Elon Musk has backed out of his Pledge

[Metaphorical]

73. Nailed it!

On Sunday, when Biden stepped down as candidate and endorsed Harris, one of my first thoughts was that Musk was going to close his checkbook, and that when he did, it'd be the start of a stampede away from the GOP by the billionaire donors.

If Trump is holding outside rallies, it means he can't afford indoor venues. The GOP convention was embarrassing in part because of how bare bones it looked. Yet the RNC had been claiming something on the order of $250 million in their war chest in the last couple of months. A little bit of reflection shed some light on the issue.

There are quite a few paper billionaires out there, but it's worth understanding that many of them are fairly heavily invested, and in general they are far more likely to borrow against their investments as collateral rather than actually liquidating the principle. Musk's big payday was to have been his compensation package from Tesla, but that's still not (as far as I'm aware) materialized, and the value of his holdings are way down from where they were at his peak. This means that while Musk is not hurting, $45 million a month (almost $250 million dollars in total) is a not insignificant amount of money even to a billionaire.

Musk was making an investment, and under Biden, that bet looked safe. Sunday - and Kamala Harris's adroit handling of it - changed the equation dramatically. Understand that Musk "acquired" Twitter primarily to influence both public opinion and the election, but he didn't actually pay all that much of his own money to do it. Instead, he bought up junk bonds and similar questions financial instruments to finance it, probably with stock as collateral, and if he doesn't get Twitter (excuse me, X) off the ground, he's significantly underwater. If Trump loses, that's only going to add to Musk's loss (especially since getting a loan for a somewhat dubious campaign contribution of that magnitude is likely VERY difficult, not to mention probably illegal if Trump DID lose.

This means that Musk's "contributions" were counted in total when they had simply been pledged. Musk walking away from a promise (which he has been known to do in the past) is moreover likely to cause others in that circle to follow suit, for much the same reason. Even if the RNC funds aren't being "repurposed" for Trump's legal fees (and I would be surprised if they weren't), the pledges are being vacated just as the campaign season really begins, leaving the RNC (also known as Trump, Inc.) broke for all intents and purposes.

I see a few things coming out of this. Campaign ads all up and down the chain on the RNC side are going to disappear by September. The MAGA devout are going to find that their signage and t-shirts have been mysteriously lost in the mail. The barrage of polls that have obvious biases are going to slow down to the more legitimate ones, and the cycle's going to accelerate.

Everyone wants to back a winner. No one wants to back a loser.