Tesla Motors as an Example of Modern Progressive Trickle-Down Economics

Tesla STeslaWashington Post editorial writer Charles Lane has a nice takedown today of Tesla, the high-flying federally subsidized electric car company, as an example of "trickle-down" economics as practiced by modern-day progressives

Tesla’s corporate fate is ultimately less interesting than the fact that so many people, especially progressives, have become so deeply invested in it — politically and psychologically, if not financially.

Tesla epitomizes the mutation of modern American liberalism. Once an ideology whose central concern was the plight of lunch-bucket working stiffs and oppressed minorities, liberalism is increasingly about environmentalism and related “quality of life” issues...

This version of green capitalism might be justified if it delivered the public goods it promises. Tesla’s trickle-down business plan calls for sales of expensive early models to pave the way for an everyman electric vehicle later this decade.

But even if widely adopted, Teslas would have little impact on climate change as long as drivers have to charge their vehicles from a coal- and natural gas-fired U.S. electric grid. In May, JPMorgan Chase analysts calculated that the Model S’s annual fossil fuel “footprint” is bigger than that of a Honda Civic hybrid.

Nor is there a case for electric cars based on their contribution to U.S. energy security. Thanks to increased oil and natural gas production, United States imported only 40 percent of its oil in 2012, down from 60 percent in 2005, according to the Energy Department. That trend is projected to continue...

Of course, jobs — “green jobs” — are supposed to square the ideological circle for liberals, making taxpayer “investment” in Tesla and other environmentally friendly firms a “win-win” for plutocrats and proletarians.

Tesla employs 2,000 people at good wages. But others would have used the same resources to employ people, perhaps more than 2,000, if the government had not funneled them into Tesla — both directly through loans, emissions credits and tax breaks and indirectly by encouraging private investors to buy stock in a government-favored company.

Tesla’s market capitalization, more than $17 billion, represents not only a possible government-aided stock bubble but also a huge societal opportunity cost.

Tesla’s Model S is, no doubt, a cool car. Whether it serves any public purpose commensurate with the public resources it has absorbed is another question.

For now, all we know is that [Tesla founder] Elon Musk, backed by Wall Street and Washington, has built a very efficient machine for the upward distribution of wealth and income.

Can you spell C-R-O-N-Y C-A-P-I-T-A-L-I-S-M?

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  • R C Dean||

    In May, JPMorgan Chase analysts calculated that the Model S’s annual fossil fuel “footprint” is bigger than that of a Honda Civic hybrid.

    Which, in turn, probably has a footprint bigger than a VW or Audi diesel.

  • DaveSs||

    I suspect its probably about even actually with the edge to the hybrid when you factor in the other nasty things that come out of a diesel...even the clean ones.

    That said, those VAG diesels are modern engineering miracles.
    Happy I picked one up.

  • Austrian Anarchy||

    Just watched a several years old Top Gear episode on YouTube about this last night. Show opened with super cars racing on one gallon of fuel, which was fun.

    Then they ran a Prias against a BMW M3. The Prias ran flat out and the M3 followed. M3 won by 2 MPG.

  • Brett L||

    "Anyone, anyone? Voodoo economics."

    /Ben Stein

  • ||

    Where's your disclaimer Ron?

    E.g., I do not own Tesla stock, but I pay taxes that the government loans to Tesla.

  • ||

    Teslas would have little impact on climate change as long as drivers have to charge their vehicles from a coal- and natural gas-fired U.S. electric grid.

    Natural gas per unit of energy produces less Co2 then gasoline or diesel...something like half.

    If all cars produced half the amount of CO2 then they do now the impact on Co2 emissions would not be small.

    Of course Co2 does not drive climate change so I guess the above quote is accurate....though probably in not the way the author thinks it is.

  • Brett L||

    Any estimates on refining rare-earth minerals needed in battery packs versus traditional production?

  • R C Dean||

    Sure, but what's the transmission loss between the generator and the car's battery?

  • Bo Cara Esq.||

    -Once an ideology whose central concern was the plight of lunch-bucket working stiffs and oppressed minorities, liberalism is increasingly about environmentalism and related “quality of life” issues

    Well, it builds in California so I imagine their workers are unionized, so it has all bases covered.

    Did Tesla get 'money, money' from the feds or favorable loans? Wikipedia says the latter.

  • Sevo||

    "Well, it builds in California so I imagine their workers are unionized, so it has all bases covered."

