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By Jody Godoy and Tom Hals
(Reuters) - Tesla Chief Executive Elon Musk will take the witness stand again on Monday, as he defends himself against fraud claims that he lied when he tweeted in 2018 that he had funding to take the electric carmaker private.
Millions of dollars are at stake as well as the reputation of Musk, whose personal stature is a central asset of the Tesla brand. The trial will test whether Musk's penchant for taking to Twitter to air his sometimes irreverent views misleads investors and damages the value of the company.
The case is a rare securities class action trial and the plaintiffs have already cleared high legal hurdles, with U.S. Judge Edward Chen ruling last year that Musk's post was untruthful and reckless. Shareholders claim they lost millions after Musk tweeted that he had "funding secured" to take Tesla private.
Musk on Friday called Twitter, which he bought in October, the most democratic way to communicate but said his tweets did not always affect Tesla stock the way he expects.
"Just because I tweet something does not mean people believe it or will act accordingly," Musk told the jury in San Francisco federal court.
The billionaire is expected on Monday to address why he insisted he had Saudi investor backing to take Tesla private, which never occurred, and whether he knowingly made a materially misleading statement with his tweet.
Some outside trial lawyers have said he appears to have a thin skin and can be needled. But Musk on Friday spoke softly and in a sometimes bemused manner, a contrast to his occasional combative testimony in past trials.
Musk described the difficulties the company went through around the time he sent the "funding secured" tweet.
He was asked about messages sent to him by Tesla investor Ron Baron, who urged him to stop using Twitter, but Musk said he didn't recall and received thousands of messages.
He discussed the challenges the company faced at the time, including bets by short-sellers that the stock would fall.
"A bunch of sharks on Wall Street wanted Tesla to die, very badly," he said.
Musk's attorney, Alex Spiro, told the jury in his opening statement Wednesday that Musk believed he had financing from Saudi backers and was taking steps to make the deal happen. Fearing leaks to the media, Musk tried to protect the "everyday shareholder" by sending the tweet, which contained "technical inaccuracies," Spiro said.
A jury of nine will decide whether the tweet artificially inflated Tesla's share price by playing up the status of funding for the deal, and if so, by how much.
The defendants include current and former Tesla directors, whom Spiro said had "pure" motives in their response to Musk's plan.
(Reporting by Jody Godoy and Tom Hals; Editing by Noeleen Walder, Peter Henderson and Daniel Wallis)
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Republicans need the political press to do a lot of bad journalism in order to carry out their strategy of forcing through devastating spending cuts by leveraging the prospect of a calamitous default on U.S. debt. They need political journalists to produce wishy-washy “both sides” coverage that hides the party’s ultimate culpability and shields it from blame. And the latest coverage from The New York Times shows that their plan may already be working.
It shouldn’t be difficult to acknowledge that Republicans will be the ones at fault if the U.S. breaches the statutory limit on federal borrowing in June. Members of Congress of both parties routinely voted for clean debt limit hikes during Donald Trump’s presidency, which also saw record debt increases. But with Joe Biden in the White House, GOP leaders startedsaying last fall that they would require significant spending cuts – including to Social Security and Medicare – alongside further debt limit increases if their party won the House.
After they gained a narrow majority, Rep. Kevin McCarthy (R-CA) reportedly pledged “to not raise the debt limit without major cuts” to secure the speakership. The party’s right-wing media allies are loudly cheering them on. House Republicans could, at any time, vote to prevent a global economic catastrophe, but they are refusing to do so unless Democrats give them something else they want.
And yet, here’s how the Timeshandled the GOP’s ransom demand in Friday’s The Morning newsletter:
The bad news: Democrats and Republicans are divided. House Republicans say they want to use a debt-limit increase — and the threat of default — as leverage to cut government spending. Top Democrats have likened the Republican stance to a hostage-taking situation. The sides can’t agree even on whether to negotiate.
Both sides, per the Times, apparently share the blame: The Republicans who are taking the global economy hostage, and the Democrats who are saying that Republicans are taking the global economy hostage rather than just paying their price.
That’s not the only such false equivalency in the piece. The Times put Republican hostage-taking when it controls a house of Congress and Democrats are in the White House alongside a protest vote Biden took as a senator in 2006, when Republicans controlled both houses of Congress and the White House. From the piece:
But that has changed over the past three decades. Republicans, in particular, have used the passage of bills increasing the limit as leverage to try to force spending cuts on Democratic administrations. Democrats, too, have used it as a political tool: In 2006, Joe Biden, then a senator, joined his Democratic colleagues in opposing a debt ceiling increase to protest the cost of tax cuts and the Iraq war.
The Times added:
A crucial ingredient in this brinkmanship is divided government. Raising the debt ceiling is less of a problem when the same party holds power in both chambers of Congress and the White House. But when the government is divided, it makes the current scenario possible: A Republican-controlled House threatens to block a debt-limit increase that Democrats who control the Senate and White House would like to pass.
But the problem isn’t divided government per se – Democratic Congresses have no issue raising the debt ceiling when a Republican is in the White House, as was the case in 2007-2008 and 2019-2020. The problem is that when the government is divided with Republicans in control of Congress and a Democrat in the White House, the Republicans engage in this reckless behavior.
If Republicans really want to slash spending – including for Social Security, Medicare, and Medicaid – that’s their right. There’s nothing preventing the party from spending the next two years talking about their plans in hopes of winning the White House and Senate and then executing them. Indeed, there’s nothing preventing them from spending the next two years talking about “critical race theory” and girls’ sports in hopes of winning the White House and Senate and then springing their plans on the public.
But they don’t seem interested in trying that, presumably for the same reason that unified Republican governments under Presidents Trump and George W. Bush didn’t lead to massive spending cuts – those cuts would be incredibly unpopular and would likely destroy the party’s political standing.
Instead, the GOP plan for cutting spending is to try to force the Democrats to agree to (maybe even propose) the cuts as the price to avert global economic catastrophe. That sounds insane when you write it out, so a big part of the strategy is trying to prevent the press from doing so. The party’s leaders and its propagandists are busy working the refs.
\u201cDemocrats:\n\n-Want to raise the debt ceiling \n-Refuse to cut spending \n-Use the media to blame Republicans\u201d— Rep. Jim Jordan (@Rep. Jim Jordan) 1674170558
\u201cPresident Biden will not negotiate w/Republicans on raising debt limit in June --rejecting the approach of President Obama when Biden's-then boss was facing the same situation. @thehill. Biden counting on legacy media providing covering fire for him is irresponsible gamesmanship\u201d— Hugh Hewitt (@Hugh Hewitt) 1674211313
There’s no good reason for journalists to do their dirty work.
Reprinted with permission from Media Matters.
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