Bloomberg Audio Studios, Podcasts, Radio News. Welcome back to voter Nomics, where politics and markets collide. This year, voters around the world have the ability to affect markets, countries, and economies like never before, so we've created this series to help you make sense of it all. I'm Alegri Stratton.
And I'm Stephanie Flanders, So Steph.
This week are tackling an issue that I think we all think goes to the heart of what voteronomics is all about, which is basically boardrooms colliding with election results. And the reason it's particularly acute this week is probably there's two examples of it. One is what happened at the Washington Post over their decision not to endure well, their decision not to endorse a candidates at all, and whether or not that was complicated by their proprietors business interests.
And then the second is Elon Musk and his appearance not just once on stage for Trump.
And we had one president who couldn't climb a flight of stairs.
And another who was this pumping.
After getting shot, fight fight fight.
Many times over the last last few months. Now, his metamorphosis to sort of want to be politician continues to pace.
Your money is being wasted, and the Apartment of Government Divisions is going to fix that make the margin of victory so big that you know what can't happen.
So it's really quite acute this week, isn't it. Steph.
Yeah.
I mean we're used to there being lots of big corporate money involved in US elections, particularly since twenty ten, where there was a sort of big legal ruling that made it easier for that to happen, and for just asked amounts to go into these campaigns over the years. It always makes anyone outside the US there's sort of
head spin that the billions involved. But I think what is obviously distinctive about this season is, on the one hand, you have, as you say, the boardroom sort of chief executive level people very nervous of engaging even to say they support a peaceful transfer of power, which you would have thought would not be controversial. And at the same time a number of very high prive four billionaires being quite you know, quite closely associated with the Trump campaign.
And we should say there's also been money going on the other side, our own founder of Michael Bloomberg and also Bill Gates. It turns out very quietly have given up to fifty million dollars to Kamala Harris campaign in the last in recent weeks. But you know that's sort of that's been quite low key in their very large amounts.
And then you have, as you say, Elon Musk, very publicly not just supporting Donald Trump and amplifying some of the rhetoric and misinformation that is associated with the Trump campaign, but I think also seeming to specifically have corporate interest in Trump winning and potentially a future role in a Trump administration. I think that is a whole new ball game.
It does feel like something's changed. Warren Buffett back to Barbara in eight twelve and twelve and then Clinton in sixteen and this time staying out of the race. There's more examples of that that we could cherry pick, but that feels a particularly striking one. I think the question for later in the podcast is has something changed or is this a reversion to what should be normal? In
a moment, you'll hear our conversation with Charles Elson. He's a leading authority on corporate governance issues and the founding director of the John L. Weinberg Center for Corporate Governance. But before we hear from Charles, we're going to chat about one CEO who has zero qualms about sharing his thoughts and feelings. Elon Musk, our colleague that the podcast eat On Inc. Have created a special series about, you know, Musk's meddling in politics. It is called Citizen Elon, and
we are not going to speak with the host, Max Chafkin. Max, did you see this coming, the role that Musk is playing in politics?
Kind of yeah.
I mean I've been paying very close attention to Elon's political evolution over the last couple of years, and with the purchase of Twitter now x, he has been trending in this direction. I think the surprise to me anyway,
is just the amount of money that he's spending. You know, the latest filings, you know, it's above one hundred and thirty million, when when you sort of look at like what his pack has spent, the fact that there have been some dark money spending as well, that there's other potential races, and that there's still time between the last filing and election day.
You know, we're looking at probably.
Close to two hundred million dollars and that is an enormous amount of money. He's going to be one of the biggest all time political contributors. And I haven't even mentioned the fact that he spent forty four billion dollars to buy Twitter now X and that he has essentially turned that into a right leaning a sort of campaign mechanism for Foreign President Trump.
Even with those numbers, when you consider the stakes for Tesla, for SpaceX and so on, people have called this the business opportunity of the century for him.
That is business, yes, for sure.
