A New Crony In The Trump Administration’s Midst?

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Andrew F. Quinlan President, Center for Freedom and Prosperity
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Candidate Donald Trump promised he would “drain the swamp” if elected. Now that’s he’s officially president-elect, Trump should be careful he doesn’t surround himself with self-interested cronies.

For instance, Elon Musk’s inclusion as a member of the President’s Strategic and Policy Forum suggests he may be flirting with danger.

The choice to include Musk was somewhat surprising given how his views conflict with the President-elect on key issues like green energy and climate change, as well as his outspoken support for Hillary Clinton during the campaign. He even went so far as to say, “[Donald Trump] doesn’t seem to have the sort of character that reflects well on the United States.” Whether or not that’s true, it’s reasonable to question why Musk is willing to cozy up to Trump now.

Yet it is Musk’s tendency to build his corporations on the backs of taxpayers that provides the most cause for alarm.

Musk’s three primary ventures—Tesla, SolarCity, and SpaceX—have received an estimated $5 billion in subsidies according to the Los Angeles Times. They also benefit extensively from government contracts, yet still manage to mostly lose money. As a green energy company under Obama, SolarCity has benefited the most from government largesse, but it still had to be bailed out through a suspect merger with Tesla. But not before the company, and Musk, were caught up in a corruption probe of New York Governor Andrew Cuomo after state taxpayers were put on the hook for an expensive new SolarCity factory.

These days Musk’s attention is mostly directed toward space. He made a big presentation about his desire to colonize Mars, and the most obvious question raised was whether he intended to do so at taxpayer expense.

Troubling signs on that front are already starting to emerge. Not only has Musk secured a ticket on Trump’s advisory panel, but his good friend Peter Thiel, himself an early SpaceX investor, has used his connection with Trump—he was an early and prominent supporter and one of the only such from Silicon Valley—to influence the transition’s landing team at NASA. According to The Wall Street Journal, Thiel “argued forcefully” for voices that favor so-called “public-private partnerships,” which is often a euphemism for cronyism.

For all the talk of pursuing private space travel, NASA remains the single largest customer of SpaceX. Over the past eight years it has awarded more than $6.5 billion in contracts to Musk’s company. And now he might have an inside track toward securing more taxpayer dollars going forward despite several high profile explosions that have resulted in hudreds of millions in lost payloads.

Dealing with Musk is not without political risk

On creation of the advisory panel, Trump said, “My administration is going to work together with the private sector to improve the business climate and make it attractive for firms to create new jobs across the United States from Silicon Valley to the heartland.” But he needs to tread carefully, lest his effort to improve the overall business climate is hijacked to serve certain businesses more than others.