Crony Capitalism

Elon Musk, Crony Capitalist

The billionaire should spend his own money, not the taxpayers'.

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Elon Musk
Screenshot via Bloomberg

Creating something that people want is how one gets wealthy in a market economy. Sadly, there's another way to get rich. It's called cronyism, and it can make billions for the lucky businesses that get government support—whether their products are profitable or not. In the process, the taxpayers foot the bill.

Taxpayer insurance against unprofitability takes many forms, from loan guarantees to grants, which provide a no-lose scenario for beneficiaries. If the business is profitable, then the corporation makes massive profits. If the business goes bust, then the taxpayers take a hit. Either way, the crony capitalist wins.

Perhaps the most prominent case of cronyism in modern history is Elon Musk. A brilliant entrepreneur, Musk founded the online payment company X.com with profits he made off the sale of Zip2—another profitable company and the first online version of the Yellow Pages. X.com eventually merged with Confinity and became the wildly successful PayPal.

And there were many other successful ventures that made Musk into one of the most successful businessmen in the world. According to Forbes, Musk is worth $14.3 billion. Much of his wealth is the result of producing brilliant ideas, creating value for others and revolutionizing the way we do business.

More recently, however, Musk has used his wealth to invest in space travel, solar panels, and electric cars. There wasn't anything wrong with that until Musk dragged the government into it. Tesla Motors, SolarCity, and SpaceX—a few of his highest-profile projects—have relied heavily on government subsidies. According to a 2015 article in the Los Angeles Times, these three companies "together have benefited from an estimated $4.9 billion in government support." And though none of these projects is profitable on its own, Musk is making a mint.

Tesla secured nearly $1.3 billion in benefits from a variety of sources, including money from Nevada to set up a car battery factory, federal subsidies through the U.S. Department of Energy's Advanced Technology Vehicle Manufacturing program, and a number of federal and state tax breaks for the purchase of Tesla vehicles (such as the $7,500 federal tax credit and a $2,500 California rebate). Why would so much in government subsidies go to produce a car that only a few Americans can afford? The new Tesla Model S ranges from $80,000 to nearly $115,000 before tax credits and rebates.

SolarCity got over $300 million in federal grants and tax incentives, in addition to state and local subsidies meant to create an artificial demand for solar energy. In a funny twist, the company even moved in to old office space from Solyndra, the bankrupt crony solar panel company run by large donors to President Barack Obama's campaigns and subsidized by the infamous Department of Energy's 1705 loan program.

The Los Angeles Times shed some light on the state and federal cronyism involved in SpaceX: "On a smaller scale, SpaceX, Musk's rocket company, cut a deal for about $20 million in economic development subsidies from Texas to construct a launch facility there. (Separate from incentives, SpaceX has won more than $5.5 billion in government contracts from NASA and the U.S. Air Force.)" And why are the taxpayers subsidizing a company that specializes in commercial space travel when the United States has a hard enough time balancing a budget?

The SpaceX website says: "SpaceX designs, manufactures and launches advanced rockets and spacecraft. The company was founded in 2002 to revolutionize space technology, with the ultimate goal of enabling people to live on other planets." U.S. taxpayers shouldn't be on the hook for space travel and other ideas of private purpose that won't benefit many, if any, taxpayers.

Musk is a billionaire many times over. If he thinks colonizing other planets is a profitable idea, then he should put up his own money. The taxpayers shouldn't be forced along as passengers on his expensive and risky experiments.

Elon Musk made his fortune by inventing products commonly used by consumers every day. Now he has resorted to taking billions in government cash and subsidies to work on ideas that probably won't return a profit to the taxpayer. He's using his friendships in government, as well as some high-priced lobbyists, to keep the spigot of government money going his way. Though it has been profitable for him, Musk is a case study in cronyism and a shining example of a rich individual abusing his influence to make taxpayers pay for risky investments.

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250 responses to “Elon Musk, Crony Capitalist

  1. I think Elon Musk also invests in astro-turfers who get paid to monitor the internet and jump all over any comment boards where any criticism of Musk pops up. I’ll be waiting to see how many newly-registered commenters show up here today just to comment on this one lone post.

    1. Come to think of it, I remember back awhile ago that every time Reason posted an article calling out Musk for his bullshit, there was always one commenter in particular who’d storm in to defend him. Can’t remember the handle though. But it never showed up in any other threads.

      1. Weapon.

        1. There it is! Thank you, Skipster.

      2. You should see Tesla investment forums. The reaction to any criticism is quick and frightening.

        1. Well, yeah. It’s a car literally built for self righteous rich people.

          1. The best description I’ve heard yet is it’s ‘environmental indulgences for the wealthy.’

            1. Liberals seem awfully quiet about the subsidies rich people get for buying those things.

              1. Liberals have zero problems whatsoever with poor people subsidizing rich people, as long as the money is going to accomplish one of their policy goals. Renewable energy is a fantastic example.

              2. Anytime I’ve pointed it out, I get defensive replies that we have to subsidize it for the wealthy so the technology can eventually make it down to the middle class.

                I’m not sure how many $40k Model 3s the middle class will be buying. I’ll stick to my hydrocarbon burning Honda Civic.

                1. So progressives DO believe in “trickle down”, but only in regards to things they like? Color me shocked.

                2. Funny, I always thought that one advantage of letting the wealthy serve as early adopters was avoiding the need for subsidies.

    2. I think Elon Musk also invests in astro-turfers who get paid to monitor the internet and jump all over any comment boards where any criticism of Musk pops up.

      Also, while I don’t consider PayPal or Musk a flop by any means, the portrayal of the circumstances comes off as akin to saying ‘Steve Jobs created the wildly successful OSX’. The same sort of making it sound like Musk is a technical genius when he’s really more just plain old ‘eccentric/savvy businessman’. He’s very much indulged or benefitted from the IFLS movement the same way Neil Degrasse Tyson and Bill Nye have, IMO.

      1. Just because you get wildly rich doesn’t mean you are a genius. Some people who do so are but others just get lucky. They are in the right place at the right time with the right idea. A lot of the tech billionaires are more lucky than brilliant. If Musk hadn’t thought of paypal, someone else most certainly would have. The same is true of Zuckerberg and Facebook. Those two guys just happened to think of the idea at just the right time and place where it made them rich.

        I don’t begrudge them that of course. They made their money honestly, at least in the case of those two things, and they deserve it. But that doesn’t mean they are geniuses or anything but what they are.

        1. If Musk hadn’t thought of paypal,

          This is what I mean. Musk didn’t think of PayPal. Musk thought of using computers to do banking. Confinity did all the PayPal ecommerce/payment stuff. Musk decided to merge the two companies, ditch most of the work he and others did at X.com, and call the new company PayPal. Very much like Jobs ditching all the failed stuff he invented at Apple, buying the OS from NeXT, calling it OSX, and making Apple a big hit.

          1. He “invented” at Apple. Dammit.

          2. I don’t know as much about Musk. So I can’t comment on him. But I give Jobs a lot of credit. He may not have been a technical genius the way some are. But he had a real vision for Apple and knew how to get the best people and get the best out of them. Yeah, he ditched the failed stuff at Apple and bought other better stuff. To do that he had to be smart enough to know the other stuff was better and have the will to let go of the things he was doing. Not many people are able to do that.

          3. I would hardly call the original OS a “failure”. In its time it was very successful. But it got outdated and the hacks who were running Apple after they fired Jobs couldn’t figure out how to replace it. That’s when Jobs (who founded NeXT) came back.