And we've seen this with Foreign President Trump, you know, kind of the last go around, like various CEOs attempting to kind of leverage the fact that Trump is sort of ideologically pretty flexible and that he seems to like these sort of CEO types. But you're right, I mean, Elon Musk is kind of unique in his position to sort of benefit from an association with the former president, but also the risks that he faces in terms of regulation,
you know, from a potential Harris administration. Right he is a major defense contractor in SpaceX. He would very much like some additional contracts to launch rockets and perhaps develop weapons systems or whatever. You have have potential security concerns that have been raised at various times. I'm sure he
would very much like those to go away. You also have just like a host of regulatory agencies over the last five or so years that have opened investigations or have have had investigations, who have been looking into various parts of Musk's empire.
He would of course like to continue to ignore those. And then Tesla, his car company.
Which is, you know, the biggest source of his wealth, is very much dependent on regulatory structure that of course could change, and is also vuying to launch robotaxis, you know, autonomous vehicles, and is hoping to have friendly regulations there. So there are all sorts of ways that he's already the world's richest person, but that he could become even richer if Donald Trump wins in a week.
Do you think he's expecting a concrete role in the administration? I mean, obviously that the President Trump has talked about him leading a group to find efficiencies in government, and this potential conflict of interests all over that, given the amount of contracts he has with the government. But you think he's actually expecting to have a role in the government. For this is more of a defensive position.
It's hard to imagine Elon Musk is like a civil servant, right Like, I don't know that this is going to be a five days a week.
You can say the saying about Donald Trump being here.
I don't know that he's gonna be you know. I don't know if he's gonna get a badge and show up every day to work. But I do think that this role that he has announced for himself and that Donald Trump has repeatedly on the stump. I was at Madison Square Garden on Sunday in New York where Trump had this massive rally. Elon played a big role. They were both talking about it. Other people were talking about it was getting.
Huge applause lines.
The way I interpret this is that Elon Musk will have a big voice in how Donald Trump seeks to reform the executive branch. He's made that a huge part of house, of his campaign and his kind of political project. So I don't know that we should expect Elon to have cabinet post or something like that. I think it's much more likely that he will be effectively a senior advisor, maybe the most important senior advisor to the former president.
Unlike many business people, part of His sort of demeanor has often been that you get the sense that these companies are like train sets for them, toys, you know, that he gets to play with. He kind of has that air about him, And I just wondered, does he think the US government is now going to just be
another train set for him to play with? Now that he's bought his brought his way in with this support for Donald Trump and this particular candidate, he might have the scope to do that in a way he wouldn't with another candidate.
It seems like he definitely sees it that way now. Almost ten years ago or so, SpaceX began selling this flamethrower as a kind of a marketing stunt. They and when it became clear that you're not supposed to sell a flamethrower, he changed the name to not a Flamethrower.
Was a sort of jab at regulators.
When people brought up recently that, you know, him being the CEO of Tesla and directing federal policy might be a conflict of interest, he said, Oh, don't worry, We'll just change the name of the Department of Government Efficiency to not the Department of Government Efficiency. He clearly thinks that he can essentially approach government the same way that he's approached business, which is by the seat of his pants,
ignoring norms and regulations and like being very productive. And I think that is the optimistic story that you would tell. Like that is part of why Donald Trump is excited about. Why the voters and why that the crowds at Madison Square Garden and other Trump rallies have given him huge rounds of plause.
That's what they're excited about.
They think he's gonna bring that kind of crazy Elon Musk, you know, super productive, super weird out their business sense to politics.
Going back to sort of boring policy substance for a minute and stripping out some of the more colorful aspects
of this. One of the reasons why a few years ago you would have said that this was an unlikely combination was that the one thing that Elon was kind of politically identified with was action to combat climate change, and indeed is put that into action with Tesla with a huge investment in electric card That is one of the things that one would both the support for electric vehicles and the entire stance towards climate change would be one of the big changes under a Trump administration that
we'd expect. How does that work? How is he bridging that gulf?
Yeah?
I mean, as somebody who's followed Elon Musk for a long time, and you know, I first met him in two thousand and six. The thing that's weirdest about this is watching Donald Trump get on the stump and essentially deny that climate change is a real problem, and then watching Elon Musk agree with it, Because for such a long time that was impossible to imagine. Elon has been very closely defined with like sort of green capitalism and
so on, but he's been pretty ideologically flexible. And that definition of Elon as this green capitalist it really started during the Obama years, right. He kind of embraced it when it was most politically advantageous and has been walking away from it as it has become sort of maybe less politically advantageous.
