Elon Musk is the Canary in the Coal Mine for the 99%
Musk’s Exhausted Meltdown Foreshadows a Looming Powder Keg
Elon Musk is succumbing to the relentless pressure of operating a public company sagging under the weight of prioritizing short-term quarterly investor expectations. Relenting to shareholders is costing Tesla its autonomy, success in long-term interests and forcing it to wear the albatross of the most shorted company in the US stock market. Musk’s emotional New York Times interview shows a man balancing on the razor thin edge between tears and laughter, lamenting the difficult year he’s had dealing with short sellers and the pressures of being a public company with ambitious production goals that leave him sleeping at work many nights. It’s understandable why someone in that position would flirt with the idea of making their company private again; liquidity and company control must be tempting.
Musk’s subsequent tweet expressing his desire and “secured funding” to once again make Tesla a private company resulted in a stock bump which sparked a federal Securities investigation. It’s arguable that Musk’s strategic and powerful social media activity is keeping Tesla’s stock price afloat via the social capital he generates. He’s capable of shifting the market with one tweet.
Considering America’s wealth gap is worse than before the Great Depression, it’s important to maintain perspective — Musk is the person who set the ambitious company goals in the first place and he gets to (rarely) go home to a $17 million Bel-Air mansion overlooking the country club. His lifestyle may not be relatable, but his exhausted, raw and emotional outpouring certainly is. Being overworked has severely impacted Musk’s quality of life in the past year, touching all aspects of his health, family and social life.
Stress doesn’t care about your salary
Musk’s behaviour illustrates that success does not make one immune to the mental toll of unrelenting pressure, high external expectations and a passionate desire to succeed. Musk, however, is immune to the suffocating stress of living paycheck to paycheck like 80% of Americans, and being one of the 18.5 million Americans living in poverty. In fact, the mental toll of poverty is “like losing an entire night of sleep” and while Musk’s past year has undoubtedly been taxing, that’s exactly it — a tough year. Most Americans in poverty juggle multiple minimum wage jobs throughout their lifetime and get no reprieve from the hardship.
If the wealthy CEO of Tesla is buckling under pressure, imagine the mental burden felt by minimum wage earners, only 0.1% of whom can afford a one-bedroom apartment. America’s staring down the barrel of a fast approaching income inequality powder keg.
The Markets Have Not Been Fair Since the 80s
America used to value its workers. For a period, those responsible for creating output received wage increases that reflected the country’s rising GDP and increasing productivity. This hayday of worker power from 1935–1980, parallelled a time of protective unions, assertive market regulations and antitrust laws that were enforced. During this time of explosive growth in America, 70% of all new income generated went directly into the pockets of those producing it: 90% of America. Today those proportions have been reversed and increased, while workers are grappling with unprecedented student loan debt, an insufficient minimum wage, rising inflation and cost of living increases.
The Minimum Wage Myth
Excuses and rationalizations continue to prevail for keeping the minimum wage low, when in fact, 78 years of minimum wage hikes have produced zero evidence of job killing. By comparison, since 2000, senators have increased their own pay seven times (a total of $32,700), while increasing the minimum wage only three times (a total of $2.10). Wages for the people who actually do the work have not risen proportionately with the strong markets, global economy, and low unemployment rate. The rising tide has failed to lift all boats, and the storm is on the horizon.
Big Hair, Neon Leg Warmers and Quiet Deregulation
The 80s kicked off of this reversal with an increase in lobbying on behalf of corporations and money interests; weakening regulation enforcement and rewriting the rules to tip the scales in their favor. Since then, the scales have been tipped so far that 84% of wealth from the stock market goes to 10% of the US population and 50% of Americans own zero shares in stock. Since a substantial portion of corporate worth is distributed to shareholders, that means money generated from the stock market on any given day will have zero effect on half of the American people.
Since 1980, worker power has eroded while the wealthiest Americans have steadily accumulated monstrous sums of capital, concentrated geographically in areas like Silicon Valley; the abundance spawning the creation of a new, hyper-affluent 0.1% class.
Siri, Set the Calendar Back to 2008
Americans will soon find themselves starring in a sequel to the 2008 Great Recession, thanks to Big Banks’ current abuse of a Dodd-Frank loophole coupled with snowballing defaults on the debt horizon: consumer, student, credit-card, and corporate. Teetering on the brink of an imminent recession, many Americans will be plunged deeper into financial crisis, while taxpayers remain on the hook to pay for the next bank bailout. Considering that 1 in 3 Americans have still not recovered from the 2008 recession, it’s time to change the narrative.
The JOBS Act is the Antidote
Elon Musk is able to harness his social impact on Twitter to influence the market, and American workers can harnessing their buying power in the market using regulation crowdfunding. Throwing support behind shared ideas and values builds communities that increase in power with each small investment. Social impact investing through Reg. CF diverts funds from the wealthy enclaves of immense income inequality, redistributing the capital and opportunities among deserving communities. More unaccredited, everyday investors entering the crowdfunding space lends authority and creates real movements around shared values.
Investing With Social Impact
People strive to mold the world in a certain way, such as preferred neighbourhood grocery stores or restaurants. This influence increases with resources, but it’s possible to transfer it from venture capitalists, Wall Street and fund managers who decide based on profitability metrics, what exists in each neighbourhood. Investing in the stock market is a way to vote with one’s money, but until 2016, that opportunity has remained out of reach for half of the country. Thanks to Title III of the JOBS Act, regulation crowdfunding allows everyday Americans to have social impact by placing their money and support into the businesses they want in their communities.
It’s fitting that regulation crowdfunding, the solution for everyday unaccredited American investors to enter the market, also offers a solution to Elon Musk’s liquidity problem. Issuing security tokens, for example, is a legal avenue for Musk to gather the capital he needs to pursue taking Tesla private. A wealthy CEO with a liquidity issue and an American worker looking to get a foot on the investment ladder can both further their financial goals on a fair platform available to both parties.
The Price of Deregulation
Money has the power to sway regulations, which is why the pendulum of American financial rules have been systematically structured to favor the wealthy since the Reagan Administration. An unsustainable transfer of wealth has left America in dire financial straits and on the verge of another devastatin recession. Collectively, we have forgotten that American families had a higher standard of living and were better off financially when workers were in strong trade unions and the markets were fairly regulated with proper enforcement. The data from 1935–1980 doesn’t lie. Politicians do.