Brand Suicide

Feb 10, 2025

In recent weeks, we’ve extensively covered the mayhem engineered by Donald Trump as he has taken control of the Oval Office for the second time. Every day brings another action or announcement meant to produce shock and awe to the world as he continues to show a desire to follow through with campaign promises many of his own voters probably thought they’d never see.

One thing I believe has surprised all of us is the exalted position to which Elon Musk has ascended just recently. Musk’s full-throated support for Trump, along with the enormous financial backing he provided during the presidential campaign put the world on notice that he would have unprecedented influence in the next administration, but it’s unlikely anyone imagined the power he would acquire heading up the Department of Government Efficiency (DOGE).

Using the Heritage Foundations Project 2025 as a roadmap, the Trump Administration is looking to take a chainsaw to the Federal Budget over the next few years. Right-wing conservatives and libertarians have dreamed of this “opportunity” for decades. Reagan’s supply-side revolution of the 1980s isn’t even close to what they want to accomplish. One of the great mysteries of the MAGA movement is determining at what time the proponents believe “America was great”. Nostalgia is a rather murky emotion, making this question almost rhetorical, but if Project 2025 is any indication, then pre-WWII era U.S. seems to be the goal. Gutting of Civil Rights legislation and just about every social welfare safety net is on the menu.

However, a major catch for MAGA is that even a lot of Trump voters did not sign on for such an agenda. Trump repeatedly tried to distance himself from Project 2025, but so far, the Heritage Foundation seems to be getting most of its wish list.

Is Musk is flying too close to the sun?

Elon Musk's bizarre actions and behavior in recent years have raised concerns about his access to sensitive government information as the leader of the DOGE task force. Hiring twenty-something computer engineers with no prior experience in such matters to handle data with implications for national security is accelerating these worries. Donald Trump has given Musk carte blanche to find ways to slash government spending, but few would have expected activity like the last few weeks

Over the last decade, Elon Musk has carved out a legacy as one of the world’s most preeminent entrepreneurs and technological innovators. His high-profile actions celebrating a zest for technological advancement have earned him the adulation of tech fans worldwide. While Musk’s visionary leadership was instrumental in propelling Tesla to the forefront of the electric vehicle market, his social media outbursts, erratic business decisions, and increasingly unhinged antics are starting to have a detrimental effect on the Tesla brand.

Chart 1 below shows Tesla’s stock price over the last year. The vertical line denotes the date of the presidential election (Nov. 4), which not coincidentally, set off a massive upward move in the stock price that saw a doubling in little over a month. Having topped out back in December, these gains have been paired substantially, but the stock still looks vulnerable.

There’s no mystery why the stock shot higher – investors are assuming Elon Musk will use his exalted position with DOGE to rig the game for himself and Tesla. In these regards, markets are soulless. Illegal, unconstitutional, blatantly unethical? None of it matters. There’s money to be made, so people just jump in, regardless of what the fundamentals may be.

Chart 1. Tesla Stock Price

Musk’s public persona has started to overshadow the company’s once-stellar reputation. Tesla's brand, once synonymous with innovation and sustainability, now faces questions about its identity and future under Musk’s leadership, with critics arguing that his actions are putting the company’s credibility and consumer trust at risk.

Burning Bridges Right and Left

Elon Musk has always been somewhat off-kilter. A few years back, he publicly acknowledged that he suffered from Autism Spectrum Disorder (ASD), which accounts for the oddball personality and awkward social skills he exhibits. As a parent of a child with ASD, I have sympathy for the teasing Musk says he endured growing up. He has also detailed that his father was psychologically abusive, with a particularly sad memory of his father berating him after a bully put him in the hospital. If true, this is a horrific event that definitely scarred young Elon.

I may be accused of practicing pop psychiatry, but it seems apparent of his actions are indicative of a person with profound psychological issues. Musk and Trump appear to have this in common – a need for constant attention, and to be loved by everyone. Even if they must be forced into it. Trump is famous for saying there’s no such thing as bad publicity, but both he and Musk are pushing that theory to the limit.

