Speaker 1: Well, Elon muskis now the richest person on the planet.
Speaker 2: More than half the satellites in space are owned and
Speaker 2: controlled by one man.
Speaker 1: Well, he's a legitimate, super genius, legitimate.
Speaker 2: He says.
Speaker 3: He's always voted for Democrats, but this year it will
Speaker 3: be different. He'll vote Republican.
Speaker 2: There is a reason the US government is so reliant
Speaker 2: on him. Alon Musk is a scam artist and he's
Speaker 2: done nothing of him.
Speaker 4: Anything he does, he's fascinating people.
Speaker 5: Welcome to Elon Ink, Bloomberg's weekly podcast about Elon Musk.
Speaker 5: I'm Max Chafkin, and we are recording this at five
Speaker 5: pm Eastern Time on a Saturday here on the East
Speaker 5: Coast because we got breaking news. The New York Times
Speaker 5: reported that Musk and Doge have successfully gotten inside the
Speaker 5: Treasury Department's payment system. These are the computers that control
Speaker 5: the disbursement of much of the federal government's money. This
Speaker 5: is something a top Treasury official was reportedly trying to
Speaker 5: stop just before he exited the administration.
Speaker 1: And to talk through this and.
Speaker 5: The rest of the Musk bake breaking news, I'm joined
Speaker 5: by Sarah Fryar, Bloomberg's Big Tech boss. Hey, Sarah Hi,
Speaker 5: And we've got Dana Hall, Elon Musk reporter, Hey, Dana, Hey, Hey,
Speaker 5: And Kurt Wagner Bloomberg social media reporter and also the
Speaker 5: guy who wrote the book on Twitter. Oh that's terrible, Kurt.
Speaker 2: I'm sorry.
Speaker 4: That's a great shout out. I'll take it. Hey, Max,
Speaker 4: Happy Saturday.
Speaker 1: How's it going?
Speaker 5: So guys, just to let's just start by like setting
Speaker 5: the table. Dana, you want to try to take us
Speaker 5: through what happened here.
Speaker 3: I mean, it's a really fast moving story. But basically,
Speaker 3: it sounds like the Treasury Secretary has given Elon Musk
Speaker 3: and his Doge counterparts like access to the Treasury payment system.
Speaker 3: And Senator Ron Wyden wrote a letter about this that
Speaker 3: was published late last night, and it sounds like it's
Speaker 3: just an unprecedented amount of access that Musk and his
Speaker 3: comrades have to the way that the federal government actually
Speaker 3: pays its bills and disperses payments.
Speaker 5: And Sarah, this is coming in amid a kind of
Speaker 5: week of chaos, right, it's.
Speaker 6: Very hard to pay attention to what's happening given everything
Speaker 6: else that surrounds it. We've got the tariffs, we've got
Speaker 6: the plane crash. There's so many critical things that are
Speaker 6: taking up the headlines right now, but this is coming
Speaker 6: in the midst of a lot of uncertainty, a lot
Speaker 6: of silence on the behalf of these agencies as their
Speaker 6: workers get these emails telling them, you know you can,
Speaker 6: you can take a government buy out and lose your job.
Speaker 6: As data is coming down from websites like the CDC
Speaker 6: and the Census, as a lot of agencies and others
Speaker 6: who do business with the government are being told to
Speaker 6: cut all their DEI spending and resources in order to
Speaker 6: receive money from the government.
Speaker 5: And it goes beyond that because like federal workers, I mean,
Speaker 5: if you're talking to federal workers right now, there a
Speaker 5: lot of them are just like confused. You have these
Speaker 5: kind of weird offers and the suggestion that maybe they'll
Speaker 5: they'll be resigned or laid off. There's like tons of
Speaker 5: fear in the federal workforce. You also have these kind
Speaker 5: of reports of random musk associates, some of whom work
Speaker 5: for the federal government, some of whom don't work for
Speaker 5: the federal government, like just like barging in.
Speaker 2: To various parts of the bureocracy. If you're on Reddit,
Speaker 2: right now.
