What is Elon Musk doing in America's payments system?
My latest piece
My latest story, published online yesterday, is on this question (gift link here). I have been obsessively following what has come out of the Treasury’s Bureau of the Fiscal Service, since January 31st when David Lebryk, its head, suddenly retired, and I have spent most of the past week frantically working on this. Sadly I am not sure I fully answer the question, but I think I have got some of the way.
A fairly key point is that Musk et al are messing with a very complicated system that contains a lot of incredibly valuable, sensitive information. That we do not know exactly what they have been doing makes it more, not less scary. From the story:
Even if Mr Musk’s claims that he is blocking payments are nonsense, the system is vulnerable to accidents caused by tinkering. Programmes like these have been built up over decades, literally on top of 1960s “COBOL” mainframes, says Mikey Dickerson, a former head of the United States Digital Service. “No living person understands more than a small piece of it.” Small changes made without extensive testing can produce catastrophic errors.
The Treasury says Mr Musk’s team has been limited to “read-only” access. Yet Mr Musk says he is issuing instructions to others. These could impinge on several privacy laws. And the payment system could be used against political opponents in a devastating fashion, by cutting transfers to unfavoured organisations. There is only one real precedent for political appointees going into these sorts of federal systems, some older officials note. That was when Richard Nixon’s team used Internal Revenue Service records to work out how to target people on the president’s “enemies list”.
Reporting this, I went up to Fond Du Lac in Wisconsin, to see a social services provider, ADVOCAP, who have been frozen out of their normal funding for almost two weeks now. The actual connection to the shenanigans inside the Treasury is again, hopelessly unclear. But there do already appear to already be real world consequences to this tinkering.
One Carmageddon-related note. To get there, I rented an electric car—not, I should add, a Tesla, but a Mercedes Benz. The experience helped to clarify why Tesla was initially so successful at selling electric cars and others were not. Musk’s company got the consumer tech side right. The Mercedes was a lovely, comfortable car, and probably a lot better built than a Tesla. But what Teslas have and it did not is a built-in navigation system that works well and crucially, tells you where you can find a rapid-charger. Most chargers available are slow. Thanks to this oversight, my reporting trip took me a good while longer than it should have, as I struggled to work out where I could plug the car and get enough battery to drive back to Chicago. Of course, what would have been really lovely is if I could have taken a different sort of electric vehicle. That is, a train.