Nazis Are Not Cool

Even before Elon Musk did a “Nazi salute” at the inauguration of Donald Trump, he had already drawn criticism for promoting conspiracy theories of all types. Election 2020 denialism, conspiracies about FEMA during Hurricanes Helene and Milton, anti-immigration misinformation, or whatever the MAGA nonsense du jour happens to be. “Musk has helped spread accusations that the Federal Emergency Management Agency “actively blocked” donations to victims of Helene and was “seizing goods … and locking them away to state they are their own” — allegations that FEMA officials call false, and which run contrary to state and local Republican leaders’ praise for the assistance from Washington.

On his social network, X, Musk also amplified rumors that authorities in North Carolina had “taken control to stop people helping” stricken residents and accusations that sheriffs were threatening to arrest FEMA staff “if they hinder rescue and aid work.” Many of his allegations centered on the claim that immigrants had already depleted federal disaster funds, which FEMA has said is untrue.

“FEMA used up its budget ferrying illegals into the country instead of saving American lives. Treason,” Musk wrote without evidence on X, where he interspersed messages about hurricane damage with political attacks on Democrats.”
Mashable - https://mashable.com/article/elon-musk-x-declining-user-base-2025

Since purchasing social platform Twitter in 2022, and rebranding it as “X”, the network has been losing subscribers at a rapid pace. Twitter already had a reputation for spreading misinformation before Musk bought it, but afterward Musk started actively promoting and amplifying right-wing conspiracy theories, which many users have found off-putting. The newly fashioned X has quickly developed a reputation as a misinformation cesspool, dominated by right-wing trolls and conspiracy mongers. Not only has Elon Musk tolerated this behavior, but he has championed it. If stands to be seen if X’s present form will be a viable business model.

Supporters of Musk have tried to downplay his sharp turn toward the extreme right, but it’s difficult to spin giving a Nazi salute and then days later speaking in front of an extreme right-wing political party (AfD) in Germany. The Nazi gesture was likely just Elon being a troll, seeing if he can cause a stir - but speaking to the AfD about how Germany needed to “let go of Nazi guilt” carries a much more serious tone. Germany is hypervigilant, and extremely proactive in combatting extreme right political groups within the country.

Their history of starting two World Wars has left them wary of the ideologies that provided that spark. Having a mega-billionaire foreigner interfere in the country’s politics to provide solace to Nazism’s intellectual ancestors is bound to create friction. German Chancelor Olaf Scholz addressed how unwelcome Musk is sticking his nose in the upcoming German election:

“I’m so angry about Elon Musk intervening for the far right and Elon Musk also not acting adequate to this killing of so many Jews and other people in Europe done by Germans in the past,” said Scholz, speaking in English to journalists on the sidelines of a campaign event in Berlin. “This is the historic responsibility we will continue to take in the future as well.”
Politico - Jasper Bennink, Chris Lunday and Joe Stanley-Smith

Fox in the Henhouse

Imagine if the right-wing’s top bogeyman George Soros had been given the position Elon Musk now holds. If you’ve had the good fortune to miss out on the endless conspiracy theories involving Soros, then I envy you. For the rest of us, we know MAGA would go nuclear if Soros was doing the things Elon Musk is with DOGE. Actions such as calling on the Treasury Department and somehow gaining access to the government payment systems would be considered treasonous in MAGA world. That is unless it’s being done by Trump, or one of his appointed acolytes.

Musk doesn’t draw the universal ire on the left that Soros does on the right, but he’s rapidly starting to close the gap. When you remove political beliefs from the equation, there is no argument for giving an unelected private businessman without any government experience access to some of the most sensitive government data available. Particularly when he is the wealthiest person in the world and could wield power in favor of himself and his company without the slightest bit of oversight. Such a viewpoint should be bipartisan, as most would agree that this is as big of a conflict of interest as you will ever see, which is why there has been a massive backlash.

