Elon Musk Tells Twitter Followers A Recession is a Good Thing

Mandatory Credit: Photo by Patrick Pleul/AP/Shutterstock (12861811m)Elon Musk, Tesla CEO, attends the opening of the Tesla factory Berlin Brandenburg in Gruenheide, Germany, .
Patrick Pleul/AP/Shutterstock / Patrick Pleul/AP/Shutterstock

Elon Musk may be attempting to add “economist” to his list of many titles as he shared his views on the likelihood of a recession on Twitter — and why said recession could actually be good for the economy, ultimately.

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It started when Musk introduced a Twitter poll asking: “Who do you trust less? Real Question.” The choices were “politician” or “billionaire.” Politicians were winning (or losing, if you will) by a landslide of 76% to 24% with roughly 7 hours left in the poll on the afternoon of May 27.

The thread started a conversation about economics, discussion of taxing unrealized capital gains, and, finally, user @BLKMDL3 (Zack) asked, “Do you still think we’re approaching a recession?”

In his typically outspoken way, Musk replied, “Yes, but this is actually a good thing. It has been raining money on fools for too long. Some bankruptcies need to happen.”

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He elaborated, “Companies that are inherently negative cash flow (ie value destroyers) need to die, so that they stop consuming resources.”

Musk also took aim at the work-from-home culture sparked by the COVID-19 pandemic, tweeting, “[A]ll the Covid stay-at-home stuff has tricked people into thinking that you don’t actually need to work hard. Rude awakening inbound.”

At the All-In Summit in Miami Beach in mid-May, Musk made a similar comment about recessions, Newsweek reported. “What tends to happen is if you have a boom that goes on too long, you get a misallocation of capital.”

He said at the time that he’d been through a few recessions. He recently tweeted that, based on his past experience, a recession would last about 12 to 18 months.

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Although the U.S. GDP dropped in the first quarter, based on the Bureau of Economic Analysis report, economists remain divided on whether or not the U.S. will face — or is facing — a recession. A survey of economists told Bloomberg in May that the odds of the U.S. entering a recession is just 30%, up from 27.5% in April.

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However, asset management firm BlackRock said that the Fed risks triggering a recession if it raises interest rates too high, or too rapidly.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.
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