    Amazingly, no:
    "UAW Wants Their Piece Of Tesla
    By Bertel Schmitt on May 23, 2010
    No, the UAW doesn’t want to invest into Tesla like Daimler, or, a few days ago, Toyota did. The UAW wants Tesla to go union, says Reuters."
    http://www.thetruthaboutcars.c.....-of-tesla/
    Musk made it clear that there wasn't gonna be a union involved and the politicos rolled over 'cause jobs and green.
    ---------------------
    "Did Tesla get 'money, money' from the feds or favorable loans? Wikipedia says the latter."
    Tough question. Tesla would be in the red if they weren't able to sell the 'green stamps' to other car mfgrs for $7.5K/car, not to mention the state and fed credits paid to the buyers.

  • R C Dean||

    Did Tesla get 'money, money' from the feds or favorable loans?

    Form over substance. A subsidized loan is still a subsidy worth actual cash money.

  • John||

    I have a friend who is an Obamabot and has a husband who is a particularly obnoxious and ignorant one. She test drove one of these things and raved about it on Facebook. I explained to her that while the instant torque of an electric motor is great, a battery operated car is not so great and that she should wait until someone figures out a way to easily extract pure hydrogen from sea water or coal or something and we can all have fuel cell cars.

    The husband then proceeded to make a complete clown of himself huffing and puffing about what an anti-science tea bagger I was. Yeah, these people are emotionally attached to this thing.

  • A Frayed Knot||

    Out of curiosity, what were your reasons behind your claim?

  • R C Dean||

    a battery operated car is not so great

    Because it catches fire, has limited range, takes forever to refuel . . . .

  • ||

    Because it catches fire

    err...

    You do know what hydroxy is right?

    http://www.youtube.com/watch?v=Y5rHDKKz0vo

    has limited range, takes forever to refuel

    Hydroxy has the same problem as natural gas in this regard. (Moving a gas from fuel station into a car is unsafe and because it is a gas is harder to store safely in a vehicle then liquid fuels. Yet even though natural gas is cheaper there are not many natural gas cars.

  • IDPNDNT||

    Eh, not anymore than a gasoline vehicle.

  • ||

    a battery operated car is not so great and that she should wait until someone figures out a way to easily extract pure hydrogen from sea water or coal or something and we can all have fuel cell cars.

    Hydroxy is pretty easy to make:

    http://www.youtube.com/watch?v=v_Gr-KCFlDA

    The problem is it is still more expensive then oil...You would need a massive subsidy just like the battery cars do....and they still would not sell....and you would still need electricity to make the hydroxy just like the batteries do.

    I don't know about tea party science...but fuel cells seem just as dead end as batteries do.

    Why do you think they are better?

  • entropy||

    Fuel cells basically are batteries.

    People pushing them as a power source instead of a power storage device are basically ignoramuses.

  • ||

    What is weird is why don't they just make a hydroxy combustion engine?

    Why even have the fuel cell?

  • John||

    I am pushing them as a power source not a power storage. But to run them you need hydrogen and that is harder to get than oil.

  • Greg F||

    But to run them you need hydrogen and that is harder to get than oil.

    It's not real hard to get hydrogen, you could make it at home. The problem is the energy required to make hydrogen is more than the energy contained in the hydrogen. Hydrogen is not an energy source, it is just a way to store energy.

  • John||

    What makes t hem better is that they can run off hydrogen like regular engines run off gas. So you don't have to charge them. You just fill up with hydrogen.

    The problem with battery operated cars is that it takes hours to charge the batteries.

  • Jquip||

    Uh yeh. 'Green capitalism' would be justified as capitalism, if it were capitalism. But 'green capitalism' is the sort of heroic garden building exercises the French nobles used to get themselves on about.

    Should the government subsidize Tesa? Or, dare I mention, NASA? Only to the degree that the poor should foot the bill for after dinner mints accessible to every that isn't them.

  • Sevo||

    For starters, the energy density of batteries sucks. So electric vehicles are a really neat idea for certain specific applications: city delivery vehicles, city commute vehicles,etc. Short distances, parked overnight with access to charging stations.
    But Elon couldn't sell those to his valley whiz-kid buds, so he designed a really nice car in a rotten application.
    Yes, you can now get a 'free' 150 mile charge at each of his 'supercharger' stations; 2 hours of travel, 30 minutes waiting time. How many lunches do you want in one day?

  • Sigivald||

    Tesla’s market capitalization, more than $17 billion, represents not only a possible government-aided stock bubble but also a huge societal opportunity cost.

    My only complaint here is that like many others, this is confusing Market Cap with actual investment in the company.