If all of this were not enough, new gasoline is constantly being splashed on the fire. Giving access to extremely sensitive data to computer engineers who are not old enough to rent a car has set off alarm bells. However, age and experience are just the tip of the iceberg. Musk seems to have put together a colorful group of young guys one might expect to see in a digital heist movie. One of DOGE’s workers goes by the name “Big Balls”, and another was recently let go because he was found making overtly racist comments online. But don’t worry about him, Vice President J.D Vance expressed support, and Musk wants to bring him back. Apparently, social network comments such as below are just free speech, and not an indication of poor character anymore:

“Just for the record, I was racist before it was cool” and, “You could not pay me to marry outside of my ethnicity.” “Normalize Indian hate,”
The Hill - from comments on social platforms by Marko Elez

At least, that’s the new world we live in. There are no more racist “dog whistles” – just racist bullhorns.

“Big Balls” (left) – Elon Musk (right)

Musk has claimed that his “Nazi Salute” was just a random gesture he made while being overcome with emotion. Maybe! But when he’s entirely willing to ignore comments such as above from an employee after they have already become public, it certainly doesn’t help make his case. As they say - if it walks like a duck and quacks like a duck…

Oligarchy and Plutocracy

Oligarchy is a form of government where a very small group of people hold most of the power. After President Joe Biden left office, he released a farewell video, where he warned Americans about an emerging oligarchy in the U.S. Some highlights:

“He also took a swipe at social media companies such as Meta, which has recently announced it will get rid of independent fact checkers. "Social media is giving up on fact checking. The truth is smothered by lies told for power and for profit," Biden said.
And his attack on an ultra-wealthy "tech-industrial complex" was a veiled reference at Silicon Valley executives such as Elon Musk, the world's richest man who is close to Trump and provided huge financial backing to his campaign.
His language echoed that of President Dwight Eisenhower who famously warned of a "military industrial complex" in his 1961 farewell address.
Biden appeared to have Musk in mind when he warned of a "dangerous concentration of power in the hands of a few ultra-wealthy people".
The term oligarchy refers to a government that is run by a handful of people, often for their own gain.”
Alys Davies BBC News, Washington

Technically, the term plutocracy is more accurate. A plutocracy is an oligarchy where the government power is derived specifically from money and wealth. It’s not at all a stretch of the imagination to say that Elon Musk purchased his position heading up DOGE by giving hundreds of millions of dollars to the Trump campaign. Yet, we shouldn’t pretend this sort of thing is new. Politicians have been rewarding wealthy donors as long as there have been elections. However, the reward is never quite so valuable as what we are seeing now. Even if Elon Musk has no power to end programs, allowing an unelected billionaire full access to government agencies when he does a great deal of business with the federal government should be a nonstarter.

“With so much latitude to advise on spending, regulations and government contracting, Musk has significant opportunities to advance his own personal business interests.
The scope of what Elon Musk stands to gain from directing agency reconstruction cannot be fully stated. Musk and the federal government are already deeply intertwined: His companies Tesla and SpaceX account for at least $15.4 billion in government contracts over the past decade and span multiple agencies.
Any power to influence which agencies must cut costs or how government contracts are doled out opens the door for Musk to enhance his personal fortune.
Some of the decisions Musk has already announced in his short tenure clearly interact with his business interests; his plan to put the U.S. Treasury on a blockchain could potentially involve his own cryptocurrency technologies.
One of the most concerning facts of Musk’s involvement is that DOGE’s authority and access to information in the federal government remains mostly undefined.
Musk could potentially have access to information that could influence his business decision making, such as access to the federal payment system, which contains details of public contractors who compete directly with Musk’s own businesses.
When Americans elect a president, they expect them to faithfully choose allies with the experience and conduct necessary to run a successful administration that serves the people.
It is concerning that Trump seems to be selecting his top officials based on their loyalty to his movement over specific qualifications. That concern increases when you realize that his pool of potential allies contains ultra-wealthy businessmen who could regulate the very businesses they head.
CLC - Sophia Gonsalves-Brown and Maha Quadri February 4, 2025 Website

No wonder Tesla Stock rocketed higher.

