Elon Musk, the CEO of Tesla and SpaceX, has publicly started his belief that inflation is largely attributable to government overspending, labelling it as “the vast majority of the problem.” He also pointed out that excessive regulation further complicates the situation, emphasising that the root cause lies with the government, not the private sector.
Covid-19 Cited as Major Example of Inflationary Impact
In a recent post on the social media platform X, Musk outlined his perspective on inflation, stating, “The rise in prices (inflation) is driven by government overspending, which inflates the money supply faster than the rate of goods and services output. That is the vast majority of the problem.” He highlighted the Covid-19 pandemic as a primary example of this phenomenon, noting how unprecedented government expenditures coincided with a significant drop in productivity caused by lockdowns.
Musk warned that excessive regulation exacerbates inflationary pressures by hindering the market’s ability to address unmet demands, citing the housing shortage in highly sought-after areas as a specific illustration. He minimised the impact of monopolistic practices among companies, suggesting they contribute minimally to inflation unless firms manage to sway industry regulators in their favour. Musk firmly concluded that the true origin of inflation is rooted in government policy rather than private sector actions, adding: “A government, not private sector, problem.”
Musk has shared his views on inflation in various instances. Back in June, he asserted that “the increase in money supply at a pace quicker than the production of goods and services leads to inflation. It’s not more complicated than that, in my opinion.” He has frequently expressed his concerns regarding excessive government spending, labelling it the fundamental cause of inflation, and remarked in September 2023: “Government overspending, which is the fundamental cause of inflation, has wrecked countless countries.” In October of the previous year, Musk emphasised that “mitigating inflation requires the government to stop elevating the money supply at a rate that exceeds the output of goods and services.”
Advertising Coalition Dissolves Following Lawsuit from X
In another matter, an influential advertising industry coalition announced it would dissolve after being sued by X, the social media company owned by Musk. The Global Alliance for Responsible Media (GARM), a nonprofit organization comprised of major advertisers under the World Federation of Advertisers, informed its members via email that it would cease operations just two days after Musk accused the group of organising a boycott against X. The lawsuit asserted that GARM violated antitrust laws through coordinated efforts to deter brands from advertising on Musk’s platform.
While the World Federation of Advertisers contested that GARM’s actions infringed upon legal stipulations, it indicated that GARM lacked the financial means to continue operations while engaged in legal disputes with X. Stephan Loerke, CEO of the World Federation of Advertisers, communicated to members that he was “confident that the outcome will demonstrate our full adherence to competition rules in all our activities,” but GARM would shut down immediately. The World Federation itself remains operational.
GARM Accused of Antitrust Violations in Court
The lawsuit filed in federal court in Texas by X alleges that GARM has orchestrated a conspiracy leading its members to “withhold billions of dollars in advertising revenue” following Musk’s purchase and rebranding of Twitter as X in 2022. Concerns arose over the platform’s compliance with established brand-safety standards after Musk took control.
GARM, created in 2019 to establish guidelines on issues like hate speech and brand safety, claimed voluntary membership from various agencies and included corporations such as Dell, BP, Electronic Arts, IKEA, Microsoft, and PepsiCo. A few of these members, specifically CVS Health, Unilever, Orsted, and Mars, were named as defendants in the lawsuit, having either reduced or ceased advertising shortly after Musk’s acquisition of Twitter. The lawsuit noted that 14 additional GARM members scaled back their advertising between November and December 2022.
Following Musk’s takeover, the company implemented changes that adversely affected quality control on the platform, including the dismissal of its trust and safety council and the removal of content moderation staff. This shift prompted many advertisers to express concerns over escalating hate speech and misinformation flourishing on the social media platform.
Musk’s comments at The New York Times DealBook Summit in November, where he audibly told advertisers to “go f**k themselves” while accusing companies of “blackmailing” him over ad deals, further strained relationships with advertisers. Musk attempted to soften this stance in June, but X’s lawsuit seeks damages and a permanent injunction against the World Federation of Advertisers, citing antitrust violations. Musk encouraged any companies experiencing systematic boycotts to file lawsuits, implying possible criminal liabilities for the group under the Racketeer Influenced and Corrupt Organizations Act.
“We tried being nice for two years and received nothing but empty words,” Musk added defiantly. “Now, it is war.”
Rumble Joins Legal Battle Against GARM
Accompanying X in this legal battle is Rumble, a right-wing video-sharing platform founded in 2013 by Chris Pavlovski, who criticised GARM as an “advertising cartel.” In response to GARM’s dissolution, Pavlovski remarked that “soon a cabal of advertisers and agencies will find out that they can’t arbitrarily engineer a boycott of Rumble & X,” posing questions regarding the allegations against them. Stay tuned for more updates on this evolving story on the Turkish NY Radio.
