The break-up, we were told, was amicable. Elon Musk had spent long enough in government, finished the job he was hired to do, and was now leaving to spend more time with his companies. He would, of course, always be welcome back, and the Trump administration was eternally grateful for his service to America. It did not take long, though, for this conscious uncoupling to disintegrate into an acrimonious divorce.
Inevitably, the squabble played out on social media, where both parties proceeded to denounce each other in increasingly rabid terms. Musk accused Trump of being a hypocrite, a man who pretended to care about the US budget deficit while conspiring to make it worse. He said that Trump ought to be impeached and replaced by his vice president, JD Vance. Trump, meanwhile, hit back saying that the real problem with federal deficits was all the unearned subsidies and corporate welfare that Musk was leeching from Uncle Sam. And Steve Bannon piled on calling for Musk to be deported back to South Africa and have his citizenship revoked. By now, the love-in on the White House lawn, with Trump advertising Tesla and Elon expressing devotion, is but a distant memory. Bridges have been burned; there will be no reconciliation.
Though the level of vitriol and undignified childishness of the bickering between the President and the world’s richest man has been shocking, nobody can say that they didn’t see it coming. For weeks, the media has been reporting on the growing discord between Musk and the administration, primarily over the trade war. And other parts of Trump’s coalition — including billionaire and megadonor Bill Ackman — have made their dissatisfaction with the economic policies increasingly clear.
But the “big, beautiful bill” was the final straw. After spending a hundred days talking about fiscal responsibility, the danger of the exploding deficit, and suffocating levels of debt, Trump and his Republican Party made one of history’s greatest political U-turns and endorsed a bill that made all of these problems spectacularly worse. Adding insult to injury where Musk is concerned, the budget bill terminates nearly all ongoing subsidies for EVs, while leaving the corporate welfare handouts for internal combustion engines in place. Clearly, no good deed in Washington ever goes unpunished: after sacrificing his own reputation on the Trump altar, Musk has been rewarded with a knife slipped between his precious Tesla’s ribs. Some Democrats, sensing opportunity, are already calling for Musk to return to the fold.
But the dramatic collapse of a part of Trump’s political coalition isn’t just the result of two narcissists’ clashing egos. It signifies a deeper shift. Washington, after all, is intensely transactional; if you donate large sums of money to a party, you naturally expect to get something in return. Given how incredibly spendthrift Elon Musk has been, it is extremely noteworthy that he would end up being denied access to the pork barrel. This is not, however, a sign that Congress has decided to reject corruption — the existence of the big, beautiful bill is proof enough that the swamp has only gotten worse. No, the messy divorce is a sign that the political process — even the process of ordinary political corruption — is starting to break down.
Congressional Republicans, meanwhile, are getting queasy because the bill essentially represents a capitulation in the face of looming fiscal disaster; a resolution to simply sail the Titanic straight into the iceberg. The Trump administration sold itself as the last chance to try to steer the ship to safety before America’s state finances collapsed. But instead of changing course, Trump and the GOP actually decided to throw more coal into the boiler and go full speed ahead.
This time around, their fiscal profligacy has not been without consequences. The bond market is already wobbling, as weakening demand for more dollar debt slams head first into a state that is poised to gorge on even more unsustainable borrowing. Combined with a capricious and almost arbitrary economic war against the rest of the world, weakening America’s internal economy while alienating allies and making them less willing to bail America out from its fiscal irresponsibility, and you see the makings of a perfect storm.
“The Trump administration sold itself as the last chance to try to steer the ship to safety before America’s state finances collapsed.”
The parallels between this crisis and the one that triggered the French Revolution of 1789 grow ever stronger. Elon Musk has played out his role as America’s Jacques Necker to its conclusion; he has gone from rockstar technocrat enjoying widespread popular support to spurned sidekick whose attempts at reform were frustrated and blocked by the very people who brought him in in the first place. The French monarchy did actually try quite hard to escape its looming bankruptcy during its last years in power; but, just like with DOGE, those reforms became more and more chaotic and even tyrannical or illegal towards the end, as the political system slowly collapsed into acrimony and infighting.
Meanwhile, in America, as the “big, beautiful bill” kills off even the pretence that Trump is working to forestall financial disaster, and with Congress so gridlocked and the political system so polarised and dysfunctional, there’s only really one politics left that still works: the politics of executive fiat. With Trump taking the same path as Louis XVI, will he suffer the same fate?
Certainly, his administration is going to go down fighting; as it loses many of the battles it began this term by initiating (the trade war, peace in Ukraine and the Middle East), it is simply picking more. Trump kicked off this term declaring war on illegal immigrants and the federal bureaucracy, and even though neither has gone well, he’s also declared war on Harvard University. Perhaps, though, this impulse to constantly pick new fights is perhaps less irrational than it appears. America is going broke, congress no longer works, laws can barely be passed, and the bureaucracy itself is slowly failing. The only way to cut spending in that environment is by resorting to semi-tyrannical executive action.
While the official rationale behind the war on institutions like Harvard, or research funding more generally, often cites issues such as antisemitism, or wokeness, or DEI, it’s increasingly clear that the money withheld will never be restored. While this stand-off between Trump and the institutions could be described as a culture war spun out of control, or a distraction from other failures, it is also, in truth, a sort of improvised bankruptcy proceeding. When the Soviet Union slowly went to pieces, the same thing happened: at first, the money simply stopped coming, and only later did people belatedly realise that this was the new normal, and the money would not be coming back. In truth, there is no other way to even attempt to cut spending in America right now; Congress is simply incapable of doing the job.
Perhaps, five months ago, it was possible and indeed reasonable to talk about Trump’s administration in terms of “will they fix it or won’t they?” There was momentum and DOGE held a threatening promise. But today, the man who embodied that reform is now openly denouncing his former political allies and the system has proved resistant.
The President, meanwhile, is openly threatening some of America’s most dynamic companies, because of personal animus. Tesla and SpaceX, whatever their flaws, still represent an area of genuine industrial innovation in America, at a time when deindustrialisation has devastated it. Destroying Tesla out of pique or petty revenge won’t do America any good, but one gets the sense that “doing good for America” is not really on anyone’s agenda any more.