A Darkness Has Descended

I’ve gone to great lengths over the last few months to highlight the dangerous goings on in the political arena. No one should have been surprised … if they were previously paying attention. However, Americans lead busy lives and typically want to tune out the noise of politics. The level of misinformation that’s been bandied about since the internet reached full adoption level is staggering. Dreams of the internet “democratizing” information have been vaporized. Weaponization of misinformation and disinformation is now shaping the world, rather than the proliferation of valid facts and reasoned thinking. Not many people would have predicted such an outcome. Propaganda may be the most dangerous force in the world in our time.

I’ve spoken much about the way MAGA has used threats of violence to coerce individuals into actions that further their agenda. This insight below from Senator Mitt Romney ought to scare the hell out of any American who truly believes in democracy, and the American way of government.

“One Republican congressman confided to Romney that he wanted to vote for Trump’s second impeachment, but chose not to out of fear for his family’s safety. The congressman reasoned that Trump would be impeached by House Democrats with or without him — why put his wife and children at risk if it wouldn’t change the outcome? Later, during the Senate trial, Romney heard the same calculation while talking with a small group of Republican colleagues. When one senator, a member of leadership, said he was leaning toward voting to convict, the others urged him to reconsider. You can’t do that, Romney recalled someone saying. Think of your personal safety, said another. Think of your children. The senator eventually decided they were right.
Romney was dismayed by the perspective, though he understood it at a personal level: In the wake of the insurrectionist attack on the Capitol, the book excerpt added, the senator shelled out $5,000 a day “to cover private security for his family.”
It’s not clear exactly how long that level of security continued — it might still be in place now — but for context, it’s worth noting that $5,000 a day is roughly $1.8 million a year.
If Romney’s version of behind-closed-door events is accurate, it’s an extraordinary peek into a deep pathology. In a healthy society with a stable political system, elected officials don’t cast votes out of fear that their families might be killed.”
Steve Benen – MSNBC

The sort of people who send out death threats to secure a political objective aren’t the type of people to rest on their laurels. What Mitt Romney spoke of occurred a few weeks after the Jan 6 attack. That was over four years ago, and the situation is only getting worse. DOGE employees are now getting death threats. It was only a matter of time before we came full circle. Threats of political violence are now flowing both ways, and just like with Jan 6 rioters, those on the left may start to commit real violence.

An example of a sad and sickening aspect of this phenomenon is a U.S. Prosecutor appointed by Trump that has vowed to prosecute anyone who threatens DOGE staffers. Well – that’s not what’s sickening. Sending death threats to DOGE employees is as abhorrent is MAGA’s threats. However, this particular attorney, Ed Martin, was ACTUALLY AT THE JAN 6 RIOT!!! He later described it as a “day marked with faith and joy”, and he’s spent the last four years defending Jan 6 rioters. This is the man Donald Trump has put in charge of the U.S. Attorney’s office in Washington D.C. As a reminder, Trump did this after pardoning around 1500 Jan 6 rioters, some of whom were caught beating police on tape.

What I see now is the darkest possible timeline unfolding. As a symptom illustrating the bigger picture, a mural in a Texas border town (Brownsville) was recently defaced to say, “Deny, Defend, Depose”. These words struck me as rather cryptic - that is, until I learned the reference. This is what was etched in the bullet Luigi Mangione allegedly used to murder UnitedHealth Care CEO Brian Thompson. There’s no way to know if this was done by an immigrant, or an American citizen living in Brownsville, but it would seem you are now combining two different motivations for violence on the left. A backlash from the relentless demonization of Mexican immigrants, and an "eat the rich" mentality that prevailed during the French Revolution and is now commonly used as a rallying cry against wealthy classes. If things continue the way they are going, I expect to see left-wing militias popping up. For years, it’s been militias on the right that were the main domestic violence threat, but recent events may be a catalyst for change.