Speaker 5: The Reddit forum where government workers are, It's like Thunderdome.
Speaker 5: It's just like one post after another of people who
Speaker 5: are confused, scared, outrage, or just kind of befuddled. Kurt,
Speaker 5: I mean, you wrote a book about eline kind of
Speaker 5: chaotic takeover of Twitter.
Speaker 1: Now, x I feel like we've seen this movie before.
Speaker 5: I mean, these moves really echo kind of what he
Speaker 5: did after taking over Twitter.
Speaker 4: Yeah, it's honestly like a little bit spooky the similarities
Speaker 4: between these two, right. I mean, you could see just
Speaker 4: in the headlines alone, Right, you see Elon sleeping at
Speaker 4: the office to try and get things done, working on
Speaker 4: the weekends, right, trying to power through everything. You see
Speaker 4: him eliminating people from essentially their access to be able
Speaker 4: to do their jobs without any warning. Right suddenly they
Speaker 4: just show up and they're no longer able to get
Speaker 4: into the systems that they use for their jobs. You saw,
Speaker 4: we all saw that email that came this past week,
Speaker 4: the fork in the Road, right.
Speaker 1: The same subject line, He used the.
Speaker 4: Same subject line exactly, and at Twitter it was very
Speaker 4: much a hey, you either opt into you know, my
Speaker 4: version of Twitter, my hardcore version of what this is
Speaker 4: going to be, or there's the door and you can
Speaker 4: let yourself out. And so we're seeing this playbook, you know,
Speaker 4: be used again. And I think what's shocking to me
Speaker 4: is that it didn't go smoothly at all at Twitter. Right.
Speaker 4: It's not as if like Elon got to the end
Speaker 4: of his Twitter takeover two months in and was like, Wow,
Speaker 4: that went great, right. He even himself was like, yeah,
Speaker 4: that was pretty bumpy, Like things are tough. I scared
Speaker 4: off a bunch of advertisers. You know, maybe maybe didn't
Speaker 4: handle everything the best way that it could have been handled.
Speaker 4: And yet here we are employing that same playbook at
Speaker 4: a national government scale. And you know this, you know, Max,
Speaker 4: we all know this, Like if Twitter goes down for
Speaker 4: twenty minutes, we'll be fine. Like not ideal, but we
Speaker 4: will all be okay. I mean if the US government,
Speaker 4: I'll be fine. If the US government, you know, payment
Speaker 4: system goes down or some type of defense system goes
Speaker 4: down because someone is rushing to do these things. Obviously
Speaker 4: the impact could be you know, so much more significant
Speaker 4: and harmful.
Speaker 5: I know you have to jump in a minute, but
Speaker 5: before you do, I just want to ask you one
Speaker 5: other question, which was this this sort of move to
Speaker 5: control the actual payouts.
Speaker 1: Is there a parallel with Twitter?
Speaker 5: Did he actually try did he like randomly cancel contracts?
Speaker 5: I actually can't remember whether whether it's how closely it tracks.
Speaker 4: Yeah, I mean he he basically stopped paying most of
Speaker 4: Twitter's bills, and he's still in legal fights with a
Speaker 4: bunch of vendors over unpaid bills. And he also, max,
Speaker 4: you will remember, didn't pay severance, right, So, even though
Speaker 4: he's telling a lot of these employees of the US government, hey,
Speaker 4: you can take this buyout and you'll you know, get
Speaker 4: paid through. However, many months he told Twitter employees that too,
Speaker 4: and he's you know, being ensued by thousands of former
Speaker 4: Twitter employees right now for what they are arguing was
Speaker 4: insufficient severance. So, you know, a lot of similarities to
Speaker 4: this idea that he's just going to simply not pay
Speaker 4: the things that he doesn't want to pay and force
Speaker 4: people to come and collect that money. Unclear if that's
Speaker 4: exactly the approach that that he'll take here, but I
Speaker 4: wouldn't be shocked, right he tends to to welcome a
Speaker 4: legal fight because he has the resources and the time
Speaker 4: to drag these things out forever. Whereas a lot of
Speaker 4: the people who he you know, ultimately stiffs with this stuff,
Speaker 4: they don't and and they may you know, not find
Speaker 4: it worth it to fight him in court. So I
Speaker 4: imagine this will be the beginning of, you know, if
Speaker 4: I had to predict a lot of legal issues with
Speaker 4: what's going on here over the these first ten days.
