in poor countries, because the local people of those countries can't afford to pay their politicians very much. Whereas extremely wealthy people in other countries can pay these politicians enormous amounts to basically give the resources of, of those countries to these wealthy people. And I think this thing which has been happening in, in poor countries for a long time, you know, if you speak to people from Sub-Saharan Africa, Latin America, a lot of places in Asia, that they've been seeing this kind of corruption for a long time. In the West, we've been relatively protected by that for a reasonable amount of time because we've had a wealthy taxpayer, and we haven't had these super wealthy foreign billionaires who can influence our politics. As inequality has increased, the taxpayer, ordinary families have become poorer, the super-rich have become richer, and you have basically found yourself in the same situation that Latin Americans and Africans have been in for a long period of time. You cannot compete anymore for ownership of your politicians with the super-rich. And I think this is this classic example of why inequality matters for you, because if you allow the super-rich to get even richer, and you allow the middle class to lose their assets, they will increasingly out-compete you for the things that you need. And that includes your politicians, and it includes your media as well. It includes your media as well.

Now, if we consider the media. If you work as a journalist, you need to be paid. Most people need to be paid. They've got to pay their rent, they've got to pay their bills. There's two ways you can be paid as a journalist, right? You can sell journalism, sell news to the people, or you can sell your services to the rich and say, "If you pay me, I will sell stories that promote the ideas that you want to promote." You know, if you are an American watching this channel, you'll be very aware of where that ends up. You end up with extremely biased media. Their job is not to tell you the truth. Their job is to sell a certain story for you because they get paid by very rich people who want you to believe certain things. So this is the effect of inequality. This is the effect on inequality. And this is this Musk thing makes it really, really clear how inequality affects you. If you allow the rich to get really, really rich, to get really, really powerful, they outbid you for control of your politicians, they outbid you for control of your media, and they outbid you for access to your resources. And then what you get is politicians who don't care about you, media who lies to you, and the inability to access resources, which includes things like food and housing. And where does that lead us? As soon as Donald Trump won the election, Tesla stock price doubled. Tesla stock price doubled. Why did Tesla stock price double when Donald Trump won the election? Because traders think that Donald Trump is going to use taxpayer money, your money, if you're an American, to give to Tesla and to give to Elon Musk. That, that is what inequality does. Inequality gives the rich the power to directly access your tax dollars. That is the end result. That is why you need to care about inequality. That is why you need to care about the distribution of wealth. That is why you need to care about the distribution of power.

Okay, so that's my first point done. Elon Musk makes it really clear that inequality affects you in a material way.

The second point I wanted to talk a little bit about is Elon Musk's support of far-right parties across the world. When I say far-right, what I mean is anti-immigration parties. I know some people don't like the term far-right. Why is Elon Musk supporting anti-immigration parties all around the world? And to me, this is, it's really, really obvious why it comes in and supports that. And I want to talk a little bit about it because I never hear this discussed really in the media. So on this channel, I talk a lot about, and I have been talking a lot about for a long time, the fact that the economy is going to keep getting worse, uh, living standards will keep falling, it will be difficult for you to get financial security, to get good quality housing, to get good quality jobs. And because inequality will keep rising, that will keep getting worse. Um, and I think when I first started saying that, you know, and I first started betting on this back in 2011, that was a really not popular opinion. There was a general sort of consideration that the economy was getting better and it would recover and it would get better. Now, as I say this in the beginning of 202, in the beginning of 2025, I think it's becoming increasingly obvious to people who are watching that that is what is happening. The economy is on a structural downtrend. Things are going to get worse and worse. And as that happens, it creates an obvious tension in politics, which is that people do not want to accept a situation where their family gets poorer every generation. People don't want their kids to be poorer than they are. People don't want their grandkids to live in poverty. And people demand change in politics. And I think whilst a lot of these kind of old-school politicians cling on to this hope that we can keep going the way we're going, it's becoming increasingly obvious to anybody kind of half-smart that people are going to increasingly demand some kind of change. What that means is we're kind of already in a situation now in our society where there has to be a discussion, and there is already a discussion about where do we go? How do we change things? And I think in the next 10 years, probably maybe sooner, you will see a significant change in the way our politics is run, what politicians offer, and what people demand. And that is because the status quo is increasingly obviously not working for most people.

