World’s richest man praises recession as ‘good thing’ — Analysis

Elon Musk, the world’s richest man, has tweeted in praise of the recession facing the US in response to a follower’s question, suggesting it’s actually a “good thing” because “Too long, it’s been making fools of themselves..” He blamed “Stay-at home stuff from Covid-19” for “Tricking” people into thinking they could make money without having to “work hard,” suggesting many people were in for a “rude awakening.”

Doubling down on his praise of incipient economic doom, Musk elaborated on his philosophy in response to another follower’s tweet, calling for “Businesses that generate negative cash flow inherently (i.e. value destroyers)” to “They must die in order to stop consuming resources.” 

It’s not clear what companies Musk was referring to. Musk’s massive market capitalization at Tesla was made largely with government green energy subsidies. 

Although it is now profitable, the company was not founded that way. Twitter, too – which Musk agreed to purchase for $44 billion earlier this month – has returned a loss every year of its operation except 2018 and 2019.

Musk seems to be aware of Twitter’s profitability problems, having paused the deal to acquire the social media platform until the percentage of bots and spam accounts is brought under 5%. With just 217 million “monetizable” users who are shown ads on the platform, Twitter is no match for Facebook, monetarily speaking – Mark Zuckerberg’s social network boasts a whopping 1.93 billion subscribers, though its own revenues have been dwindling as well. Musk did not give any indications of his future plans, however.

Twitter investors sue Elon Musk

The SpaceX CEO predicted in his tweet about value-destroying companies that the economic downturn would last “About 12 to 18 Months” after announcing in a live-streamed appearance at the All-In Summit in Miami Beach that the US economy was “probably” in a recession.

Since the Covid-19 pandemic, the US has fallen into recession. Federal and state governments have imposed economic shut downs on almost all sectors of the economy. Then they print trillions to cover the deficits created by these policies.

Massive unemployment programs and loans for distressed businesses also contributed to the economic black hole that swallowed up the economic gains made during the early years of the Trump administration, with many working-age Americans opting to stay at home rather than return to jobs they found demeaning or insufficiently remunerative, while the spike in commodity prices triggered by the US’ response to Russia’s offensive in Ukraine served as the cherry on top of the depression sundae.

With inflation reaching near-record highs – at 8.3%, it’s more than four times the Federal Reserve’s desired rate of 2% – the US is floundering in economically uncharted territory. The Fed raised interest rates numerous times, and it agreed to raise them again in its policy meeting earlier this week. Additional increases were also predicted for June and July.

This story can be shared on social media



Related Articles

Back to top button