Speaker 5: Kurt, thanks for thanks for being here. We'll let you
Speaker 5: enjoy the rest of your weekend. Dana and Sarah and
Speaker 5: I will try to break this down. Sarah, I was
Speaker 5: texting with a source, a former OMB employee who who
Speaker 5: knows budget stuff pretty well, and sort of asking, how
Speaker 5: how does this rate from like just normal political wrangling
Speaker 5: to something much more serious?
Speaker 1: Where where do you think?
Speaker 2: How significant do you think this is?
Speaker 6: I mean, this strikes at the at the very founding
Speaker 6: ethos of the United States of America, that we have
Speaker 6: this separation of powers and that the Congress controls the purse.
Speaker 2: Right.
Speaker 6: This is this is Musk is as an arm of
Speaker 6: the executive branch, who's not even really he's he's an sge.
Speaker 6: We can talk about that a little bit more later,
Speaker 6: but he's not really even a government employee taking control
Speaker 6: of all of the money that the US government pays
Speaker 6: out for for salaries, for contracts, for contracts by the way,
Speaker 6: which which Musks companies receive payments from the US government.
Speaker 6: So not only is there huge conflicts of interest, but
Speaker 6: it gets at some of the structural assumptions or at
Speaker 6: least you know, rules that we have over how the
Speaker 6: US government works, and the functioning of these systems is
Speaker 6: critical to global confidence in the dollar, global confidence in
Speaker 6: the US's ability to pay its bills. It's one thing
Speaker 6: for Twitter to stiff a landlord. It's another thing for
Speaker 6: the United States of America to not be good for
Speaker 6: its money. Right, that is, that is a more serious issue.
Speaker 6: And to be clear, we haven't seen any evidence yet
Speaker 6: that Musk has not paid out anything that the US
Speaker 6: is supposed to pay out. But this is this is
Speaker 6: power that he's not supposed to have, at least structurally,
Speaker 6: even if Trump has allowed him to have it. And
Speaker 6: so yeah, I'm very alarmed by that.
Speaker 5: We should say this, this payment system, it's enormous. The
Speaker 5: New York Times said five trillion dollars in twenty twenty three.
Speaker 5: It's Social Security checks, it's Medicare, it's it's payments for everything.
Speaker 2: So it's not just the risk of default, but like
Speaker 2: the risk.
Speaker 5: That somebody doesn't get their social security, that schools.
Speaker 1: Don't get funded, and so on.
Speaker 5: The person I was speaking to is saying, essentially, the
Speaker 5: question is what does he do now? So like, does
Speaker 5: he just use this data to write some tweets, which
Speaker 5: would create some concerns potentially because there's private information here,
Speaker 5: you could imagine him getting stuff wrong.
Speaker 1: We've already seen him get stuff wrong.
Speaker 5: And then there's a sort of sliding scale to bad
Speaker 5: where the next step would be unilaterally defunding stuff, which
Speaker 5: I mean Musk has said that's what he wants to
Speaker 5: do at times. Trump has said that's what he wants
Speaker 5: to do. And then and then the furthest along on
Speaker 5: the scale would be can he actually make payments? You know?
Speaker 1: Could he could?
Speaker 5: He could he use this system to pay himself or
Speaker 5: or or somebody else? And and I don't think we
Speaker 5: know the answer to that question, Dana. Part of what
Speaker 5: makes this so concerning is, Yeah, this is not just
Speaker 5: a normal White House official. This is not somebody who's
Speaker 5: been vetted, who's subject to financial disclosures, who's put all
Speaker 5: their assets in a trust. It's also somebody who's very
Speaker 5: very erratic. I mean, like the fact that this is
Speaker 5: Elon and not some other Trump figure is part of
Speaker 5: why I would say people are concerned.
