The messy world of Elon Musk

ICYMI: This celebrity gossip rag, The Wall Street Journal, reported that Musk had a brief affair with Nicole Shanahan, wife of Google co-founder Sergey Brin – who also happened to be Musk’s friend and had once given him half a million dollars when Tesla was on the ropes.

According to the Journal, this brief affair prompted Brin to file for divorce.

Musk called the report “total bs” in a tweet on Monday, adding, “I work crazy hours so there just isn’t much time for shenanigans.” (Although, I have to say, Elon, the existence of twins you allegedly fathered with a woman who works for you at Neuralink might suggest there is shenanigans time.)

We really don’t care who Musk decides to sleep with, but there’s a reason the WSJ (and the people behind this newsletter) think it’s important to put a critical spotlight on the most powerful humans and richest in the world.

As CEO of Tesla, the world’s most valuable automaker, Musk is the guy behind the wheel when it comes to the future of fully electric, self-driving cars. At the head of SpaceX, he launches real human beings into space and hopes to one day colonize Mars. Neuralink wants to develop an implantable computer chip for the human brain.

You can’t have ambitions on this scale without encountering character scrutiny. So far, this scrutiny has raised many questions about Musk’s conduct, even beyond his daily Twitter outbursts and occasional corporate raids.

  • Musk was accused of exposing himself to a SpaceX flight attendant, which he denied.
  • One of his children openly disowned him.
  • A former Tesla employee is suing the company, arguing that it fosters a climate of sexual harassment.
  • Tesla reportedly paid a company to monitor employee interactions on Facebook when some workers wanted to form a union.

LOWER RESULT

CEOs of publicly traded companies are public figures, and how they conduct their personal affairs provides insight into how they run their businesses.

According to WSJ, when Brin learned of Musk’s alleged betrayal, the Google co-founder told his advisers to sell all of his financial investments in Musk’s businesses. It is not known how much these investments amount to or if the sales have actually been made. But it’s exactly the kind of personal-professional collision that shareholders should be worried about.

NUMBER OF THE DAY: 350 MILLION DOLLARS

T-Mobile will pay $350 million to settle multiple class action lawsuits stemming from a data breach affecting tens of millions of people. In a proposed settlement announced Friday, T-Mobile also agreed to spend an additional $150 million on cybersecurity.

This 350 million dollars is a lot of money, but it will be divided between the lawyers and the approximately 77 million clients whose personal data has been hacked. This will probably translate to a few dollars per person. But in this economy, that’s something.

RECESSION VIBRES

In the not too distant future, countless books will be written about the economy of the era that I tentatively call the Stupid 20s.

Chapter 1: Covid.

Chapter 2: Supply Chains.

Chapter 3: Inflation.

Chapter 4: Recession (?)

Chapter 38: It’s 2027 and we can all breathe deeply now. All Hail President Beyoncé.

Either way, the thing is, things are really weird right now – economically, politically, culturally. But you’ve signed up for a business newsletter, so we’ll gloss over those last two topics and focus on our decidedly weird economy.

Here’s the deal: Even the world’s top economists are scratching their heads right now. Why do consumers spend so much money but say they are pessimistic? How can the labor market be so strong when production is falling? Are we in a recession, or are we heading into a recession, and honestly, how do we even define “recession” these days?

“If you’re not a little confused about the economy, you’re not paying attention,” tweeted Jason Furman, a former White House economic adviser.

In short: nobody knows what’s going on, mainly because the pandemic has upended not only the economy itself, but also the models that economists have spent decades developing to try to measure and report on, finally, everything.

In the absence of certainty, speculation runs wild. This has some experts fearing that we may end up dragging ourselves into a recession.

Hear me out: there’s a pretty solid theory that the more we talk about the R-word, the more likely we’ll end up finding one. It’s a bit like skiing down a mountain – the more you fear hitting a tree, the more likely you are to fall into it.

Even a casual newsreader – or Twitter or Instagram or TikTok – absorbs, consciously or not, worries about inflation and an impending recession. When this discomfort takes hold, it changes the way we spend. If we think runaway inflation is here to stay, we will lock in buying as soon as possible, which will translate into higher demand and therefore higher prices…and so on. If we think a recession is inevitable, it doesn’t matter whether it’s technically a recession or not. When the mood is off, the mood is off.

The White House is already trying to get ahead of potential bad news on the economic front this week, when the Commerce Department releases its initial report on second-quarter growth. In a blog post last week, officials sought to reinforce the idea that the definition of a recession is not as clear cut as one might think.

“While some argue that two consecutive quarters of real GDP decline constitutes a recession, that is neither the official definition nor how economists assess the state of the business cycle,” the White House wrote. “Instead, official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at data – including the labor market, consumer and business spending, production industry and income.

Translation: Even if the second quarter data shows another contraction, that does not automatically make it a recession. This is more than just a politically convenient fact for the Biden administration. In the United States, there is an obscure group of eight economists who are responsible for declaring when we are in a recession. And as my colleague Nicole Goodkind wrote recently, this group of eight known as the Business Cycle Dating Committee — which sounds like the worst matchmaking app ever — sticks to a relatively loose definition that allows for wiggle room. : A recession, they write, “involves a significant decline in economic activity that extends throughout the economy and lasts for more than a few months.”

It’s the economist’s version of Judge Potter Stewart’s famous “I know it when I see it” test.

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