            1. I still wonder what Apple would be like today if they had bought Jean-Louis Gass?e’s BeOS to replace the old MacOS instead of Jobs’s NeXT.

              1. Probably very different, considering that buying NeXT also bought them Jobs.

              2. I knew a few BeOS freaks in the late 90’s early 2K’s. I mean they were fanatics over it.

        2. Just because you get wildly rich doesn’t mean you are a genius.

          … Aren’t you a Trump guy? I’m glad to hear you say that being rich doesn’t make you a genius. I can’t tell you how many times I’ve had to repeat this to Trump supporters.

          1. Getting crazy rich doesn’t prove you are a genius. It doesn’t even prove you are smart. Many get rich by sheer luck, and it helps to start out with a millionaire dad as did Gates, Trump, JP Morgan, etc etc. Still, I believe Gates, Jobs, and E. Musk are *very* smart men each of whom played the system like a fiddle; my tender sensibilities are not offended if/when someone calls them geniuses.

            Calling Trump a genius is more of a stretch, but one should not doubt that he is intelligent, savvy, cunning, ruthless, and a very effective salesman. Even though he exaggerates his ability to negotiate (claiming to be the best on earth), I suspect he’s a better negotiator than several men elected US president.

            In 2016, politics is just a subspecies of sales & marketing. Trump is good at that game.

            1. If he could ever articulate a lucid point, I might be more inclined to agree with you. As it is, he’s a yammering buffoon who doesn’t even try to make sense.

              1. Genius marketing strategy that caters perfectly to the American public, right?

            2. Virtually all of Trump’s personal wealth was inherited. He hasn’t actually made very much money, for someone who’s supposed to be a great businessman. I’ll credit him with enough intelligence to avoid gambling with his own money; if he’d been spending his own money all these years, he’d be living in a cardboard box.

              I will admit he has a genius for self-promotion. His current position is pretty impressive for someone this fundamentally unlikable.

              Since his two greatest talents are self-promotion and spending other people’s money (often badly), I’m a little surprised he didn’t get into politics sooner. Seems like a natural fit for his talent set…

              1. I’d say Trump’s “genius for self-promotion” is actually pathology. He’s an extreme case of Narcissistic Personality Disorder, and NPDs are pathologically driven to self-aggrandize.

        3. Just because you get wildly rich doesn’t mean you are a genius.

          Or even sane. We’re talking about a guy who:

          1) Married a woman only to divorce her two years later, giving her $4.2 million in the settlement.

          2) Remarried her the next year after his personal net worth increased by ~$2.9 billion.

          3) Filed for divorce from her again the very next year, only to withdraw the petition seven months later.

          4) Is now divorcing her yet again, eight months after withdrawing his previous petition in order to “give the marriage another go”, spending six months of those eight months living apart from each other.

          At least he got a pre-nup, but will still be ponying up $16 million in cash and “other assets”.

          I’ll bet the 3rd time’s the charm though.

          1. “2) Remarried her the next year after his personal net worth increased by ~$2.9 billion.”

            This fact alone might point to him being a genius.

      2. He’s very much indulged or benefitted from the IFLS movement the same way Neil Degrasse Tyson and Bill Nye have, IMO.

        This X 1,000,000. He has BS in Physics, but that’s about it as far technical acumen.

        1. He’s the chief designer!!!!!

          1. +1 The Right Stuff

        2. I’m much more comfortable with designating Musk as being an “Engineering Visionary”.

          There’s so much more to designing (and nailing down the engineering details) – let alone building – of a functioning heavier than air vehicle that it’s nothing short of delusional to believe that the final realization of a complex design could result from the work of one man in their garage with some assistants.

          Real aeronautical/space engineering looks more like “Neville Shute” than “E.E. (Doc) Smith” and has done for decades.

      3. But he is a technical genius. More so than Steve Jobs. He designed the original Merlin engine for Falcon I and dis some highly technical parts of Paypal and a previous startup. None of that should distract from the part where he should ise his own money, although I’m not sure where government service contracts come in on the welfare scale. Tesla and SolarCity are definitely taxpayer funded.

        1. He designed the original Merlin engine

          No, he didn’t.

    3. You’re just saying that because you’re a hater. Musk is the only person capable of getting us to Mars. MARS FOREVER!!!!1!!!!!!

      1. Yeah, once nasa gives him the ntr he needs. Fucking stone age rockets.

        1. B-b-but… The Grasshopper! It’s totally going to revolutionize the launch industry! /sarc

          1. Actually that part is true assuming they can relight/relaunch in june. But that doesn’t get you to mars and using 2yr hohmann transfers ain’t gonna cut it. Answer? A whopping 1000sec isp ntr. Fucking neanderthals.

            1. We’ve got that weird microwave engine now. The one with that violates Newton’s Law of momentum conservation*

              *But does appear to work and does now have a theory that works with current physics and makes testable predictions about thrust versus chamber shape.

              1. The jury’s still out on that. I wouldn’t be surprised if the “effect” is due to superluminal neutrinos…

                1. I’ll have to see if I can find a reference, but I did see a credible summary of a paper by a reputable skeptic who had (a) reproduced the engine and measured an effect and (b) created a theoretical framework that didn’t violate any known laws of physics and predicted the direction of the thrust would be opposite if they changed the shape of the chamber in a certain way.
                  (B) is huge because it can easily be tested. If the predicted thrust vector is measured, we almost definitely have a thruster that needs no reaction mass.

                  1. I’m generally aware of the tests. I’m just skeptical that they were done correctly. There were similar claims of neutron production after pons and fleischmann but it didn’t hold up over time.

            2. And when they light that thing up, we announce our presence to every spacefaring society within 200 light years.

              Prepare to welcome our alien overlords.

              1. Hopefully in time to save us from Trump or Hillary.

                1. +1 check for pods

              2. What are the alien overlord’s policies on public subsidies for private companies??

    4. Musk is the new Jobs. It’s a total cult of personality.

    5. I’m not an “astro-turfer”. I’ve just created an account to rebut some of the idiot comments I’ve read, and also this article. I live in the UK, in the village where George Orwell is buried. I think for myself, thank you, Jerryskids.

      Let us see. I suppose 7 billion people burning fossil fuels is all a big lie? Or maybe it is not, but we do not believe that CO2 warms the atmosphere? Or makes the oceans acidic? Do we?

      Do we believe that the HUGE money in fossil fuels does not buy american politicians? Do we?

      Do we believe that making cars electric is a waste of time? That collecting free sun energy, and turning it into electricity is a waste of time? Do we?

      There appears to be a huge bunch of idiots who believe all this stuff. What are american brains made of? Fox TV components? Food made from fossil fuel? Is god supporting them? God only knows. I certainly don’t.

      1. ^ Like a pyromaniac in a field of strawmen.

        1. Nice analogy.

    6. Muskbot checking in.

      I got paid $5,000 for this comment.

      Just kidding, normally Reason.com comments sections are cancer, I just felt like finally responding to this one.

    7. I like Tesla, but I would like it a lot better without subsidizing the purchase of $100,000 cars. Also, the bullshit ‘carbon offset’ credits. He should sink or swim on his own dime.

  2. Not to whitewash Musk or cronyism generally, but what have he and his companies paid in taxes for the pleasure of serving customers?

    1. There he is, This Machine ^

      1. I mean, I’ve been on public assistance in my life. Does that make me a hypocrite for advocating against public assistance? Well, government is the biggest recipient of public assistance. In my lifetime I will pay far more in taxes than I’ll ever claw back in their dubious forms of assistance. The dollars I forfeit for Medicare and Social Security are terribly managed relative to what I’d earn investing on my own. I am also an unfortunate heir to decades of continuing meddling in markets, making college and healthcare expensive and jobs sparing. So I work under the table when I can, I itemize, and, yes, I take benefits when they’re offered.

