Billionaire Elon Musk's record-setting political spending this cycle looks almost trivial next to what one economist calculates the blue wave actually cost him.
Economist Justin Wolfers argued in his Platypus Economics newsletter on Thursday that the Democratic sweep of Congress sent Tesla and SpaceX shares tumbling on election night, knocking somewhere between $50 billion and $70 billion off Musk's personal fortune. Those losses dwarf the $474 million the billionaire spent backing Republicans in the midterms, more than any single donor has ever put into one cycle.
"It might just be a blip in Elon Musk's week," Wolfers wrote of the campaign cash.
By Wolfers' math, Tesla slid about 4% and SpaceX nearly 5% as results came in, while the broader market climbed. Given that Musk holds close to a fifth of Tesla and nearly half of SpaceX, that drop alone shaved roughly $54 billion from his net worth. "That's more than a hundred times what he spent on the entire election cycle," Wolfers noted.
Measured against how the two stocks would typically move on a rising market day, the hit grows to about $70 billion. Wolfers flagged that the SpaceX figure is shakier because the company only began trading publicly in June and swings wildly, but he called the Tesla result solid.
He contended the true stakes ran even higher. With prediction markets already giving Democrats roughly a three-in-four shot at a sweep when trading closed on Election Day, investors had baked in most of the bad news before a single vote was counted. Scaling up from election night's surprise, he reasoned that "Musk's wealth is likely a hundred — or hundreds — of billions lower under a Democratic Congress than a Republican one."
Wolfers pointed out that more than $200 million of Musk-backed money went toward electing Texas Attorney General Ken Paxton to the Senate, only for Democrat James Talarico to win by 12 points.
"Paxton was a terrible candidate. Texas is enormous. That makes it a terrible place to try to buy a Senate seat," Wolfers declared. By his rough estimate, a far smaller sum aimed at six close Senate races could have kept the chamber in Republican hands.
"The next billionaire may bet more, and may bet in more targeted and sophisticated ways," Wolfers cautioned. "If you think one man donating $474 million in one election cycle is a problem, my bet is that you ain't seen nothin' yet."