Speaker 3: Yeah, I mean I think to take a step back,
Speaker 3: you know, we need to sort of recalibrate the way
Speaker 3: that we've been thinking about Elon Muskandoge. I think originally
Speaker 3: a lot of the reporting was like, Oh, it's this
Speaker 3: like advisory council that he's doing with Vivek Ramaswami. And
Speaker 3: then it was like, oh, actually Vivek's out, it's just Elon,
Speaker 3: And then people were still acting like it was just
Speaker 3: this sort of like advisory board. But no, now it's
Speaker 3: actually within the government. He's sleeping at the old Executive
Speaker 3: Office building. And what's happening now and this is what
Speaker 3: you know, we at Elon Incan elsewhere within Bloomberg would
Speaker 3: love our listeners support with is like he's got teams
Speaker 3: of people fanning out to every agency, you know, sort
Speaker 3: of setting up shop and with Treasury. I think why
Speaker 3: it is so alarming is that because a career official
Speaker 3: basically you know, tried to stop them from getting their
Speaker 3: getting their hands on this data, and it was forced
Speaker 3: to resign or was forced out earlier this week, and
Speaker 3: so the Washington Post broke David liverering. Yeah, and so
Speaker 3: you know, he was forced out, and then we basically
Speaker 3: announced his retirement on Friday. And then so the sequence
Speaker 3: events was the Washington Post broke the story, and then
Speaker 3: you know, everyone was writing about librink resigning. Senator Ron
Speaker 3: Wyden from Oregon wrote a letter to BESSNT yesterday being
Speaker 3: like why, like why did you give them access to this?
Speaker 3: And then we have the New York Times story that's
Speaker 3: out today, and so it's just we have to like
Speaker 3: take a step back and constantly remind ourselves. I think
Speaker 3: how unprecedented it is that the world's richest person, a
Speaker 3: government contractor who runs six companies and maybe an SGE,
Speaker 3: although I haven't seen like firm proof of that, is
Speaker 3: basically waltzing in to every government agency with his associates,
Speaker 3: demanding access to data that typically has not been given
Speaker 3: to someone like him and that has always been closely
Speaker 3: guarded within the agencies itself.
Speaker 6: Let me just like put that on another another layer
Speaker 6: of alarm here, right, Like, in some sense, the people
Speaker 6: who are frequenting this podcast are not alarmed that this
Speaker 6: is what Elon is doing. It's exactly what he did
Speaker 6: at Twitter. We joked on our internal slack when he
Speaker 6: was given this Doge power like that he would send
Speaker 6: a fork on the road email. He actually did that.
Speaker 6: And the difference here is that Elon paid forty four
Speaker 6: billion for Twitter. It's his company. I mean, he you know,
Speaker 6: some billions borrowed from banks, but it was his to
Speaker 6: choose to do what he wanted to do with it.
Speaker 6: And as much as as people felt like they have
Speaker 6: some ownership for Twitter because we all we've all used
Speaker 6: it and had it as part of our Internet ecosystem
Speaker 6: over the last few years, it's a private company that
Speaker 6: Musk owns. This is the US government. We own the
Speaker 6: US government. Taxpayers owned the US government. So when Musk
Speaker 6: takes down data sets as he's been doing, when he
Speaker 6: removes you know, and I say Musk, but you know, Doge,
Speaker 6: the Trump administration extensions of Musk's ideas. When he does that,
Speaker 6: that's a different story. That's, you know, something that all
Speaker 6: taxpayers and citizens have to reckon with and could be
Speaker 6: directly affected by. So I don't want to lose sight
Speaker 6: of the fact that, like, although this is similar to
Speaker 6: what he did at Twitter. It's much more extreme and
Speaker 6: much less authority on his part to even be a
Speaker 6: person doing this sort of thing with the US government.
Speaker 5: You know, it's interesting because everything you're saying is true,
Speaker 5: but at the same time time, this is kind of
Speaker 5: what Trump and Musk promised. I mean, you know, there
Speaker 5: was a lot of there's been a lot of discussion
Speaker 5: about like, well, it was Project twenty twenty five. Trump
Speaker 5: sort of ran away from Project twenty twenty five and
Speaker 5: and said it had.