        It doesn’t mean Musk isn’t a cronyist, nor that his business practices are admirable, any more than it means I’m heroic for taking back what’s mine.

        1. I guess ultimately my point is that demonizing Musk qua Musk is unhelpful. There’s money on the table; of course he’s taking it. He’s a symptom of a greater evil, but if it weren’t Musk it would be *googles Soylendra* Christian Gronet or some other political entrepreneur.

          1. I agree. I don’t blame him for using the system as it is. I do however get very annoyed at his fans who think he is somehow doing this honestly and on his own. He is not.

            1. That’s true. He’s just not unique in either regard.

              1. It’s not like he’s doing some of that loophole exploitation, after all.

                ‘cos that’s the WORST.

                1. Yeah, and we shouldn’t blame the politicians that set up the “loopholes”

                  “Politicians love to bitch about General Electric, but the means by which that firm habitually lowers its tax bills ? manufacturing credits, green-business credits, etc. ? aren’t “loopholes,” but rather are exactly the sort of things that Democrats go around giving speeches about creating while everybody in the crowd goes “rah-rah-rah-jobs.””

                  Kevin Williamson has a good take on this over at NRO – “Subsidies for Supercars”

                  And he has a GREAT piece on “Should Louis CK Be Arrested?”

              2. Not sure anyone ever said he was.

            2. I do however get very annoyed at his fans who think he is somehow doing this honestly and on his own.

              Of course, as implied above, his fans are the same “I fucking love science!” tardos who keep pictures of Neil Degrasse Tyson on their bathroom walls to masturbate to and/or get wet when Bill Nye talks about locking up climate change “deniers” so, consider the source.

              1. True. And God are the electric car geeks annoying. I would probably like Teslas if the fans of the car were not such smug douche bags.

                1. Spend some time on the Car&Driver; comment boards. Since the fitter Model 3 was unveiled, so many smug assholes pontificating about how the goddamn thing is so superior to everything else for ‘only $35k’. Which is a PROJECTED base price. For a car that won’t be out for 2-3 years (Which is really just vaporware at this point).

                  When they pop up, I beat them down hard and fast. Not going to let the get any traction and listen to their bullshit for the next few years.

            3. Is there some reason we should think he’s lying about his intentions? If I was interested in making a quick buck out of subsidies and pork, almost going broke on businesses all my friends thought were stupid pie-in-the-sky ideas isn’t how I would do it.

          2. If the government is foolish enough to give money away, he’d be stupid not to take it.

            He’s in the vainglory part of his life.

        2. Unlikely that you will pay more in than you take out from medicare and ss (and likely medicaid for your final long term assisted living).

          1. But that’s the thing: the influence is pervasive. Medical expenses are sky-high to a large degree because the feds are so fully in control of it. It’s all but nationalized; in the end, single payer will be an accounting transition. So dollars to dollars, you’re right, Medicare/aid is unsustainably profligate relative to its tax base. But it’s also the reason why it’s profligate. Same goes for vendor-financing college through loan guarantees.

            And my SS benefits aren’t just the dollars but the investment potential. I’m denied the proceeds of investing that money in my retirement: instead, I’m helping subsidize someone else’s retirement, with the promise that, maybe, some other schmuck will help subsidize mine.

            1. You probably *are* a net loser on ss without including the returns. But you’re a huge winner on medicare/aid. It’s not just a problem of higher costs due to 3rd party; the US is a hell of a lot more generous than our supposedly compassionate eurotard betters. They let grandma die. We keep her alive another month or two and spend a million bucks in the process.

              1. Yeah, I was trying to hedge around that.

                Imagine grandma were in control of her medical expenses, and those benefits could be passed to her heirs. Would she choose to have the hip replacement at 89 if she didn’t expect to live more than a few years anyway? Would the expensive chemo regimen in her 70s be worth as much as living out her last few years without the debilitating treatment if she’s on the hook for the cost? What choices would geriatrics make if they controlled the purse strings?

                1. Half the time it’s not grandma making the decision but children who don’t have to pay for it either. You could extend that to inheritance, i suppose.

                  But the real answer is grandma still won’t save because ppl like nick and vero just don’t have it in them to say reap what you sow.

              2. A lot of those problems can be solved by doing simple things, like starting an organ harvesting program to help thin out the progressive population.

      2. *peers quietly at commodious*

        Kidding, kidding. I think I’ve read enough of spittoon’s posts here to know he’s not a plant. The guy I’m thinking of would outright say that Musk’s companies weren’t receiving handouts, subsidies, or special favors.

    2. To rephrase the question: “What taxes have Musk’s companies collected from their customers to forward to government?” Companies don’t pay taxes. They are an added cost of doing business added to the pricing structure.

  3. Agree 100% about Tesla and the solar companies. SpaceX is a bit different: they are winning contracts to launch satellites, etc. Now you may argue the government shouldn’t be launching satellites, but Musk winning them over Boeing or Lockheed is probably less crony than the alternative.

    As to Jerry’s comment, I don’t know. I think Musk has a huge cult of personality following in a similar way that Jobs did. He’s seen as this brilliant engineer and designer, and people gloss over any negatives and take it personally when the guy they worship is impugned.

    1. Yeah this.

      Tesla and Solar are bad investments for the government and taxpayers but SpaceX is a different animal.

      I am certain that it has benefited from some crony largess at some point along the line but the amounts are tiny compared to what the average large company receives. Sure, wrong in theory but not enough to get upset about in the real world.

      The article also fails in that it does not mention the manner of the subsidy.

      A subsidy in the form of a low interest loan or grant is wrong, a subsidy in the form of a loan guarantee might or might not be illegitimate, it depends on how likely the company is to be profitable and how likely those loans are to be paid off. I mean yeah a company that gets a loan guarantee benefits from the lower interest rates than they otherwise would have recieved but if they actually repay the loan on time and no money leaves government coffers it is not clear that the taxpayers have been “robbed”.

      Finally there are subsidies that are tax breaks and tax offsets, these are complete legitimate on the part of the government because allowing that company to keep more of it’s money in no way transfers government largess to them.

      1. Yes it still costs taxpayers. That loan guarantee ensures a lower interest rate and is only made possoble by confiscating taxpyer money.

        1. No it doesn’t.

          A loan guarantee only threatens to possibly confiscate taxpayer money at some point in the future of the company is not able to pay the loan back on their own.

          If the company is successful and pays back the loan as agreed then no money ever leaves government coffers.

          Now if the government is ISSUING the loan as opposed to merely guaranteeing it that is a different case, but guaranteeing the loan to lower the interest rate costs nothing unless the loan is defaulted on.

          1. It creates a moral hazard by discounting the risk, just like manipulating interest rates does. It leads to misallocation of capital, bubbles, and worse overall economic results.

            1. correct

  4. Can we stop pretending that government involvement to artificially control the market and pick winners can totally be described as capitalism? Pretty please?

    It’s theft. We can go ahead and use the word, instead of pretending the “wrong flavor” of capitalism got us into this mess.

    /pet peeve

    1. Actually, I give them Veronique respect. For quite some time it was en vogue for Reason writers to use the word(s) crony capitalism when they meant straight up cronyism (or otherwise loosely).