The other thing is Elon Musk.
At this point has a dominant position in electric vehicles. So if Trump were to sort of get rid of all subsidies for evs, which would be a problem for Tesla, and make no mistake, it would arguably hurt Tesla a lot less than a lot of these other automakers who are not selling tons of electric cars right now.
Max.
The other thing that you, as you've known, been following him since twenty or six, then you will have the buy below or certainly the kind of almanac on his flip flops and his change in positions. For instance, Donald Trump. In the Wilter Isaacson biography, it's very clear that when Musk first meets him, he doesn't think much of him.
And now we have the possibility of him having a role in a possible Trump second presidency, and there's a host of other issues aren't there where he just changes his mind, either the facts so different or he's sort of evolved. If he were to have a role in government, it might be a bit dismal constraining, and he might think, actually, I don't want to do this again. But also he might decide, actually President Trump isn't doing quite what I won't, so I'm gonna go.
If Kamala Harris wins next week and and becomes a president, there are a host of these investigations, various, you know, like issues around his security clearance. Like I would expect all of those to continue, maybe to even intensify, you know, it would be it would be sort of natural to think that a new administration is gonna ask some hard questions about do we really want one of our largest defense contractors to be in regular touch with Latim rip Putin?
Do we really want one of our largest defense contractors smoking pot on the Joe Rogan Show, you know, as Elon Musk has done. Now on the other side, Right, there's the upside for Elon Musk with Trump is obvious. Right, Trump has said on the stump, We're just gonna order up some rockets and take him to Mars. Right, He's He's essentially like said, we're gonna have like I'm gonna give Elon Musk a multi billion dollar contract for for a Mars program that doesn't really exist at this point.
He suggested that he's going to let Elon Musk take a red pen to the government, which of course can help him. Now, the thing is, though Tesla's customer base is largely progressive is liberal, they are on the left, and I don't think the customer base has fully processed
what is happening. And so if Trump is elected, there is going to be a lot of talk politically about the role that Elon Musk played this historic amount of money and support he played, and that I think is going to lead to a backlash that is going to put Tesla under pressure. There are going to be a lot of people who own Tesla's who are I think they're already not feeling awesome about them, but are going to have to think, you know, is this the political
statement I want to make? And we've seen this happen with the former president before. He is a cultural force and it works in both directions and really help companies, but it can also create a lot of pressures that could put Elon Musk in an uncomfortable position, could make him want to walk away. Now, if Trump loses, I don't think Elon Musk is going to do a one to eighty. I think he is pretty committed to this this kind of like.
You know, right wing positioning.
If Trump were to lose very badly, like a like a sort of humiliating defeat, which doesn't seem likely based on the polls, then I don't know. Elan is a is a adaptable guy, and I would now be surprised if if he evolved again.
Well, we can certainly expect to see a lot of played out on X Twitter, You're gonna be so busy.
Absolutely, Yeah, that was great, Thank you so much.
Now we welcome Charles Elson. Charles is the founding director of the Weinberg Center for Corporate Governance and a leading authority on corporate governance issues. Charles, I mean this is real issues, right, This is corporate governance issues. This is CEO is trying to navigate what is a very finely balanced to your selection.
Absolutely, this is sort of governance one oh one, and it's frankly bord oversight of CEO's one oh one. And it's from a CEO standpoint, it's politics one one. It's a combo of everything rankly this year.
So Charles tell us, Okay, what is different this time round compared to others. Has something changed in this balance?
Well, I think when had happened. Traditionally CEO stayed out of elections. It just wasn't considered a good idea. You alienated too many people by doing it. And the role of the CEO is run the company, not to be a political figure. That changed a couple of years ago, I think really basically during the Trump administration, when there was significant opposition to him in parts of the business community.
