TechScape: Will Elon Musk fire a third of the US government?
Hello, and welcome to TechScape.I’m Blake Montgomery, US tech editor at the Guardian.In this week’s newsletter: Elon Musk and Donald Trump want to create a “Department of Government Efficiency”, crypto wins big across the board, and a modern equivalent of Lysistrata takes hold on TikTok.Thank you for joining me.Trump, president-elect of the US, said he wants to appoint Musk, the world’s richest man, as the country’s “secretary of cost-cutting” to reduce bureaucracy in the federal government by an order of $2tn, roughly a third.
Trump announced in September that he would create a “Department of Government Efficiency”,Musk had pushed for the idea and has since relentlessly promoted it, emphasizing the acronym for the agency: Doge, a reference to a meme of an expressive Shiba Inu,Trump said the agency will be conducting a “complete financial and performance audit of the entire federal government, and making recommendations for drastic reforms”,In a video posted on X two days after the election, Trump said he would “immediately re-issue my 2020 executive order, restoring the president’s authority to remove rogue bureaucrats”,He wants to “clean out the deep state”.
His promises echo his slogan on The Apprentice: “You’re fired!” Project 2025, an influential and controversial blueprint for Trump’s second term, lays out ways to make bureaucrats fireable.The billionaire does not seem to be under illusions of what will happen after his proposed cuts.Musk has extensive experience slashing corporate spending and he’s promised to cull federal payrolls in much the same way.He cut staff at X, formerly Twitter, by 80% after buying it in 2022, a move he said prevented a $3bn shortfall, but has not otherwise paid off.Revenue is in steep decline and advertisers have absconded, making a comeback seem unlikely.
As the CEO of SpaceX, though, he has garnered a reputation for launching rockets more cheaply than competitors by negotiating with suppliers and keeping operations lean.The billionaire does not seem to be under illusions of what will happen after his proposed cuts, admitting that reducing spending “necessarily involves some temporary hardship”.Americans do want to spend less – of their own money.Do they want austerity and less financial assistance from the federal government? Do they want the world’s richest person admonishing them to cut their expenses?Musk has already asked Trump to appoint SpaceX employees to top government positions, the New York Times reports.The president-elect promised to ban bureaucrats from taking jobs at the companies they regulate.
Such a rule would seem to bar SpaceX’s lieutenants from the Pentagon’s door,But the president-elect has never shied away from cronyism,The two are not trying to avoid the appearance of a conflict of interest: Musk’s role in the government will be structured so that he can maintain control of his companies, the Financial Times reports,In his first term, Trump and his team struggled to fill the thousands of government appointments needed to run the federal government,Former New Jersey governor Chris Christie said the administration never fully recovered from its failure to find those appointees.
Perhaps adding Musk to the equation is meant to prevent a repeat of such laggardliness.In an extreme version of the new administration, Trump and Musk simply eliminate any position for which they can’t find a friendly appointee.In John Kennedy Toole’s Pulitzer-winning 1980 novel A Confederacy of Dunces, the idiot hero, tasked with organizing an intractable pile of files at his new job, eradicates the company’s mess.Ignatius J Reilly is no genius of organization, though; he is just throwing cabinets full of records away.It is easy to imagine Trump and Musk following his example.
What will stand in Musk’s way, however, is one of his sworn enemies: labor law,Tesla is the only major US carmaker that does not employ a unionized workforce,The billionaire CEO wants to keep it that way,Federal government employees, by contrast, enjoy strong employment protections that would hinder Musk’s slash-and-burn approach to cost-cutting and possibly render it impossible,For all the different companies he runs, Musk has little experience managing public sector employees.
He may find them less pliable lions than he is used to taming.Read more about the remarkable four months that saw Elon Musk go from refusing to endorse a candidate to becoming perhaps the most powerful man in American politics after Donald Trump.And read more about how a second Trump term could enrich Musk.Quite a lot, it seems.In 48 races that saw donations by cryptocurrency’s biggest Pac, Fairshake, every candidate backed by the industry has won, Bloomberg reports.
More than 60% of that cash supported Republicans or opposed Democrats, per Bloomberg.The industry placed its biggest bet in Ohio, where Republican Bernie Moreno faced off against popular incumbent Democratic senator Sherrod Brown.Moreno received $40m from cryptocurrency companies.Brown chaired the Senate banking committee and wanted tighter regulation on digital currency.Earlier this year, crypto companies spent $10m to attack Katie Porter, a proponent for more stringent cryptocurrency laws, in the California senate primary.
Porter lost.Protect Progress, another pro-crypto Pac, spent $10m each on Senate races in Arizona and Michigan where crypto wasn’t much of an issue.Both its favored candidates had voted in support of the industry on key bills, though.In addition to the long-term benefits of a friendly, less restrictive regulatory environment, the crypto industry has made immediate financial gains.Bitcoin is trading at record highs, breaking $75,000 late Tuesday night.
Fairshake did not make a contribution in the presidential race but stands to benefit from its outcome anyway,Trump sells his own cryptocurrency now and supports the industry with his full throat, reversing his position on crypto from his first term,Musk has acted as a hype man for cryptocurrency, particularly Dogecoin, years before it was popular,(Harris neither embraced nor rejected the crypto,)Musk especially seems amenable to one of crypto’s highest priorities – the firing of Gary Gensler, the securities and exchange chair.
