- Elon Musk has said he thinks the United States is likely in a recession that could last up to 18 months.
- The billionaire slammed the Biden administration for printing “a million more dollars than it has.”
- Musk made the comments during a technical conference in Miami on Monday.
Elon Musk said on Monday he believed the United States was in a
it will get worse.
The Tesla founder and CEO made the comment via video at All-In, a Miami tech conference hosted by the All-In podcast, where he said the recession could last anywhere from a year to 18 months.
“Recessions aren’t necessarily a bad thing. I’ve been through a few. And what tends to happen is if you have a boom that lasts too long, you get the wrong capital allocation. It’s starting to rain money on fools, basically,” Musk said at the conference.
When this situation “gets out of control”, the economy has a misallocation of human capital “where people do stupid and unnecessary things for their fellow human beings”, he continued.
Musk joked that an “economy enema” should eventually “clean the pipes.”
“And the kind of bullshit businesses go bankrupt, and the ones that make useful products thrive,” he said.
“And there’s definitely a lesson here that if you’re making a useful product and you have a business that makes sense: make sure you’re not running things too close to the edge from a capital,” Musk continued. “They have capital reserves to last through irrational times.”
Musk appeared to blame the recession on President Joe Biden and his administration.
“This administration, it doesn’t seem to be doing much,” Musk said. “The Trump administration, leaving Trump aside, there were a lot of people in the administration who were effective in getting things done.”
“The obvious reason for the inflation is that the government printed a million dollars more than it had. The government can’t just issue checks for excess income without there being inflation The velocity of money has remained constant,” Musk said.
“It’s not super complicated,” he added.
The billionaire has criticized the Biden administration in the past. Earlier this year, Musk called Biden “a wet sock puppet in human form.” He continually criticized the administration after the White House failed to invite Tesla to an electric vehicle summit and praised General Motors and Ford over Tesla.
“It’s hard to say what Biden is doing, to be totally candid,” Musk said Monday.
This isn’t the first time Musk has commented on a potential recession. In 2021, the CEO of Tesla said he believed the next recession would come within the next two years.
—Elon Musk (@elonmusk) December 30, 2021
Musk isn’t an economist, but neither is he the first high-profile individual to raise the idea that a recession might be looming. On Sunday, former Goldman Sachs CEO Lloyd Blankfein told CBS he thought there was a “very, very high” risk of a recession. In April, Deutsche Bank economists predicted the United States would enter a recession in 2023, citing inflation and higher interest rates.
Chairman Jerome Powell has spoken out against fears that the economy is heading for a slowdown after the Federal Reserve raised interest rates earlier this month. He told reporters there was no suggestion the economy was “near or vulnerable to a recession”. But on Thursday, Powell appeared to backtrack.
“Whether or not we can execute a soft landing may actually depend on factors beyond our control,” he said, noting that Russia’s attack on Ukraine and the problems supply chain issues could pose other challenges.