- Elon Musk said he believes the US is probably in a recession that could last up to 18 months.
- The billionaire slammed the Biden Administration for printing “a zillion more dollars than it has.”
- Musk made the comments at a tech conference in Miami on Monday.
Elon Musk said on Monday that he believes the US is in a
that 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 are not necessarily a bad thing. I’ve been through a few of them. And what tends to happen is if you have a boom that goes on too long, you get a misallocation of capital. It starts raining 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 are doing things that are silly and not useful to their fellow human beings,” he continued.
Musk joked that an “economic enema” would eventually need to “clear out the pipes.”
“And sort of the bullshit companies go bankrupt, and the ones that are doing useful products are prosperous,” he said.
“And there’s certainly a lesson here that if one is making a useful product and has a company that makes sense: Make sure you’re not running things too close to the edge from a capital standpoint,” Musk continued. “They’ve got some 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 get a lot done,” Musk said. “The Trump administration, leaving Trump aside, there were a lot of people in the administration who were effective at getting things done.”
“The obvious reason for inflation is the government printed a zillion amount of more money than it had. The government can’t just issue checks for an excessive revenue without there being inflation. Velocity of money held constant,” Musk said.
“This is not, like, super complicated,” he added.
The billionaire has been critical of the Biden administration in the past. Earlier this year, Musk called Biden a “damp sock puppet in human form.” He has continually criticized the administration after the White House failed to invite Tesla to an EV summit and praised General Motors and Ford over Tesla.
“It’s hard to tell what Biden’s doing, to be totally frank,” Musk said on Monday.
It’s not the first time Musk has commented on a potential recession. In 2021, the Tesla CEO 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 he’s also not the first high-profile individual to raise the idea that a recession could be looming. On Sunday, former Goldman Sachs CEO Lloyd Blankfein told CBS that he believes there is a “very, very high” risk of a recession. In April, Deutsche Bank economists predicted the US would hit a recession in 2023, citing inflation and higher interest rates.
Chair Jerome Powell spoke out against concerns the economy could be headed for a downturn after the Federal Reserve raised interest rates earlier this month. He told reporters nothing suggests the economy is “close to or vulnerable to a recession.” But on Thursday, Powell appeared to backtrack.
“The question of whether we can execute a soft landing or not, may actually depend on factors that we don’t control,” he said, indicating Russia’s attack on Ukraine and ongoing supply-chain snarls could pose further issues.