Speaker 1: Nothing to do with him.
Speaker 5: But anyone who's paying close attention knew that there would
Speaker 5: be this effort to sort of take parts of the
Speaker 5: sort of non partisan civil service and put them under
Speaker 5: the executive branch. And I think what has changed, like
Speaker 5: what is different from what maybe some people anticipated, is
Speaker 5: that we thought it would be like a bunch of
Speaker 5: heritage guys doing this, and that Elon Musk would be
Speaker 5: like making a lot of noise, or I would say
Speaker 5: on this podcast, we actually we were pretty bullish on
Speaker 5: Elon Musk and Trump's staying together. But there's the sort
Speaker 5: of conventional wisdom was like Elon's going to be off
Speaker 5: in this Blue Ribbon Commission and these kind of like
Speaker 5: extremely conservative elements, or the Trump administration would be trying
Speaker 5: to do things like this, trying to control more closely payments,
Speaker 5: even maybe even trying to defund the government. And what's
Speaker 5: different here is it's Elon Musk, and I think that
Speaker 5: creates just so much unpredictability and tons of risk. You know,
Speaker 5: Kurt was saying that how ineffective Musk was at Twitter
Speaker 5: in the early days, and again, like you're saying, Sarah,
Speaker 5: like the price of ineffective could be very serious. But
Speaker 5: of course it does come with kind of this super
Speaker 5: charged ego energy and just like not caring, like willing
Speaker 5: to cross lines. I think that maybe other sort of
Speaker 5: more experienced in government types, people who might have to
Speaker 5: face a confirmation hearing, wouldn't be willing to cross those lines.
Speaker 3: Yeah, Elizabeth Warren just put on a statement it's alarming
Speaker 3: that Elon Musk has access to government payment systems used
Speaker 3: to deliver Social Security and Medicare benefits. He also drove
Speaker 3: out the senior career official at Treasury responsible for preventing
Speaker 3: a potential default on the US debt.
Speaker 6: I'd also love to know to what extent Trump has
Speaker 6: given permission for a Musk to do this, right, he
Speaker 6: may have said, like do what you need to do,
Speaker 6: or like you have my blessing to do what you've
Speaker 6: done at your companies to get them to the point
Speaker 6: they're at. I don't know if those in Trump's circle.
Speaker 6: I can't imagine that they that they knew the specifics
Speaker 6: of what what it would take to get Musk's vision
Speaker 6: executed in the way he wants to execute it. I'd
Speaker 6: love to know more details on who knows what, who's
Speaker 6: approving what, who's actually in charge.
Speaker 5: Yeah, So just as we start to wrap up, I
Speaker 5: want to just sort of try to spin this forward
Speaker 5: with you two, Dana, what are you going to be
Speaker 5: looking at in terms of like in terms of trying
Speaker 5: to understand like just how unpressed just how much power
Speaker 5: does Musk have?
Speaker 1: How involved is Trump? Like, well, like what are what
Speaker 1: are what are you.
Speaker 5: Looking at in the coming days and what should listeners
Speaker 5: be paying attention to.
Speaker 3: I mean, I think we just need to be wrecking
Speaker 3: with the with the fact that Musk and Doze are
Speaker 3: going agency by agency by agency, Right, It's like O
Speaker 3: M B O, PM, Treasury, the GSA, Education USA. I
Speaker 3: d like we need to like really sort of get
Speaker 3: a better grip on like who from DOGE is now
Speaker 3: landing at each of these agencies, what data are they
Speaker 3: getting access to and what is what are they actually doing?
Speaker 3: And how are federal workers resisting?
Speaker 5: Yeah, and I'll just jump in with one final thought
Speaker 5: and then Sarah, I want to I'm going to go
Speaker 5: to you. But for me, I think the thing to
Speaker 5: keep in mind here is that unlike Twitter, you know,
Speaker 5: Sarah kind of laid out what what why, this is
Speaker 5: potentially a lot more dangerous than if Elon Musk kind
Speaker 5: of messes with Twitter.