      I have no problem calling some*one* a crony capitalist, especially if they aren’t an elected/appointed official. IDK that calling Musk a thief quite fits though, I don’t know that he did something illegal libertarian-wise. At least, I don’t see how you declare him libertarian-guilty without effectively criminalizing CEOs taking action in their shareholders best interest.

      1. This was definitely a reflexive foot-stomp I do every time I see that phrase. The article was very good, and de Rugy did sometimes separate the terms.

        It’s one of those things. Words mean something. We can hardly blame the millennials for thinking free markets are good but capitalism is somehow bad. It’s what we’ve been telling them for years.

        1. reflexive foot-stomp

          That’s your middle name.

          1. Tim Reflexive Foot-Stomp of Doom, who is a real hamster.

            Could be worse. Could be Eugene.

            1. Careful with that axe.

    2. I like to refer to it as “minipulism”, but it doesn’t seem to be catching on.

    3. I think you could argue that this IS capitalism, it’s just that instead of the capital coming from himself or willing investors, the source is pelf.

    4. “Capitalism” (a Marxist term implying rule by capital) should not be used to mean free enterprise. Clarence Carson pointed out that the USSR was the closest thing to “capitalist” that could be: the owners of capital ruled.

  5. “a rich individual abusing his influence to make taxpayers pay for risky investments” – No, the problem is not Musk. He’s just doing his job. The problem is the stupid voters who vote for the people who give him their money. They have only themselves to blame. It’s like blaming the ‘big banks’ for the financial crisis of 2008. No, it was a combination of the Mortgage Interest Tax Deduction, and Chartered Bond Ratings Agencies, and Fannie and Freddie and endless government backstops of loans to get people to buy homes against their better judgement. And of course, the people who defend these policies either as ‘necessary’ or ‘completely irrelevant’.

    1. Agree ^, AddictionMyth.

      Musk is just doing his job as entrepreneur. Government subsidies take many many forms, and the U.S. economy is rife with it.

      That said, anyone who thinks that the environment will do just fine without government intervention, is part of the problem.

    2. get people to buy homes against their better judgement

      I always remember what P J O’Rourke said wrt farm subsidies – given that people generally will do what’s in their best interests without being paid to do so, any time the government has to pay you to do something you can be sure they’re paying you to do something stupid.

  6. OT: I really hate “take your hellspawn to work day”. As if my job didn’t suck enough, now I get to work in a glorified day-care center. Woo-fucking-hoo.

    1. The US Coast Guard bars me from bringing my child to work as he doesn’t have a TWIC.

    2. As a porn actor of some repute, taking my kid “to work” would incur the wrath of Child Protective Services.

      1. Imagine MY situation.

        1. Before I do, lemme make sure I have some Clorox on hand.

        2. “Taking sombody else’s kid to work” day?

    3. My place must be corralling them all into a conference room – I barely noticed them at all.

    4. Yeah, my office is crawling with the little buggers today. Fortunately the company sets up stuff for them to do at times throughout the day. They haven’t really impacted me much.

      Ha! I was just about to say I never took my daughters to work when I realized. One of them works here. And at one time about 12 years ago, three of them worked here.

      1. Sweet, sweet nepotism ^_-

    5. Aw, but children are soooo cute. They brighten everywhere they go. Except for a few of them who’ve been abused & just tend to be cold. And a few others who are psychopaths.

  7. “Tesla secured nearly $1.3 billion in benefits from a variety of sources, including money from Nevada to set up a car battery factory…”

    H…Harry Reid?

    In all seriousness though, would we ever have reached space if not for Government intervention? Maybe, or maybe not, but I do need to admit that it wouldn’t have been likely to happen when it did without massive Government spending. It’s an uncomfortable admission to make, but it seems true at face value.

    1. Agreed. We put a man on the moon 45 years ago but today our grand ambition is to build a wall with Mexico. Sad.

      1. BUT WHAT IF THOSE WALLS COULD TALK?!

      2. And the only reason we did it was for bragging rights over the CCCP.

      3. At this point you would think it could be a force field.

    2. Did we need a man on the moon? As a thumb in the Soviets’ eye it may have been an important achievement, but what benefit, really, did it do the US? Putting satellites into orbit was as inevitable as the internet.

      1. Somebody had to keep an eye out for the moon Nazis.

        1. +1 Rocket Ship Galileo.

      2. Cost a hell of a lot less than the war on poverty. In the grand scheme of wasteful spending it’s ranked somewhere south of double digits.

      3. Did we need a man on the moon? No. Did the general populace benefit from the space program? Yes. Did that benefit equal the cost? Doubtful.

        Again, I’m just admitting that it probably wouldn’t have happened when it did without massive government spending. In this particular instance, I think it was a program sold to the people that the people thought was a decent expenditure. So in this one area in particular I still think it was a net boon to mankind. I also fully admit that this is an uncomfortable admission and is probably just because I personally think space travel, and investment in space, is a good idea in the long term regardless of it’s direct profitability in the short term.

        Calling satellites ‘inevitable’ is all well and good in hindsight, but was it really? I guess we’ll never really know, huh.

        1. And as a follow up, Sputnik was a satellite and it was launched by the Soviets first. So, again, not a ‘free market’ creation unfortunately.

        2. You are missing the unseen. That money was diverted away from a free market. Maybe we would have had cell phones and Internet by the 70’s if capital wasn’t being diverted to a dubious cause.

          1. In retrospect anything is possible but if it were true wouldn’t the United States have launched Sputnik first? After all, it’s undeniable we were far more free market than the Soviets.

            1. In retrospect anything is possible but if it were true wouldn’t the United States have launched Sputnik first? After all, it’s undeniable we were far more free market than the Soviets.

              I’m not sure you understand what a free market is and how it works. Everybody individually decides what they want and the market delivers after taking into consideration what everybody else wants in terms of having to compete for resources.The fact that a free market wouldn’t have led to a moon mission when it did is pretty good evidence that the moon mission wasn’t in fact worth it – if it were worth it the free market would have delivered it. If the free market didn’t deliver a moon mission it’s because that’s not what people wanted given that there were alternative uses for the resources. The Soviets got a satellite into space first precisely because they were not a free market and therefore didn’t have to act like they give a shit what people actually wanted. You can claim all you want that if Americans weren’t forced to chip in a few bucks for Apollo they just would have spent that money buying Doritos or something – but screw you, if they would rather have a bag of Doritos than help fund a moon mission that’s their prerogative and it’s not up to you to say they should be forced to prefer the latter to the former.

              1. I missed Florida’s point because I was confused with his example of a thing happening that actually did happen; and his use of it as proof of lost utility.

                I admitted that the space program was absolutely not a creation of the free market, so I agree with you. I still think it was a boon to mankind, but this is mostly just because it factually was a boon to mankind.

                Could it have been a bigger plus for mankind, perhaps at a later date? Obviously. Could it have resulted in the U.S.S.R. claiming space and/or the moon? Maybe. That’s in the realm of alternate history and science fiction though.

                Sorry my point wasn’t clearer. It probably still isn’t that clear. What were we talking about? Something musky? Muskrats? Muskets? Anon Musky?

                It’s definitely an ‘M’ word…
                *strokes absurdly square jaw, raises eyebrow*

          2. Oh, and as a random point they had cellphones in the 1970’s so…there is that. Somewhat ironically it was helped along by the space program.

          3. Also, the amount of regulation on phone systems back then.

    3. It would’ve taken longer if we hadn’t needed to build the V-bombs.

  8. There’s an ethical difference from accepting the subsidies & lobbying for them to remain / expand.

    It’s a matter of degree, but the former is more excusable than the latter.

