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What Bezos and Musk really want from Trump

It’s all about dominance in space

Robert Reich Oct 31

Friends,

Elon Musk (worth $271 billion) and Jeff Bezos (worth $262 billion) — the richest and second-richest people on the planet — are now showing America why it’s dangerous to have great wealth concentrated in so few hands.

In August 2013, Bezos purchased The Washington Post for $250 million. On Friday, just as the Post was preparing to endorse Vice President Kamala Harris for president, Bezos stopped the paper from doing so.

Partly as a result, the Post has already lost 250,000 subscribers, or 10 percent of its subscriber base.

In October 2022, Elon Musk purchased Twitter for $44 billon, turned it into X, and became its biggest user, with 202 million followers.

Musk has endorsed Trump — and weaponized the platform into a supporter of Trump, smeared Harris, and amplified rumors and conspiracy theories.

Independent analysts such as Edison Research said in March that X’s usage in the United States dropped 30 percent since last year. Fidelity this month estimated that X’s value has plunged by about 80 percent since Musk’s takeover.

Why have these two oligarchs been willing to take actions that cause so many of their customers to jump ship? What’s the connection between Bezos’s preventing the Post from endorsing Harris and Musk’s weaponizing X for Trump?

Here’s a hint:

Just hours after Bezos stopped the Post from endorsing Harris, executives of Blue Origin, Bezos’s private rocket company, met with Trump in Austin.

Although Blue Origin is running far behind Musk’s SpaceX, Bezos is the most likely serious challenger to Musk’s dominance in space because of his personal fortune and his billions of dollars in government contracts with NASA and the Department of Defense.

For years, Bezos has focused on beating Musk for the multibillion-dollar contracts to launch payloads and rockets. “Elon’s real superpower is getting government money,” Bezos said in 2016, according to the Post. “From now on, we go after everything that SpaceX bids on.”

Musk’s company appears so far ahead in the competition that it won a contract to rescue astronauts stuck at the International Space Station.

But that could change. Boeing and Lockheed Martin have been looking to unload their own joint-venture rocket company, United Launch Alliance (ULA), which has billions of dollars in government contracts, extensive infrastructure, and an experienced team.

Bezos’s Blue Origin is reportedly the favorite to take over ULA. Even the head of the U.S. Space Force’s purchases seems to be pushing for the two rocket companies to merge, telling an industry audience that “they need to scale” in order to meet an aggressive launch schedule.

ULA is still a major force in the space industry, competing for dozens of launches over the next four years, which can bring in billions more revenue. Combining with Blue Origin would make a lot of sense. The Wall Street Journal reports that Blue Origin has already submitted a bid to buy ULA.

If that’s the goal, Bezos’s biggest obstacle would be Trump, should Trump get back in the White House.

Trump has been out to get Bezos since 2017, when Trump first started blaming Bezos for poor coverage in The Washington Post — a grievance that has hurt Blue Origin.

In April 2019, then-Vice President Mike Pence’s chief of staff alerted Blue Origin officials to Bezos’s poor reputation in the White House, telling them that they have a “Washington Post problem.”

Trump also said he wanted to “screw Amazon” out of a $10 billion deal to provide cloud computing to the Pentagon, according to a memoir by his Defense Secretary James Mattis. (It’s since been reported that Oracle, led by Larry Ellison — Trump donor, Musk mentor, and Oracle founder, who ranks just behind Musk and Bezos as the third-richest person in America with an estimated $211.2 billion in wealth — had sought to sabotage the deal.)

So Bezos has been courting Trump. After Trump’s ear was grazed by a bullet during an attempted assassination at a July campaign rally, prompting a Musk endorsement of the former president, Bezos called Trump to say how impressed he was that the candidate had raised his fist after coming under fire, according to a person familiar with that conversation.

Soon after Trump formally secured the Republican nomination, Amazon CEO Andy Jassy phoned Trump, introducing himself and outlining the company’s plans for the future. The call concluded with Trump suggesting that the company cut a large check for his presidential efforts, according to two people familiar with the conversation who spoke on the condition of anonymity to recount the private discussion. Trump told Jassy that he was going to win the election and that Amazon should help him because it would be in the company’s best interests.

In this sense, then, both Bezos’s refusal to allow The Washington Post to endorse Harris and Musk’s weaponizing X for Trump can be seen as moves in a proxy war for dominance in government contracting of spaceflight, where the ultimate prize will be hundreds of billions if not trillions of dollars — thereby distending the fortunes of either Bezos or Musk.

But the casualty in this war is American democracy, for which neither Bezos nor Musk apparently has a scintilla of concern.

America is now in its second Gilded Age, in which a handful of supremely wealthy men are determining the nation’s future. We must not let them. Bezos should never have been able to purchase The Washington Post in the first place; his conflicting business interests should have prevented it.

Nor should Musk have been able to buy Twitter. Antitrust laws should have been used to break Twitter up, or the platform should be deemed a public utility.

Both Bezos and Musk are poster boys for the importance of a wealth tax, which must be enacted to prevent the grotesque accumulations of wealth that have allowed them to wield such extraordinary power.

When the smoke clears from this rancorous presidential campaign and Kamala Harris is president, she must rescue democracy from these and other oligarchs.