And with the two thousand election, which was considered such a choice, if you will, between two dramatically ways of looking at things, and combined with the summer of George Floyd, companies became much more politically active than they had been. You saw all kinds of statements where companies were opposing
changes to the voting rights laws in certain states. You heard all kinds of demands for companies to make statements on political issues, and a lot of CEOs did and felt that it was their role their obligation to do so. Some did, I think, based on personal conviction. Others did it I think because they felt they were getting enormous pressure from their employees. You had the huge controversy at Disney where Disney announced it was not taking a position
on a particular law that it was. The CEO ultimately left, and this really started a debate in this country as to whether or not the CEOs should really be that
involved in the political process. They always kind of were, because companies did, through packs and whatnot, made contributions well through their packs, i should say, to candidates, and there were CEOs who personally contributed on both sides of the aisle to candidates companies are always accused traditionally of being very pro Republican, and a case that came out of the Supreme Court that basically allowed corporations to make direct
political effectively make political contributions, not to campaigns, but to make their views known on political issues Citizens United, if you recall, it came out during the Obama administration, and people on the left at least decried it, saying this is going to increase corporate influence over the elections. Problem is, it didn't work out that way. It turns out that most large corporations ended up supporting democratic causes as opposed to Republican causes, and it was the other party who
got upset about the ruling. So that's where That's kind of where we were until now that sets up for now.
It's very interesting you say that there's obviously been big money flowing into politics on both sides thanks to Citizens United. That decision, I guess that was in twenty ten. But that doesn't put a lot of money on both sides of the political argument in the US in a way that certainly in the UK and in Europe we would find is against our sort of culture of political contributions.
But the thing that striking this time, I would have thought was that even stating that you're in favor of free and fair elections has become something that chief executives are nervous of doing, and that seems like that takes things to a whole different level.
Oh, I think it does, because what happened was because after the significant corporate involvement, it created a blowback. It was felt that a number of companies in the stands they were taking were very I guess sort of left of center as opposed to right of center, and the particularly following the abortion ruling of Roe v. Wade, and a lot of folks on the right of the divide, felt that corporations had become a captive to the left
the divide. So they threatened, boycott's attacked, and CEOs for speaking out, employees got angry, and you created a mess. And the mess, frankly, could have been avoided had the CEOs not jumped into this thing to begin with, which happened, as I said, during the Trump era and after the
two thousand elections, that's what really blew it up. And a lot of people, including me, said, look, you need to stay out of this completely because it divides people, and companies only work if there's unanimity within the company on corporate purpose despite your politics. Now that being said, the democracy point I think you make a good one is why is it so terrible to support democracy? Because it became a politicized term. Trump was viewed as anti
democratic or complaining about the results of the election. He was a threat to democracy, so that term became rather than we all are supported democracy, the term became loaded and that it was well supporting quote democracy means opposing Trump, supporting you know, Joe Biden or Kambella Harris. That's the issue now, So.
Charles, can we just be clear. Do you think what we're seeing right now, which is essentially it looks like the sort of pedging by CEO sitting on the fence, whatever you want to call it, do you think that that is because of the very real possibility of retribution by a second president Trump or do you think that this is a backlash or you know, a swing back to the norm.
Oh, I think it's a return to the tradition. I don't think it's based on you know, fear of retribution. It's fear of retribution from your customers. That's the problems, and that's really what happened. I think they learn the lesson that, look, by taking a stance, half the country will love you, the other half will hate you, and that's terrible way to run a business.
People would be surprised to hear you say it's sort of back to the previous datus quote, because obviously in the old days, there wasn't a sort of majority of American voters expecting potentially violence on either side of election day, and we hadn't had a presidential candidate refused to concede an election result. So it does feel like the stakes are quite high.
I think the danger when you get jumped into this, whether you're pro or anti Trump or pro or Annie Harris, it's that because we're so divided as a country, no matter what you do in a political stance, you're going to offend half your audience, half your employees.
But it shouldn't be political, though, right. I guess that's the issue. I think that's what concerns people is and you pointed it out yourself that what has become political is actually supporting the constitution, right.