    If Musk wasn’t receiving these benefits, would they just go to other projects? It’s not like they disappear of ethical people refuse to participate.

  9. I keep confusing this guy with ?on Flux.

    1. Never watched the cartoon, but that was a godawful movie.

      1. I remember the cartoon being pretty cool but the episodes weren’t long enough and there were too many breaks between segments.

        1. I remember watching it as a teenager – my first thought was “huh, so THIS is what it’s like to do drugs.”

          My second thought was “i hope my mom doesn’t walk in here while i’m watching this.”

          1. Because you were masturbating?

      2. Yup, the movie stunk. The cartoon was great but perplexing.

  10. Speaking of super-rich tech company owners, I heard something this morning about Zuckerberg. He wants to give away 99% of his Facebook stock so he can “cure diseases and improve education”.

    The whole ‘tech guru’ thing is beginning to get annoying. There’s a kind of creepy arrogance. Yes, Zuckerberg is super rich. Yes, he made billions by monetizing a “hot or not” list while he was in college. But Zuckerberg isn’t going to “cure” anything. I have no problem with his helping other people cure diseases by giving them money, but he needs to keep things in perspective.

    But all this prancing around on a TED talks stage in faded jeans and sandals with a head mic, dispensing “life advice” to rapt audiences is getting tiresome.

    1. Zuckerberg isn’t going to “cure” anything.

      He needs to team up with Biden.

    2. Meh, it’s hipster noblesse oblige. Let him have his fun.

      Is it harder not to get a TED talk than it is to get one?

      1. I accidentally gave three just this past month!

        1. Every time you walk into the wardrobe, you come out the other end with a headset mic?

          1. It’s spooky.

    3. This is how we see just how ‘genius’ people are.

      And where tech is concerned, you find they’re not geniuses per se.

      Just listen to their takes on whatever. Not that impressive really.

    4. all this prancing around on a TED talks stage in faded jeans and sandals with a head mic, dispensing “life advice” to rapt audiences is getting tiresome.

      You mean like this?

    5. Almost makes you respect Jobs for being a stingy bastard, doesn’t it.

  11. I quit my office job and now I am getting paid 69 Dollars hourly. How? I work-over internet! My old work was making me miseraable, so I was to try-something different. 1 years after…I can say my life is changed completely for the better! Check it out what i do…UI1

    ========== http://www.Report20.com

  12. I’m starting to wonder if this article is just a deflection from the re

    1. *real crony capitalists: the banksters who say, “Guarantee our loans or we’ll tank your economy.”

      1. Cuz that happens. It wasn’t the pols worried about reelection that bailed them out. I didn’t hear ONE FUCKING POLITICIAN say “let those fuckers live with the consequences of their decision”…
        And those “banksters” at Lehmen Brothers didn’t fare so well…

        1. No actually, Lehmann banksters did fine. Maybe they don’t have a company, but they still have the jets and the houses. Which would you prefer?

  13. Didn’t Tesla repay what it borrowed?

    1. Sorta, but they used a tax credit to pay back some of the loan and the rest was with investor capital.

  14. “Now he has resorted to taking billions in government cash and subsidies to work on ideas that probably won’t return a profit to the taxpayer.”

    I’m starting to think we should blame the politicians that set up and legislate the subsidies. It’s tough to blame a guy for being a rational actor and responding to incentives…

    1. Damn pigs, always running to eat the slops when the farmer dumps ’em in the trough!

      1. I don’t blame the pig for wanting to eat. I blame the poor shmuck watching whose dinner was just taken by the farmer and fed to the hogs…

        1. At least he’s giving his fair share of food, right?

    2. That’s like saying we should blame Bush and Frank for the financial crisis of 2008. Everyone knows it was the evil, greedy banks giving out mortgages to people they knew couldn’t afford them. And the fact that they were doing this on government money just makes it even more dastardly.

      1. No, in order, for the financial crisis of 2008, I blame:

        The Community Reinvestment Act under Carter
        Its renewed life and encouragement under Clinton
        Barney Frank’s abetting of these practices
        Fannie Mae and Freddie Mac

        Bush was trying to reform FM and FM and was stymied by Barney Frank who wanted to continue to “roll the dice”.

        1. Ages ago i worked at a law firm that did some work for Fannie and Freddie. The mission statement of both GSEs is, only slightly paraphrased, “to encourage lenders to provide mortgages to people who can’t afford mortgages.” Guess what happens when you do that?

          Yeah, fuck ’em.

        2. The post Civil War Reconstruction is also an example, as is the Marshall Plan in Europe after WWII and the cultural colonization of Japan and Arabia. Good ‘ol Yankee know-how and arrogance has a blow back. Ron Paul touched on this and it is central to the Lew Rockwell view of the world. Of course Texas would be ruled by the Comanche were this the proposition, but it’s still a serious POV to consider.

        3. If your list doesn’t include the Fed and only the Fed, it’s wrong.

  15. Though I largely agree, some balance here would be good.

    Musk has been amazingly altruistic with Tesla. He stated that his goal was to drive the implementation of EV’s (a good thing) and in that vein has opened up Tesla’s entire patent library for use by other manufacturers. And while the safest route to high profits would be to continue with high-end cars like the S & X, Tesla are instead rolling out the $35,000 Model 3 that Musk has stated will be followed by a car about half that price (presumably the rumored Model Y). Musk seems clearly driven by having a positive impact on society rather than just profits.

    As to subsidies, no business person worth a nickel would turn them down. The gov’t offered, he accepted. But his success is leading to the end as once Tesla delivers 200,000 cars (likely early 2018) the vehicle subsidies end. GM, Ford, Toyota, and others have only just begun to use theirs. Your angst should be focused purely on the politicians who produced the subsidies not on a business person who takes advantage of them. And more so on structuring it as 200k per manufacturer rather than perhaps the first 200k or 500k regardless of mfr.

    Isn’t SpaceX actually lowering the overall cost of US Gov’t launches? Even when all of the subsidies are included?

    1. Please justify your claim that the implementation of EV’s is “a good thing”.

      Please also explain why taxpayer subsidy of SpaceX in order to lower the overall cost of US Gov’t launches is necessarily beneficial *to the taxpayer*.

      1. Perhaps EV’s being good is a matter of opinion. They don’t rely on foreign oil, create less pollution (air, water, and noise), will be less expensive to operate, and will eliminate gas stations.

        We as taxpayers pay for both. If I can give someone $10 once (a subsidy) that will reduce a $100 monthly expenditure by $20 then that $10 was a very good investment.

        1. “Perhaps EV’s being good is a matter of opinion.”
          Yeah, you could say that.
          ————————————
          “They don’t rely on foreign oil,”
          Neither would IC-powered cars, if it weren’t for watermelons.
          ———————————–
          “create less pollution (air, water, and noise),”
          So long as you’re not near where the electricity is generated.
          ———————————–
          “will be less expensive to operate”
          So long as you get “free” charging from the taxpayers.
          ————————————
          “and will eliminate gas stations.”
          Wrong and so what besides.
          ————————————
          “We as taxpayers pay for both. If I can give someone $10 once (a subsidy) that will reduce a $100 monthly expenditure by $20 then that $10 was a very good investment.”
          And if pixie dust grew money on trees, we’d all be farting through silk!

      1. Musk hasn’t been shy about fun with S, 3, X, and Y. Nor about having an ‘insane’ mode, ‘ludicrous’ mode, predicted ‘plaid’ mode, nor various easter eggs like the recent Rainbow Road. Oh, and the stereo system goes up to 11. 🙂

    2. Musk seems clearly driven by having a positive impact on society rather than just profits.

      Your angst should be focused purely on the politicians who produced the subsidies not on a business person who takes advantage of them.

