Energy Subsidies

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


Tesla S

Washington 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?