I don't think the Republican Party or the Democratic Party frankly at their core support violence. I don't believe that, and I think that in the end, if something does come up, I would be shocked if either party condoned it either way. I just don't think that's part of the There's a lot of heated rhetoric. But I think when push comes to shove, ultimately the rhetoric disappears and you come together as a country. But I just don't I don't see that happening clearly.
January the sixth slightly slightly complicates that assertion. I think we'd all like to agree that you're right, but I mean, it was it was it was a it was an uprising, and it was an uprising that had that did have some support from the then that then booted out President.
Well, he made a terrible mistake, and I think that, you know, frankly, his rhetoric was improper. I agree, And that's the problem with heated rhetoric on either side us. You know, his rhetoric or the rhetoric of you know, using fascists, this, that and the other. It's that it's really a bad thing to do. It insides violence on both sides. Trump, you know, he's a strange figure he's a populist and populist listen, Andrew Jackson was a populous
I mean, I can go back in history. I mean I can think of Gosh, wave back, Lofolette was a populist. I mean, they all use that kind of rhetoric.
It's a much longer tradition in the US than it is in other places. And you certainly have populis on both sides going back into the nineteenth century, and we've had in the early nineties and two thousand sort of precursors.
Patrick Buchanan, all those people. I think you're describing what and you talk about the boardroom, you describe what many chief executives certainly the approach they would like to take if they feel, you know, if they're able to, if the situation doesn't become so polarized that they're really forced to sort of stand up for something. I guess many
people would say the action is elsewhere. Actually in these in the billionaire donors to it with very kind of personal support for candidates, and you know, in the case of Elon Musk, for example, we'd talk elsewhere in the program about, you know, the very public role he's taking. I just wonder do you think that.
Well, you know, mister Musk and I have had our disagreements on his pay issues. You know, look, I think a normal CEO, a normal CEO, and a normal board would never have been allowed to do what mister Musk has done in this situation. I think that what he's done is expressed as dramatic support for one candidate, and it's polarizing. I'm sure that people who work for him probably are just as divided as the rest of the country. And taking a position like that is a real problem
in your organization. And I think that that gets to the heart of the issues with Tesla and the board. This was the criticism that the judge had that the board was not independent she found of mister Musk, and I think that this what's happened today kind of demonstrates that because any normal board would say stay out of this, this is not your area.
You say, normal bullet, But we're talking about Ela Musk and we're talking about Tesla. I'm talking about space X. I mean, this is a company the reverse park to rocket, you know, ten days ago, two weeks ago. It's not a normal company. Where does this end with this? As you say this very abnormal relationship between a billionaire an entrepreneur that's being offered a job in government. Right, we know, if Trump wins, he's going into government. Where does this end?
Well, I think the question is does he actually end up with a job and A does Trump win? B does he actually end up with a job in government? And see what has that due to the rest of his companies. You got to remember too, He's got a lot of stock in Tesla, and he leaves Tesla as what he threatened to do, the stock in Tesla falls
and his worth falls. That's the crux of this whole compensation dispute, which has to do with giving him an extra twenty percent of the company, which you remember, or fifteen percent, which if you remember to begin with that he had a lot of twenty five percent. He sold some of it to buy x now, and so is ownership position came down. He wants this compensation to bring his position up. But if he leaves Tesla, theoretically so it's argued, the value collapses. That's the hell of the
whole thing. It's a strange situation. But the question is why in the world would a board let someone put themselves in this particular situation. Remember, they did just stockholders of Teeslas. They did, and that suggests to me, or at least it backs up the judges view that they weren't independent of him. That's all she said in the opinion. They weren't. They were paid so much money that they be on that board that they were not going to be independent.
So I think there's any downside for company executives or for companies to have sat this one out to the extent that they've managed to do that. I'm just wondering when things like in the sort of the heat of Black Lives Matter, I think there were a lot of companies that just felt, due to the nature of their customer base, they couldn't afford to stay out of it. They had to have a carefully modulated but a sort
of sympathetic statement. And obviously the statement black lives matter also should not be controversial, even though it came to signify many things, but both in terms of their relationship with their employees and particularly certain generations, younger generations, but in the sort of broader customer base. I just wonder whether you think there's any companies that at least are
a little bit nervous about the flip side. You know, they may be worried now about retribution by future president Trump, but what about five or ten years time if they've not been vocal at key moments.