      This feels an awful lot like astroturf.

      1. Astroturf? Can you clue me in.

        1. ^
          Riiiiiiiiiight!

        2. astroturf in the Urban Dictionary.

          I’m a long-time, but not prolific, H&R commenter. Last summer I listened to a biography of Musk. I was especially intrigued by the part on Tesla. Before the book, I knew nothing — some kind of electric car, maybe? A few weeks later I ordered one.

          I’m not particularly green. I think Epstein’s The Moral Case for Fossil Fuels is persuasive. But I love my Tesla Model S.

          And I think that Musk is entirely sincere in his belief that EVs, solar power, and emigration to Mars are essential steps in saving humanity; and that he is, for lack of a more felicitous phrase, an “entrepreneurial genius.”

          I am quite disappointed, though, that I didn’t have any tax liability last year against which to take the $7,500 EV purchase tax credit.

          1. “And I think that Musk is entirely sincere in his belief that EVs, solar power, and emigration to Mars are essential steps in saving humanity; and that he is, for lack of a more felicitous phrase, an “entrepreneurial genius.”

            Not sure I’ll go for the last claim, but he seems to be quite sincere in finding ways to tap taxpayer money, regardless of his claims of benefiting mankind.

  16. Eh. Grants are a problem, but tax breaks I couldn’t care less about. If we ever move to a system that isn’t so idiotic and over complicated, maybe I’ll reconsider. But for now, tax breaks don’t count as subsidies in my mind.
    Screw corporate and income taxes. Federal sales tax is the way to go.

    1. If you could implement a Federal Sales tax (as opposed to a flat income tax) AFTER repealing the Federal Income Tax, I’ll kiss your ass on the crack. No, the pols will propose it, and then claim they will repeal the 16th Amendment AFTER it goes into effect.

      But then that repeal will never happen and then WE’LL HAVE A WHOLE NEW TAX!!!! YAY!!!

      1. We could put a line item in, designating piano wire, utility poles and woodchippers as sales tax exempt, along with other ‘essential items’.

      2. Politicians would hate a national sales tax without income taxes. The only way to buy votes is to lower tax rate, which leaves less in the public coffers to steal.

  17. One of these companies is not like the others.

    The Los Angeles Times shed some light on the state and federal cronyism involved in SpaceX: “On a smaller scale, SpaceX, Musk’s rocket company, cut a deal for about $20 million in economic development subsidies from Texas to construct a launch facility there. (Separate from incentives, SpaceX has won more than $5.5 billion in government contracts from NASA and the U.S. Air Force.)” And why are the taxpayers subsidizing a company that specializes in commercial space travel when the United States has a hard enough time balancing a budget?

    So… $0.02 billion in subsidies, from the state on Texas, not the United States. Meanwhile the company has sold more than $5.5 billion in launch services to the US government — and successfully delivered those services.

    It has also driven competitors to cut their prices.

    If [ULA’s CEO is] right, one day soon, ULA rocket launch costs could approach those offered by SpaceX.
    For the time being, though, the truth appears to be that ULA launches are not four times as expensive as SpaceX’s. They’re only twice as expensive.

    http://www.fool.com/investing/…..rcent.aspx

  18. Musk is an interesting cat.

    I love how in Muri Buri land, crony capitalism is a bad thing, unless it goes to companies making electric cars. But not the Big 3. Hip companies making electric cars.

    In Muri Buri land, unions are important. Unless the company makes hip electric cars.

    In Muri Buri land, tax breaks for the wealthy are bad. Unless they are buying hip electric cars.

    In Muri Buri land, electricity to charge the cars is provided by unicorn farts, not by oil, coal, or nuclear energy.

  19. I am not opposed to EVs. I suggested to my wife that we buy her a Nissan Leaf, since she works close by and mostly drives around town, so her Subaru ends up getting really shitty mileage. I do NOT trust them for longer commutes or road trips and would never buy a Tesla. I actually saw a Tesla re-charging van the other day and my first thought was that says a lot about Tesla and its not good. Also, the guys who I see driving them are the biggest douchebags-Nerds with small dicks.

    1. I drive a Tesla. How on earth did you know I have a small dick? It’s pretty embarrassing.

      What’s a Tesla re-charging van?

  20. I am not familiar with how Tesla and Solarcity work but I am familiar with SpaceX. There is a glaring error in this article. SpaceX did not receive $5.5 Billion in subsidies from the Federal Government. They have received contracts worth $5.5 Billion to provide goods and services to NASA. Services mainly involve transportation of goods and ultimately astronauts to the International Space Station. Recently they have won a Air Force launch contract. Orbital ATK and Boeing are among other companies that have won contracts from NASA under the same program.

    Calling this a subsidy is not true. If the Federal Govt. buys $1 Billion worth of computers from Dell, it does not in any way mean that Dell got a $1 Billion subsidy from the Federal Govt.

  21. Something was mentioned about astro-turfers who pop up on Musk threads.

    Now there are a lot of new names on here. Good call. h/t to Jerryskids

    1. I got a kick out of “amazingly altruistic”.

      1. Sorry I didn’t read all the way to the bottom sooner.

        1. Oh, man, this is entertaining. Look at ’em go!

  22. I admit upfront to being a fan of Elon Musks and being a follower of his work for about 10 years now. I do agree that his participation in cronyism is tiresome and irritating but agree with most commentators that he is more of a symptom than the disease. In his biography there are several chapters dedicated to when he invested much of his Paypal fortune into Tesla and had to borrow money from friends to pay the bills at a few low points in his life (I highly recommend the book whether you are a fan or not). Is he some kind of independent god? no. Does he benefit from a crony system? Yes. But to say he should invest all of his current earnings without looking into the fact that he has invested his fortune a few times over is not accurate. Should he be investing more of his own money instead of wasting the tax payers? Absolutely, in my mind that would give him the status many of his devout follows feel he has earned. I am more of a fan of his disruption to the auto markets, he is succeeding where Tucker failed and I enjoy watching it.

    1. I do agree that his participation in cronyism is tiresome and irritating but agree with most commentators* that he is more of a symptom than the disease. I

      By “most commenters” she means the legion of sockpuppets who just showed up?

      The rhetorical questions you arrange above aren’t in fact what the article alleges, or what critics have pointed out. What he does or doesn’t do with his own money is irrelevant. If he were only risking investor capital no one would knock him (or them).

      He’s not doing anything you’re claiming he’s doing (“disrupting the auto markets”). If he actually made a product that was able to compete with standard combustion vehicles at a similar cost, then i’d be full of praise for him. But he hasn’t. His company would have gone out of business 3times over already were it not for the billions in Govt subsidies he recieves… and *even then* his product is basically a glorified go-cart for rich faux-greenies that doesn’t compare favorably on any measure versus standard automobiles.

      1. Oh Gilmore, road magazines have called Model X (?) ‘the greatest car ever made’ and his accolades and sycophants act its designers are from Pininfarina and Zagato.

        THIS is an example of car design as art:

        http://www.effeffecars.com/

      2. “…If he actually made a product that was able to compete with standard combustion vehicles at a similar cost, then i’d be full of praise for him….”

        On a temperate day (no heater or AC), missing the Sacto traffic, and given steely nerves, it is possible to drive from the Bay area to Tahoe. Barely.
        But when was the last time anyone ran the ‘fuel’ down to zero?
        All for a taxpayer subsidized $100K!