So if you're somebody like Elon Musk, and you are the richest person in the entire world, you're going to look at a changing world, and you're going to look at people that are demanding different things. You're going to look at people who, people like me, who are demanding, uh, less inequality, higher taxation of the rich, lower taxation of ordinary workers. And there's an obvious reflex reaction for somebody like Elon Musk, where he says, "Well, I don't want to pay high taxes." So I want to avoid this outcome of higher taxes on the rich. So you need to sell a different story. And I think it's, it's already really clear what the big alternative stories are. Our story, which is getting bigger, the reason you're getting poorer is because of the super-rich. You need to tax the super-rich more. But there's one story which is much bigger than that, which is the reason you're poor is because of immigrants. The reason you're poor is because of foreigners. And if you are Elon Musk, you're looking out there in the world of, you know, new alternative economic ideas. Which of those ideas do you want to win? Um, now, I would like to make it clear, I think a sensible billionaire would probably realize it's economically destabilizing to keep inequality growing more and more. But most billionaires don't think like that. They just don't want to pay higher taxes. They, they want to keep getting richer. They're kind of obsessed with it. That's why they get rich. So what you're going to do? You are going to financially support the idea that immigrants are the problem. And I'm not, I think sometimes people think that I'm some sort of super pro-immigration guy. I'm not a super pro-immigration guy. I recognize that it is massively in the interest of the rich to tell you that the problem is immigrants, because if you don't think the problem is immigrants, you might work out that the reason you're getting poor is because of the super-rich, and they don't want you to know that. So this is the situation that Elon Musk is in. He is going to support that. And, and it's the truth is, and something that increasingly worries me, it's not just Elon Musk who's going to support that. You know, other super-rich people, people are going to support this idea because they realize that hatred of foreigners and hatred of immigrants is the main thing standing between them and high levels of taxation. And they don't want to pay more tax. Um, so they're going to fund it. They're going to fund these ideas. Um, and more and more money is going to flood into that. If inequality keeps increasing and keeps increasing and keeps increasing, living standards will get worse and worse and worse and worse. It will be extremely destabilizing. And it will destabilize an economy which already provides unbelievable levels of luxury to the rich and the super-rich. I don't think this is the right thing for billionaires to do. You know, there's this story, I don't know how true it is, that the reason that the French cut off the heads of the rich and the English didn't is because the English accepted the English super-rich accepted they need to give a bit back. And they gave a little bit back to ordinary people. They increased living standards of ordinary people. And apparently that's why we still have a royal family and the French royal family are all dead. Um, I think a sensible billionaire would accept that if they stop inequality from increasing, we can stabilize this for, uh, living standards, uh, and they can protect their own situation. But the fact is, most super-rich don't think like that. They very simplistically want to keep their taxes down.

I wanted to talk a little bit about where that puts these guys, people like Musk, who are funding and increasingly funding anti-immigrant political parties, anti-immigrant ideas. Because what is interesting is it is in their interests for people to hate foreigners and for people to hate migrants and for people to think that migration is the key problem. But it is interestingly also in their interests to keep migration high. Because what these guys primarily need is for you to hate migrants and for you to think migration is the problem. And the best way for them to achieve that is to have loads of stuff in the media saying migrants are the problem. And also to have really high levels of immigration. Because if immigration is really low, first of all, it would rapidly become clear that that didn't stop the economy from getting worse. But secondly, it's a lot easier to get people to take migrants when there's loads of migrants coming all the time. And that is why you see Trump in this really interesting situation where he's simultaneously funding anti-migrant parties and arguing that we need to have high levels of immigration in the US. Um, and it really, really reminds me of what the Conservatives did. The Conservatives. And I think this is the smartest thing they did, and I'm surprised in a way that they've got people smart enough to do this. The Conservatives really, really fought hard to have a specific kind of migrant kicked out of the country, which was illegal migrants coming over in small boats. At the same time, the Conservatives did Brexit. Before Brexit, the UK has to accept EU migrants. There's a degree to which the UK doesn't control the level of immigration of legal immigration. After Brexit, the UK can choose how much legal immigration it has. Um, so the Conservative party basically had complete power over the vast majority of migration. Illegal migration is only, I think, 2 or 3% of overall immigration. 97, 98% is legal migration, which they could have reduced. But they didn't. They did this really interesting thing of really aggressively trying to stop this really small kind of immigration that they couldn't actually stop, and massively increasing the number of visas which they gave legally to non-EU immigrants. It was like super, super smart. They managed to simultaneously portray themselves as the party of low migration, whilst massively increasing non-EU migration to the country. And I think this kind of shows you, in a way, what the correct tactical play is from the billionaires. Tell you to hate migrants, and make sure there's tons of immigration, because that makes you hate people. That makes you hate immigrants. And I think that the final thing that we learn from Elon Musk is basically how important it is for billionaires that you guys hate each other.

So what I try to do on this channel is to make it clear to you that the reason you are getting poorer is because inequality is rapidly increasing. If you don't stop inequality rapidly increasing, you will keep getting poorer. The only way you can really protect yourselves is by working together as a mass of not super-rich people. Um, and using that political power. That only works if you guys don't hate each other. Um, and every week I put these videos out, and I get people in the comments saying, "That's never going to work. People are never going to work together. Tell me how I can protect myself. Tell me what I can do. Give me trading tips. Tell me how I can protect myself." Rising inequality, rising top 1% inequality means more and more and more of you lose every year. Um, there's no way to change that other than stopping inequality from rising. And I think what people like Elon Musk want is for you guys all to be living in this Squid Game where you all think, "I don't care if only one of us will win and 99% of us will lose. I want to fight the people around me to be that 1%." You need to change the game. You need to change the game. You cannot play a game where every single year 95% of you lose, 96% of you lose, 97% of you lose, and you keep hoping to be in that 1%. You need to change the rules of the game. And that means working together.

So to conclude, Elon Musk is a great example of why inequality is a danger for you and your family. These guys are going to take the things that you need. They're going to take your politicians, your economists, your media, and ultimately your housing and your food. That is what it means. You need to fight inequality. The only way to do that is to work together. That's why these billionaires want you to hate each other. If you hate each other, they'll win. If you work together, you can win. Support the channel. Tax the rich. Cut tax for ordinary working people. Send this to your friend. Send this to your mom. Thanks for your help. Good luck.