I just think you make a mistake when you mix politics and business, politics and economics. I think you make a mistake because an economic venture is oddly enough, one of the few places still around where everyone can agree and that we all want to produce a good product and a fair price and make a profit and get paid. Well,
that's everyone can agree to. That, that's universal, and that's what's so nice ahead of business that you check your politics at the door, you check your clients at the door. In the end, you need to separate the two. You know that. That's why you never talk about politics at Thanksgiving, which is coming up here in a couple of weeks, because it always ends up in a terrible argument and it's sort of pointless. Just think of it this way. If the only people saying crazy things are the politicians,
then the rest of the world stays sane. Everyone else.
If it's true that Jeff Bezos prevented them from declaring a choice in the presidential election, as they always have in an editorial. Do you think that was a good judgment by Jeff Bezos about the rest of his company.
I think it was a very bold decision of William Lewis's part. He and I are old friends, and I'm curious as to what whether it came from Bezos or it came from from William. But it was an interesting stand and in a way it was smart, I think, and suggesting in this partisan year, we are going to report and let you decide. We're not going to try to influence you one way or the other, because once you start to take a position, it affects the way
you present the facts. And I think that's the argument here. Again, I don't know what their reasoning was or not, but at least when I saw it, I took it that way.
And it's complicated by the fact that three of the editorial board have resigned over it. I think that there's some suggestion that they had written an editorial for Kamana Harris one. And I think the other complicating fact has to be you know, I think we have to agree that that Bezos having such financial interest both in his Blue Origin company but also in aws in federal government contracts does make it a complex picture.
It is.
I've had a lot of sympathy reading his quote saying listen, actually, newspaper endorsements don't really matter anymore. I think we can all agree that there's some evidence of that one. And also to your point just then is powerful, which is it just creates a sense of bias that irritates fifty percent of our readership. That's one hand, But on the other hand, he is his companies make a lot from the federal government.
You know, that's that's a fair point. Again, I don't know where that came into is thinking or not.
It insists not.
It is fascinating that this is the first time I can remember where a paper actually said actually the two papers that are saying, you know, they're not going to endorse anyone.
That was quite clear as well. The publishers in LA Times they've prevented it.
La Times, Yeah, which I thought was really But I get they have an interesting point, But do people really support the endorsements and when you endorse?
But why have they not had this point before? I guess that's what we're going back to the uniqueness of Donald Trump, aren't we Because why is it that businesses felt more nervous about this than in the past.
And I think, and I think, to just back up your points, Steph might view, you know, Charles, earlier you were saying this is a healthy corrective to the kind of over in elligence of CEOs, thinking people cared about their opinion esg and all of that. But I suppose my kind of head scratch on this is why why is it at one minute to midnight? Why is it
sort of ten days to go? Why did we not see this repositioning earlier in the year when they say, look, okay, we're approaching this election year and we're going to have a different approach. We're not going to be endorsing, and we're going to sit back and watch.
I think the rhetoric. I think the rhetoric got too hot. I think the I think the assassination attempt, the two attempts on Trump. I think that the language that you began to see, you know, the last couple of weeks, particularly the use of the term nazi fascist, really turned
up the heat so significantly that people became frightened. There's nothing more divisive than this within families that happens, you know, I would constantly get into a debate with my dad at Thanksgiving, and finally I realized he's not going to change my mind and I'm not going to change his. What's the point you enjoyed it?
That's you have raised a good point. There's many things that people are sort of raising themselves and potentially dreading about the next few weeks and Thanksgiving dinner with the rest of the family.
I'm going to be in England for the election, so you come.
To the safe. That's fantastic. Charles Elson, thank you very much for joining us. Thanks for listening to this week's voting nomics from Bloomberg. This episode was hosted by me Alecri Stratton with Stephanie Flanders. It was produced by Sumersadi, production support from Isabella Ward, sound designed by Moses, and special thanks to Max Chafkin and Charles Elson. Please subscribe, rate, and review wherever you listen to podcasts.