Gaining the World

I’m not a religious man, but the above quote popped in my head as I was writing. These are purportedly Jesus Christ’s words and serve as a warning of the dangers of greed for an individual’s spiritual health. Typically, it’s material greed that comes to mind, but lust for power and fame may be more dangerous to the world as a whole. History is riddled with narcissists, megalomaniacs, psychopaths, and charlatans who wreaked havoc on the world. Endless war with people dying for little reason other than a powerful leader’s ego. So, rather than just a warning for all individuals, it should serve as a lesson for all countries and societies as well.

Are there “souls” to be lost among countries or institutions? Maybe not, but what they do have is collective culture. Shared experiences (history), beliefs, music, food, holidays, sometimes religion, and most importantly – values. Certainly, there can be a ton of diversity, but when it comes to people’s opinions, there’s usually some convergence around a common image. For all intents and purposes, this image can be considered a brand. For the last 80 years, the U.S.A. has been the premier brand among countries in the world. We have shared our values with the world, and for the most part, the world has been on our side. In the history of the world, no name of anyone or anything has garnered as much respect and goodwill as the United States of America. However, after 80 years of building the ultimate brand, it is being lit on fire.

Simultaneously, Elon Musk is torching both his personal brand and that of Tesla. Through the years, part of the Musk mystique has been how doesn’t see to spend much money on himself. That is, he has seemed more concerned with scientific breakthroughs and advancing technology than in making money. Yet, I think it would be a mistake to confuse his purported spartan approach to life with egalitarian principles. Money may not have fueled his ambition, but it’s no doubt that power and prestige played a part. As I stated before, lust for power is more dangerous than simple greed, because in some people it can never be satiated.

Musk’s rapid ascension in the Trump administration, and his high-profile foray into European politics looks like it may be affecting Tesla’s sales already. Tesla’s sales in Europe cratered in January. There are some product cycle issues that could be exacerbating the drop, but I expect this will be a continuing trend. California sales are down big as well. Consumers in the hunt for an EV are not the type of people who overlook associations with fascists.

Besides Electric Vehicles (EVs), Tesla has several other product lines, such as self-driving cars and advanced robotics powered by AI that Musk believes are poised to make great strides. Present bullish views on the stock are based on great expectations for growth in the next few years. Much of this is speculative at this point, but it’s not hard to justify the optimism. The more immediate question is, if these projections play out, have they already been priced into the stock? My view would be yes – the stock is considerably off its recent high near $400, having doubled after the 2024 election.

Yet at $361 it is still close to 50% higher than where it was Nov. 4 of last year. Its forward P/E is around 124X, so Tesla’s valuation leaves no room for error. Certainly, there’s a ton of growth expectations built in, and its recent technological advancements may be extraordinary, but there’s a downside that’s more uncertain, and has not been priced. Musk has always been the face of Tesla, which in the past was likely a net positive. I think recently though, it has become a serious downside. Hatred for Elon Musk in the last few days has gone supernova. I can’t recall public opinion ever tanking for anyone so quickly. There have already been calls for boycotts in European countries among activists and foreign ministers.

Musk has always thumbed his nose at the establishment, seemingly believing he is some sort of rebel. In all likelihood, Musk thinks he will eventually be celebrated as a hero for slicing government expenditures, bringing the deficit under control, and drastically improving economic growth. Unfortunately for him, the public increasingly sees him as a danger and a menace to democracy. For that, a price remains to be paid. I personally would stand clear until Tesla has started pricing in some less positive outcomes. To me, that means at least a 30-40% pullback from present levels.

The Devil's Advocate

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