  23. I admit I am an Elon Musk fan (and a Tesla Model S owner). I am also a huge Reason.com fan. But I think this article is unfair. I am going to ignore Solar City because I don’t know much about it. And I’m going to ignore Space X because they don’t receive subsidies, they win contracts (in fact their competitor ULA has a fat check from the government every year just to exist, even if they don’t do any launches).

    So let’s talk about Tesla. Yes he received some money, but he didn’t lobby for it to be available. If he didn’t take it then his competitors would. He also repaid it, which is more than many companies in this industry have done. Regarding the $7500 tax credit that buyers of his vehicles receive; again, he didn’t ask for that, and it is offered to all buyers of electric vehicles. Why wouldn’t he allow his customers to benefit from a tax credit? I don’t agree that the tax credit should exist (and he has even said that Tesla doesn’t need it) but I certainly took advantage of it when I bought my Tesla.

    Any incentives he received from Nevada for the Gigafactory are also legitimate. Why wouldn’t he allow states to bid for his business?

    In then end he took what was offered, repaid what was to be repaid, and has created tons of American jobs and fostered the electric car industry. You also have to remember that his competitors (gasoline vehicles) benefit from much more subsidies every year (given to the oil and gas industry and also ignored environmental impact).

    1. Search “fake tesla battery swaps”; wattsupwiththat points out that Musk isn’t just holding a bucket out in the money-storm.
      And lots of new names, all of whom just can’t see anything wrong with this brand of cronyism; strange, no?

      1. Happens every time. A bunch of so-called long-time Reason fans who only get riled up enough to comment on the Musk threads.

      2. Why Tesla is Committing Fraud

        The nut of it seems to be that the CARB handed them piles of credits under the assumption that their vehicles would meet the highest (whatever it is III? or IV) standards, when in fact they hadn’t even had the ability to demonstrate their products at that point.

        and when the so-called ‘battery swap’ ability materialized ex post facto, it was never actually validated.

        If the car can exchange batteries in 90 seconds, then it’s totally crushing the 15-minute requirement established by the California Air Resources Board. Notice that, even in this case, the 85KWh version still doesn’t meet the range requirement to be a Type V vehicle, as it’s rated by the EPA at 265 miles. So it would be stuck at 5 credits. It seems CARB bent the rules a little, or perhaps they concluded that the superb refuelling time “offset” a deficiency in range. In any case it’s no reason for alarm.

        What is a reason for alarm is that CARB gave Tesla these extra credits before any battery swap station had been built. In fact, it happened about nine months before the feature was publicly demonstrated (June 2013).

        And now they’re saying that this ‘demo’d’ ability is fake, but TSLA’s still milking credits

        never heard about this before, but it sounds par for course.

    2. I think the EV credits he sells to others helps keep them afloat

      1. “Last year Tesla made a roughly $150 million killing from selling ZEV credits. That’s up from $130 million in 2013, $32 million in 2012, and $3 million in 2011. All told in 2014 Tesla sold about $216 million in credits,” the newspaper said.”
        http://www.forbes.com/sites/ne…..e189e7f2b2

        Yes, you could say that.

  24. Tesla Motors, SolarCity, and SpaceX?a few of his highest-profile projects?have relied heavily on government subsidies. According to a 2015 article in the Los Angeles Times, these three companies “together have benefited from an estimated $4.9 billion in government support.”

    Speaking of SolarCity… I saw this breathless PR, and noted that TSLA and SolarCity do quite a bit of cross-sales between them

    e.g.


    Tesla Motors Inc (NASDAQ:TSLA) has been in partnership with its sister company SolarCity Corp
    (NASDAQ:SCTY) since 2013 and it appears that their collaboration is starting to bear juicy fruits. Earlier this month, Tesla said in its 14A document that it earned $8 million in revenue from the solar company last year and it expects over five-fold to $44 million this year.

    Green Tech Media (GTM) conducted a study* on the filing’s details and found that the electric vehicle (EV) company’s estimated sales to SolarCity will be 116MWh, which is 60% more than the entire US behind-the-meter energy storage market of 2015.

    (“conducted a study” = hacked together some agitprop for its benefactors)

    it just looks like the 2 companies are churning sales, unless i’m missing something; one promising limitless demand to the other.

    1. Tesla and its fans make all sorts of wild accusations as if they’re Bay City Rollers groupies.

      Like, being as big as Mercedes in a few years despite having barely a fraction of a fraction of GM’s revenues.

      But those PRE-ORDERS!

  25. Quite odd that the gist of this article is that Musk does not put his own capital at risk relies on subsidies.

    Does the author of this article not know that the fossil fuel industry receives massive subsidies, and carries no cost for cleaning up the environment?

    Moreover, regarding capital at risk; did the author not conduct decent due diligence before publishing?

    The Wall Street Journal published an article today about Musk using his own shares to secure loans as an additional way to raise capital. Musk said, “if I ask investors to put money in, then I feel morally I should put money in as well”, saying: “I should not ask people to eat from the fruit bowl if I have not myself been willing to eat from the fruit bowl.”

    I think jealousy makes you nasty.

    1. “Does the author of this article not know that the fossil fuel industry receives massive subsidies, and carries no cost for cleaning up the environment?”

      Do astro-turfers expect us to buy that happy horse-shit?
      Show me the ‘subsidies’; I’ll wait.
      And I’m sure you’re going to point out how Musk ‘remediates’ all the pollution caused by electricity generation, right?
      ————————————
      “The Wall Street Journal published an article today about Musk using his own shares to secure loans as an additional way to raise capital. Musk said, “if I ask investors to put money in, then I feel morally I should put money in as well”, saying: “I should not ask people to eat from the fruit bowl if I have not myself been willing to eat from the fruit bowl.”

      So
      .
      .
      .
      .
      what?

    2. “This Author” like de Rugy has never posted here before.

      We are all well aware that oil drillers get “subsidies” but these are often overplayed up by the left – these “massive subsidies” are mostly a quick depreciation schedule for large drilling equipment. It’s a childish “but they get subsidies too!” argument, the difference being that many of these green companies take the subsidies and then end up in bankruptcy after their corporate execs blow all the free cash.

      I think Musk is trying to build an honest and successful company with Tesla, but I still question whether or not the economics of it are going to work out in the long run.

    3. What fossil subsidies are those and how much? Carries no cost for cleaning up the environment…what? You do realize fossil fuel companies are producing products for others to use…they aren’t really the ones burning their product for the most part. What would cleaning up the environment consist of?

  26. I’m making $86 an hour working from home. I was shocked when my neighbour told me she was averaging $95 but I see how it works now. I feel so much freedom now that I’m my own boss. This is what I do,

    ——————— http://www.Profit80.com

    1. Are you making money posting positive comments for Hillary Clinton and/or Elon Musk?

  27. I didn’t know about SolarCity. I thought the whole point of Tesla and SpaceX was to show the profitability of these enterprises, if you have good design and good execution. I certainly thought Tesla and SpaceX were funded by Musk, and by investors Musk recruited. Turns out one of his main investors is the U. S. Treasury!

    Thanks for a good article. If Musk is a crony, you feel no one is safe from temptation, or from government’s blandishments.

  28. If a known powerful thief, a Don, offers you money to do A and you do A so you can get that money, have you done wrong?

    Is it wrong to be knowingly the recipient of stolen goods? I’d have to say that it actually is. So yes, I blame cronies for their cronyism even if it’s the correct move for their company.

  29. Don’t let the neckbeards on Reddit see this.

  30. It is not incumbent upon private enterprise to try and stay out of politics – they operate best through self-interested competition after all. It is therefore instead, incumbent upon politicians to not involve themselves in the markets – to not provide their services as an option for private enterprise to pursue at all.