    Once shares are issued, their price has no direct effect on the company that issues them, except for the likely value of new stock issues.

    That market cap is arguably mostly "speculative" value (i.e. people buying because they think it'll go up more, not because they're sure the company's future value will match the price paid, or exceed it) - and if so, it's only a fluke that it's being wasted on Tesla rather than some other company.

    People chasing market fluctuations or getting in on a bubble to get out before it pops, well, their money wasn't going to be invested in something boringly productive and mundane.

  • Sevo||

    That's a good point. Similarly, the 'tremendous loss of value' when the RE bubble popped wasn't really a loss in value. It was a loss in *presumed* value; an owner was told his home was worth X and when the bubble burst, he was then told it was worth something less than X.

  • The Late P Brooks||

    Tesla’s Model S is, no doubt, a cool car golf cart.

    Whatever. My old Honda CRX got about fifty miles per gallon. With a twelve gallon tank, that's a range of a lot farther than I could ever sit in it at one stretch. Refuel and take a leak and fifteen minutes later, away you go.

    Wake me up when a Tesla or any other of those glorified golf carts can do that.

  • R C Dean||

    Those CRXs were great, great little cars.

  • Austrian Anarchy||

    Just watched Adam Carolla's Tesla review on his YouTube CarShow yesterday and it gets even better. Tesla is building free (to the user) car quick charging stations all over the place. How is that energy savings going to work when the consumer has no bill?

  • Tony||

    Once an ideology whose central concern was the plight of lunch-bucket working stiffs and oppressed minorities, liberalism is increasingly about environmentalism and related “quality of life” issues...

    All of which fall under the concept of increasing human well-being. Not sure what the preferred alternative to this is.

  • Greg F||

    All of which fall under the concept of increasing human well-being.

    The road to hell is paved with good intentions. Politicians, who probably couldn’t get through a high school physics class, are trying to subsidize technology into existence. The problem is, equally ignorant people like Tony cheer them on.

    Not sure what the preferred alternative to this is.

    The first thing to do when you find your self in a hole is to stop digging.

  • Tony||

    The road to idiocy is paved with cliches. Without expressing an opinion on the status quo of technology and energy subsidies, science and technological advancement move on, with more noble motives than mere market concerns, the only constraining factor being funding. Sometimes you just throw money at something. Want to go to the moon? Etc. We need to end polluting energy forever. It's a goal. It's necessary. It's understood by everyone with any awareness of the world. I'm for practical means--whatever works will work. Governments mobilizing their vast resources to accomplish the (species-protecting) goal is probably a necessary means.

  • ||

    Boy howdy how many unfounded assertions can you pack into one paragraph?

  • Greg F||

    Sometimes you just throw money at something. Want to go to the moon? Etc.


    This is where Tony and his fellow travelers ignorance of science and technology really goes off the rails. Going to the moon was an engineering challenge. The theory for doing so was already well established. Same with the Manhattan project. The theory was there, the project was application of the theory (engineering). The bottom line is that, in theory, both were possible.

    This is not true of batteries. There is no theory for batteries with orders of magnitude higher energy density to weight ratios then what we have today. We don’t even know in theory if it is possible.

    Pissing 100's of millions of dollars on something that doesn't have a solid theoretical foundation is just plain stupid. Tony, who is to stupid to understand this, is also to arrogant to keep his mouth shut on something he knows nothing about.

    Governments mobilizing their vast resources …


    Governments don’t have “vast resources”. Any resources they have they took from someone. One only has to look at the "vast resources" the old Soviet Union pissed away to realize large government initiatives are not very efficient.

  • Redmanfms||

    Governments mobilizing their vast resources...

    Their resources? THEIR resources?

    Fuck you, you piece of shit. Those resources were owned by other people and appropriated at the point of a gun.

    FUCK YOU

  • ||

    George Clooney not happy with Tesla Roadster he used to own.

    "I had a Tesla," Clooney told the magazine. "I was one of the first cats with a Tesla. I think I was, like, No. 5 on the list. But I'm telling you, I've been on the side of the road a while in that thing, and I said to them, ‘Look, guys, why am I always stuck on the side of the fucking road? Make it work, one way or another.' "
  • RightNut||

    "I was one of the first cats with a Tesla."

    I think that sentence perfectly encapsulates why I can't stand that man.

  • ||

    You're more of a dog person?

  • Redmanfms||

    It's his insufferable neo rat pack bullshit.

    He thinks he's the new Frank Sinatra.

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