Elon Musk predicts US recession is ‘inevitable’, and likely to happen in ‘the near term’

Elon Musk spoke at the Qatar Economic Forum with Bloomberg editor John Micklethwait. Video / Bloomberg Markets and Finance

Billionaire Elon Musk predicted that an “inevitable” recession in the United States is likely to occur “in the short term” and detailed all the consequences it would have for the rest of the world.

Musk, the CEO of Tesla and SpaceX, spoke at the Qatar Economic Forum overnight. He was interviewed by John Micklethwait, the editor of Bloomberg.

Micklethwait asked him about repeated comments by US President Joe Biden and his top administration officials in recent days denying that a recession was inevitable.

“Well, a recession is inevitable at some point,” Musk said.

“As to whether there’s a near-term recession, I think it’s more likely than not. It’s not a certainty. But it seems more likely than not.”

Speaking to The Associated Press last week, Biden sounded more optimistic, taking a defiant tone when asked if a battle against rising inflation would tip his country into recession.

“It’s not inevitable,” he insisted. His remark was later echoed by other officials.

“I don’t think the recession is inevitable at all,” Treasury Secretary Janet Yellen told ABC This Week over the weekend.

“Clearly inflation is at an unacceptable level. It’s President Biden’s top priority to bring it down. And (Federal Reserve Chairman) Jerome Powell has said his goal is to bring inflation down. inflation while maintaining a strong labor market.

“It’s going to take skill and luck, but I believe it’s possible. I don’t think a recession is inevitable.”

US President Joe Biden.  Photo/PA
US President Joe Biden. Photo/PA

Brian Deese, director of the National Economic Council, also supported the American president.

“Not only is the recession not inevitable, but I think a lot of people underestimate those strengths and the resilience of the American economy,” he told Fox News on Sunday.

Musk’s assessment of the situation was just a small moment in a high-profile interview with Micklethwait. He was also asked about his stalled deal to buy Twitter, his vision for the future of the social media platform, layoffs at Tesla, his support and defense of cryptocurrency, and of course his political views. .

“There is a limit to what I can say publicly, given that this is a somewhat sensitive topic. So I will have to be measured in my responses here, so as not to generate further lawsuits,” Musk said of the Twitter deal.

“There are still unresolved issues. You’ve probably read the question whether the number of fake and spam users on the system is less than 5%, as claimed by Twitter. Which I think, n This probably isn’t the case with most people’s experience when using Twitter, so we’re still waiting for a resolution on that.

“Then, of course, there is the question of whether the debt party will meet and then the shareholders will vote in favor. So those are the three things that must be resolved before the transaction can be finalized.

Micklethwait asked him if there was “any limit at all” to who he thought should be allowed on the platform.

“My aspiration for Twitter or, in general, for the digital public square, would be for it to be as inclusive – in the broad sense of the word – as possible. (And) for it to be an attractive system to use,” Musk said. .

“So ideally I’d like 80% of what’s in North America, and maybe half the world, ultimately, to be on Twitter in some form or another. And that means it has to be appealing to people. It can’t be a place where they feel uncomfortable or harassed, or they just won’t use it.

“I think there’s a big difference between freedom of speech and freedom to reach, in that in the United States you can obviously go to the middle of the town square and shout little by little. You’re going to annoy people around you, but you’re kind of allowed to shout whatever you want in a crowded public space, more or less.

“But not everything you say, no matter how controversial, needs to be broadcast nationwide. So I think Twitter’s approach should be to let people say whatever they want in the limits of the law, but then to limit who sees this based on the preferences of any Twitter user.

Elon Musk thinks a US recession is more likely than not in the near term.  Photo/PA
Elon Musk thinks a US recession is more likely than not in the near term. Photo/PA

“So if your preference is to see or read anything, you’ll get it. But if your preference is that you’d rather not see comments that you find offensive in some form or another, then you can get it. have as a parameter and not see it.

“But somehow, we need to do the things that make most people want to be on Twitter and enjoy it and find it informative, entertaining, funny and helpful.”

When asked if he wanted to become CEO of Twitter and would continue to hold that position at Tesla and SpaceX, Musk said his exact title wasn’t particularly important.

“I would drive the product. That’s what I do at SpaceX and Tesla,” he explained.

“Whether I’m called CEO or whatever is far less important than my ability to steer the product in the right direction.”

The next topic was Tesla’s plan to lay off 10% of its salaried workforce. It’s been a source of confusion since it was first reported earlier this month, and on Sunday two former Tesla employees filed a lawsuit alleging the company violated US laws regarding “mass layoffs.” “.

“Initially, you said that 10% (of jobs) would be eliminated, then 10% of employees would be eliminated, then employees would remain stable and the overall workforce would increase. What number is it ? Micklethwait asked.

“Tesla is reducing its salaried workforce by about 10% over the next three months or so,” Musk said.

“We expect to grow our hourly headcount. But we’ve grown very fast on the salaried side, and we’ve grown a little too fast in some areas. So that requires a reduction in the salaried headcount.

“We are about two-thirds hourly and one-third salaried. So I guess technically a 10% reduction in the salaried workforce is only a 3-3.5% reduction in the workforce. total.”

He also dismissed that aforementioned lawsuit, calling it “trivial.”

“Let’s not read too much into a preventive trial that has no value; it’s a small trial of minor consequence,” he said.

“Anything Tesla makes headlines, whether it’s a bicycle accident or something much more serious. It seems like anything Tesla gets a lot of clicks, no matter how insignificant or material. I would rate the lawsuit you refer to in the trivial category.”

Musk recently doubled down on his support for the dogecoin cryptocurrency, which has lost around 90% of its value in the past 13 months.

He and his companies are currently facing a US$258 billion class action lawsuit alleging they were complicit in a “dogecoin crypto pyramid scheme.”

“Since Musk and his companies began buying, developing, promoting, supporting and mining dogecoins in 2019, plaintiff and the class have lost approximately US$86 billion to this crypto-pyramid scheme,” the lawsuit alleges.

Musk told Micklethwait that he “never said people should invest in crypto.”

“In the case of Tesla, SpaceX, myself – we all bought bitcoin. But it’s a small percentage of our total cash. So not that important.

“I also bought dogecoin, and Tesla accepts dogecoin for certain goods, and SpaceX will do the same. And I intend to continue supporting dogecoin, because I just know a lot of people who aren’t so rich who encouraged me to buy and support dogecoin, so I respond to these people.

“Just people, when I walk around the factory of SpaceX or Tesla, they ask me to support dogecoin, so I do.”

Finally, Musk was asked who he would end up rooting for in the 2024 US presidential election.

He previously expressed an openness to supporting Florida Governor Ron DeSantis, a Republican. Micklethwait asked if that was still true and if he would consider supporting Donald Trump if he ran again.

“I was just asked if I had decided who I would support in the next presidential race. And I said I hadn’t decided who I would support. Then I was asked: ‘Towards who could you lean on?’ I said maybe DeSantis,” Musk replied.

Pressed for his opinion on Trump, he simply said, “I think I’m undecided at this point in this election.”

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