Sign up to TechScapeA weekly dive in to how technology is shaping our livesafter newsletter promotionCoinbase, the second-largest cryptocurrency exchange in the world, gave Fairshake $25m.Coinbase’s CEO, Brian Armstrong, wrote the day after the US election: “DC received a clear message that being anti-crypto is a good way to end your career.” He may be right.The industry is second in political contributions only to fossil fuel companies, according to the consumer advocacy non-profit Public Citizen.I’m watching a dystopian coffee shop comedy on Instagram and reading about why the South Korean 4B movement – a modern, real-life Lysistrata – is going viral on TikTok.
My colleague Alaina Demopoulos writes:The basic idea: women swear off heterosexual marriage, dating, sex and childbirth in protest against institutionalized misogyny and abuse,(It is called 4B in reference to these four specific no-nos,) The mostly online movement began around 2018 protests against revenge porn and grew into South Korea’s #MeToo-esque feminist wave,In the wake of Trump’s victory, she writes, 4B is on American women’s minds,Read the full story here.
Australia will ban under-16s from using social media.But how?Canada orders TikTok to close offices over “security risks”.Tech and business leaders are congratulating Trump.Meta is allowing the US to use the company’s AI for military purposes after an embarrassing scandal involving the Chinese military.AI companies are psyched for less red tape.
Case in point: the man in charge of tech policy on Trump’s transition team works at an artificial intelligence startup worth $14bn, giving the impression that we won’t see any restrictive regulation of AI from the new administration.“Better, faster, cheaper”: that’s the verdict by our consumer technology editor, Samuel Gibbs, gives Apple’s MacBook Pro M4 in this five-star review.
UK will allay Trump concerns over Chagos Islands, says minister, as Priti Patel says Tories opposed to deal– as it happened
Stephen Doughty, a Foreign Office minister, was replying to Nigel Farage about the Chagos Islands. He said that, if the UK had not negotiated an agreement with Mauritius, “a legally binding decision against the UK [on sovereignty] seemed inevitable”. He said:I fundamentally disagree with what [Farage] has had to say.Let me be absolutely clear, this government inherited a situation where the long-term secure operation of this crucial military base [Diego Garcia] was under threatInternational courts were reaching judgments. International organizations were taking steps not to undermine Mauritian sovereignty, and this threatened the secure and effective operation of the base
Kemi Badenoch is her own worst enemy … and a gift for Keir Starmer and Labour | John Crace
On balance, Keir Starmer can probably live with this. The first four months of his time in office may not have been quite as straightforward as he would have liked – he must have been hoping for a six-month honeymoon period – but at least he can tick off prime minister’s questions as something he doesn’t have to worry much about.Kemi Badenoch is turning out to be the gift that keeps on giving … to the Labour party. Put simply, the more you get to see of her the less there appears to be.Behind her rather patronising, condescending facade there’s a largely empty interior
Labour tells watchdog of police failures over intimidation of MP and supporters
Police failed to intervene when the family of Shabana Mahmood, now the justice secretary, and her supporters faced intimidation during this year’s general election campaign, Labour has told the elections watchdog.In a document seen by the Guardian, party officials said officers from West Midlands police left the count on polling day before Mahmood, a close ally of Keir Starmer, and members of her family were barracked by political opponents in the seat of Birmingham Ladywood.The alleged incidents happened amid a tense campaign between Mahmood and Akhmed Yakoob, the solicitor who campaigned primarily against Labour’s policies on Israel-Palestine.Officers declined on three occasions to intervene after intimidation of Mahmood’s canvassers by supporters of Yakoob, the submission to the Electoral Commission said. It is also claimed that a Labour canvasser who was a black woman was told by a Yakoob supporter she should not be in a mainly Asian area because the residents were “not her people”
Peter Mandelson’s consultancy advised Shein until early 2024
Peter Mandelson’s consultancy Global Counsel advised the Chinese fast fashion company Shein until earlier this year, the Guardian can disclose.The retail company contracted Global Counsel until earlier in 2024, though it never appeared on Global Counsel’s list of clients published by the Office of the Registrar of Consultant Lobbyists (ORCL).Lobbyists are only required to declare clients to the ORCL if they communicate directly with ministers or permanent secretaries on their behalf. A spokesperson for Global Counsel said: “Global Counsel’s submissions to ORCL reflect the requirements of the [2014 Lobbying] Act.”Shein declined to comment, but a company source confirmed that its government relations team contracted Global Counsel until earlier this year
Sue Gray rejects envoy role amid warnings Keir Starmer was to withdraw offer
Sue Gray has decided not to take up the post of nation and regions envoy after it became clear Keir Starmer was planning to withdraw his offer, the Guardian understands.Sources said the prime minister’s former chief of staff, who was on a “short break” between roles after standing down almost six weeks ago, had been told No 10 was likely to rescind the job offer before she had even taken it up.Downing Street insiders had grown concerned about the media attention that would follow Gray, which could have made it harder for her to carry out the role. They were also unclear about what exactly the job would entail.Sources told the Guardian that Starmer, who is in Baku at the Cop29 climate summit, was expected to give Gray a peerage
Green party says Starmer must do more to cut energy use to meet net zero targets – as it happened
The Green party has said that, if Keir Starmer wants to achieve his net zero targets, he will need to do more to get people to cut their energy use. Responding to Starmer’s announcement about a new emissions reduction target for 2035, the Green party MP Ellie Chowns said:The announcement of an 81% cut in emissions by 2035 is welcome – we need to remove fossil fuels from our economy as rapidly as possible.However, the transition to clean energy needs to be matched by moves on energy reduction. We need a mass home insulation programme and large-scale investment in public transport and active travel. Instead, we have seen Labour downgrade the retrofitting of homes, fail to make solar panels on new builds mandatory, hike bus fares by 50% and offer only loose change for walking and cycling
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