Speaker 1: It ruins my joke machine.
Speaker 5: But but he could ruin the most powerful you know,
Speaker 5: the government of the most powerful country of the world
Speaker 5: or something.
Speaker 1: I want to remind people though.
Speaker 5: That you know, there's a there are going to be
Speaker 5: politics here and a lot of this stuff is deeply,
Speaker 5: deeply unpopular. Cutting off each paint, each time he cuts
Speaker 5: something off, and if he makes a mistake, it's going
Speaker 5: to be it's going to create a sense of crisis,
Speaker 5: and that sense of crisis, it may take a while
Speaker 5: for voters to pay attention, but there will be a
Speaker 5: political cost. And saray your point, I think that will
Speaker 5: start to raise questions about kind of where is Trump
Speaker 5: Sarah final thoughts for you, kind of what are you
Speaker 5: going to be looking at over the next couple of days.
Speaker 6: I mean, of course, the legal reaction, the congressional reaction, like,
Speaker 6: how does the government once they realize what has happened,
Speaker 6: what has occurred, how does the government react? Do they
Speaker 6: try to stop this? Can they stop this? And if
Speaker 6: they tried, like, does Musk back down? The other thing?
Speaker 6: I just want to I just want to be clear
Speaker 6: about with Twitter, what Musk was saying he was doing
Speaker 6: things for and what he was doing things for, we're
Speaker 6: two different things. He said Twitter was all about free speech.
Speaker 2: That was his was.
Speaker 6: His rallying cry. He made all these changes in the
Speaker 6: name of free speech. Of course, we have seen that
Speaker 6: that free speech has not really been supported on Twitter.
Speaker 6: It's it's just been it's been a version of it.
Speaker 6: It's been uneven. It's been uneven. Here he's talking about efficiency.
Speaker 6: What I want to know, what really is Musk's endgame?
Speaker 6: What is his goal here? When we reflected on the
Speaker 6: Twitter acquisition and the chaos and what that led to,
Speaker 6: you know, people were saying, oh, he's losing advertisers, Oh,
Speaker 6: he's losing he's losing respect. Oh, you know, he's he's
Speaker 6: ruining his reputation. But it got him close to Trump
Speaker 6: and it helped him get so close to the US presidency.
Speaker 6: So ultimately we on this podcast decided that was a
Speaker 6: good acquisition with the US government. He's saying, this is
Speaker 6: about efficiency, He's saying, this is about using taxpayer money
Speaker 6: more wisely, getting rid of the bureaucra See what is
Speaker 6: he actually doing and what is the goal long term?
Speaker 6: What is the bigger picture? So I think that's that's
Speaker 6: really what I'm going to be what I'm gonna be
Speaker 6: looking for trying to direct reporters to find out about.
Speaker 1: Absolutely.
Speaker 5: Yeah, it all comes down his companies right there, that
Speaker 5: there's all these ways that he can profit from this.
Speaker 5: And we're going to be paying attention both to what's
Speaker 5: happening in the White House and in the Executive Office building,
Speaker 5: as well as what's happening in the rest of Musk's empire.
Speaker 5: Dana Sarah, thanks for joining me. Thanks for making this
Speaker 5: special podcast on a Saturday night.
Speaker 1: We'll see cibios both soon.
Speaker 6: Thank you, Thank you guys.
Speaker 5: This episode was produced by Mangus Hendrickson. Rayhan Armonci was
Speaker 5: our senior editor. The Elonink theme is written and performed.
Speaker 1: By Taka Yazuzawa and Alex Sagierra.
Speaker 5: Brendan Francis Newnham is our executive producer, and Sage Bauman
Speaker 5: is the head of Bloomberg Podcasts. A big thanks to
Speaker 5: Joel Weber and Brad's Stone. I'm Max Chafkin. If you
Speaker 5: have a minute, rate and review our show, it'll help
Speaker 5: other listeners find us and we will see you on Tuesday.