As the eminent jurist Louis Brandeis is reputed to have said near the end of America’s first Gilded Age, “America has a choice. We can have great wealth in the hands of a few, or we can have a democracy. But we cannot have both.”

No. Jeff Bezos cannot have a $10 billion bailout from taxpayers for his space hobby.

 

Today in America, the unfortunate reality is that the rich continue to get much richer while the working class is struggling to get by.

Oligarchy and massive income and wealth inequality are on the rise. The billionaire class has seen its wealth explode during the pandemic. Meanwhile, half of our people continue to live paycheck to paycheck and the high inflation rate is making life for the working class even more difficult.

Yet in the midst of all of the crises we currently face, Congress will likely be voting next week on a bill that provides tens of billions in corporate welfare to some of the most profitable corporations and wealthiest people on the planet. This bill provides $53 billion to the profitable microchip industry with no taxpayer protections and, if you can believe it, another $10 billion to Blue Origin, a space company owned by Jeff Bezos.

Amazon, which is owned by Bezos, is a company which, in a given year, pays nothing in federal income taxes after making billions in profits. And, by the way, in a given year Bezos has himself paid nothing in federal income taxes despite being worth nearly $200 billion.

Jeff Bezos has enough money to buy a $500 million yacht.

Jeff Bezos has enough money to buy a $23 million mansion with 25 bathrooms in Washington, D.C.

No. I do not think that the taxpayers of this country need to be providing a $10 billion bailout to Jeff Bezos to fuel his space hobby.

This upcoming legislation is related to an extremely important issue that is rarely discussed in the corporate media or on the floor of the U.S. Senate, and that is how we proceed with industrial policy in this country.

Now, let me be clear. I believe in industrial policy. And I believe that it makes sense, in certain circumstances, for the government and the private sector to work together to address a pressing need in America.

But industrial policy means cooperation between the government and the private sector. It does not mean the government providing massive amounts of corporate welfare to profitable corporations without getting anything in return.

In other words, will the United States government develop an industrial policy that benefits all of our society, or will we continue to have an industrial policy that benefits the wealthy and the powerful?

In 1968, Dr. Martin Luther King, Jr. said: “The problem is that we all too often have socialism for the rich and rugged free enterprise capitalism for the poor.” I am afraid what Dr. King said 54 years ago was accurate back then, and it is even more accurate today.

The ostensible purpose of this legislation is to increase microchip production in the United States. This is important for the economy and something I support. But we can do that without simply providing a blank check to the most profitable corporations in the country.

In terms of the microchip industry, the American people should know the truth.

We are talking about an industry that has shut down over 780 manufacturing plants in the United States and eliminated 150,000 American jobs over the last 20 years while moving most of its production overseas.

In other words, in order to make more profits, these companies shut down plants in America and hired cheap labor abroad. And now, believe it or not, these very same companies are in line to receive $53 billion in corporate welfare to undo the damage that they did.

I suspect five major semiconductor companies will likely receive the lion’s share of this taxpayer handout: Intel, Texas Instruments, Micron Technology, Global Foundries and Samsung.

These five companies made over $75 billion in profits last year.

The company that will likely benefit the most from this taxpayer assistance is Intel. I have nothing against Intel. I wish them well. But, let’s be clear. Intel is not a poor company. It is not going broke.

In 2021, Intel made nearly $20 billion in profits.

We’re talking about a company that had enough money to spend $14.2 billion during the pandemic, not on research and development, but on buying back its own stock to reward its executives and wealthy shareholders.

We’re talking about a company that could afford to give its CEO, Pat Gelsinger, a $116 million compensation package last year.

We’re talking about a company that could afford to spend over $100 million on lobbying and campaign contributions over the past 20 years.

Does it sound like this company, and the others, really need corporate welfare? I think not.

We hear a lot of talk in Washington, D.C., about the need to create public-private partnerships — and that all sounds very good. But when the government adopts an industrial policy that socializes all of the risk and privatizes all of the profits — whether it’s handing the microchip industry a $53 billion blank check or giving Jeff Bezos a $10 billion bailout to fly to the Moon — that’s not a partnership. That is corporate welfare. That is crony capitalism. And that must be opposed.

The American people are increasingly sick and tired of corporations making record-breaking profits, while they struggle to pay outrageously higher prices for gas, rent and food.

They are sick and tired of the high cost of prescription drugs, child care, housing and groceries.

They are sick and tired of CEOs making 350 times more than the average worker, while working families struggle.

They are sick and tired of the wealthiest people and most profitable corporations not paying their fair share of taxes.

They are sick and tired of a corrupt political system in which big money interests dominate not only the economic life of the country, but our political life as well.

I know it sounds like a radical idea but maybe, just maybe, our government should represent all of the people, and not just the well-connected few. Maybe we should pay attention to the needs of working families, and not just billionaires and large profitable corporations.

Let us go forward together. Let us continue to grow a movement based on solidarity and compassion, not on greed and divisiveness.

In solidarity,

Bernie

Bernie is organizing our movement across the country to create the kind of nation we know we can become. But the truth is that he cannot do it alone — it is going to require all of us.

Please make a $27 contribution to stand with Bernie in fighting for a government that works for ALL of us, not just the one percent.

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