  31. So I take it someone else should’ve gotten those contracts?

    It’s not as if Elon Musk were setting gov’t policy. Why make the article about him as the bad guy?

  32. I’d like to know what form the subsidies take. If it’s rebates on taxes, I’d be OK with that. I remember the time when research costs could be expensed. There was a lot more blue-sky research done (proportionately) then.

    1. “Last year Tesla made a roughly $150 million killing from selling ZEV credits. That’s up from $130 million in 2013, $32 million in 2012, and $3 million in 2011. All told in 2014 Tesla sold about $216 million in credits,” the newspaper said.”
      http://www.forbes.com/sites/ne…..e189e7f2b2

      There ya go!
      RTFC

      1. Not to mention the $7500 per vehicle tax credit or the fact that TSLA drivers don’t pay for the roads they drive on. What’s that, you say? They don’t pay gas tax, so they are literally free riders.

        What a guy. He gives and gives and gives…

        1. Dunno where you are, but in SF, there are “free” charging stations here and there, so it’s real ‘inexpensive’ to drive one.

          1. I’m in the socialist paradise. Plenty of Musktards around here.

  33. He’s doing what the wealthey and connected have always done; using his leverage with the government to further his pet projects. Maybe he’s greedy. Maybe he genunely believes that society will reap more benefit from electric cars and space exploration than they are willing to pay in fees. One of the reasons I am not a full-bore libertarian is the history of government backed (if not directly funded)projcts that paid huge societal dividends; rural electrification, rail networks, the internet….

    Be against his projects on the grounds that they are or are not worth the expenditure. Opposing them because “the government shouldn’t do that, even if it would work”converts nobody.

    1. “Be against his projects on the grounds that they are or are not worth the expenditure.”

      If they were ‘worth the expenditure’, he wouldn’t have to beg taxpayer money.

      1. I was about to post “Where’s Sevo ?”

        This article was written for you to comment on buddy ? =)

        I am just going to read your opinions on this. =)

        1. Do I know you?

  34. Sorry, you lost me at “new Model S”. It’s been sold since 2012.

  35. Once you get big enough and enter markets with other big players, you probably don’t have much of a choice other than engaging in crony capitalism.

    Musk is clearly a crony capitalist now, but among the many that deserve that label, I find he is one who uses his ill-gotten gains pretty well. As for space travel, I’d rather see the money go to Space X than to NASA. In fact, if he can contribute to killing NASA, it’s money well spent.

  36. Watch you, you’ll make Instapundit cry for mocking his favorite person in the world

  37. Dr.Rugy,

    In response to your article, its very saddening to see that state of affairs your generation has created. Quite apparent of this mess that GenX has created is your slow, archaic, and refreshing views. Obviously what you are lacking is desire for progression, for advancement, and for completion of the Global Goals For The Next-Generation What Elon is doing is in accordance with the completion of the Global Goals so thus every tax payer should be happy that money is going to him, those that buy Eco-friendly cars, support solar economies and solar energy and energy storage, and battery research. Your article is a waste of time, and obviously you haven’t done your research. The fossil fuel industry receives trillions in subsidies and support from the government. Why do you waste your time writing these types of articles, don’t you have better things to be doing with your PH.D like creating innovative solutions and inspiring the next-generation to become involved with making the world a better place filled with advanced architecture, beautifully designed social and political systems, and new insights in economics and resource management. I really hope that you don’t have any students, because its people like you, professors like you in our universities that have led to the downfall of the next-generation, no vision, no creativity, no insight, no optimism, and no desire to innovate life. What a great sadness,

    Dr.Pavel (23 years old, Senior Fellow at U.of Q.)

    1. Hahahahahahahhahah…..riiiiiiggggghhhhtttttt. What a heaping helping of weapons grade derp. Dr Pavel…..hahhahahahahahahahahahah.

    2. ” thus every tax payer should be happy that money is going to him, ”

      Fucking Jesus Christ crucified on a solar panel !!!!!

      “Dr.Pavel (23 years old, Senior Fellow at U.of Q.)”

      http://www.uq.edu.au/

      Chopper Reid Wept.

    3. “Dr.Pavel (23 years old, Senior Fellow at U.of Q.)

      Let’s presume you are a “Dr.” at 23; what in hell did you waste your time ‘studying’? It usually take many more years to achieve your level of stupidity.

    4. 23 years old, a PHD, and a “Senior” Fellow at a University (Those who can, do. Those who can’t teach)
      What this tells me is that you’ve acquired a wealth of knowledge before you’ve lived enough of life to have gained one scintilla of the common sense.that goes with maturity. It’s common for your situation to have induced delusions of grandeur.

  38. Ahh…the siren song of government subsidies! I’ve always admired Elon Musk, however he needs to be careful. We all know what happens when one starts getting government subsidies: the government’s going to want something in return. And it might just be something Mr. Musk may not want to give.

  39. Are you kidding me? You don’t accumulate wealth by spending your own money! You become a friggin billlionaire by spending other peoples money. Sheesh. What are you some sort of pull yourself up by your bootstraps rugged individualist or somethin?

    1. Sanjuro Tsubaki|4.28.16 @ 10:14PM|#
      “Are you kidding me? You don’t accumulate wealth by spending your own money! You become a friggin billlionaire by spending other peoples money.”

      Fine, if it is invested by choice. Screw you if it’s taxpayer money.

  40. As we discovered during the space program, the spinoff tech will benefit the entire world.

    If you imagine otherwise, turn off your computer.

    1. ImanAzol|4.29.16 @ 1:05AM|#
      “As we discovered during the space program, the spinoff tech will benefit the entire world.”
      Yeah, that Tang is really wonderful!

      “If you imagine otherwise, turn off your computer.”
      Uh, when did unproven, not to say stupid, assertions become arguments?

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  42. There seems to be some extraordinary degree of brainwashing in the good old US of A. I live in good old England. George Orwell is buried a couple of hundred yards away.

    Oil = money = buying influence in the media, in politics.
    Money, in the USA, is close to the be all and end all of everything.

    Therefore Musk is a BAD man. A bad bad bad man. Anything he says or does is bad. IT MUST BE. Because his brand of intelligence and hard work threatens the existing order. In an ABSOLUTE way. So OIL, and EVERYTHING connected with it, money, politics, finance, TV, media, must fight back, or DIE.

    Oil, coal, gas etc etc, has to go. Either we stop using it, or we use it all up. But it WILL go, one day.

    Do we have the collective intelligence to stop using it before we use it all up? What is the difference? Burning it all will be absolutely catastrophic. There are trillions of tons of methane hydates under the oceans and under the artic tundra that will evaporate if we let the temperature get hot enough – and then the planet will get 30 degrees F hotter very quickly indeed.

    DO YOU CARE enough to stop it?

    No.

    Why?

    Because your brains tell you not to.

    And why do your brains tell you?

    Any idea?

    Have you any idea how you have come to think the way you do?

    1. You need to find another place to preach your religion.

  43. Say whatever you want. What he’s doing is working a hell of a lot better than whatever you’ve been up to. Sitting around on the Internet writing puritanical articles about “cronyism” isn’t going to stop him.

  44. Yeah, scamming taxpayer money had BJT creaming his jeans.

  45. I’d like to suggest the term “crony corporatism” instead of “crony capitalism”. If a company depends on cronyism, it’s no practicing capitalism.

  46. Pretty sure if you get rid of government-backed business loans, that you’ll see a huge drop-off in new small businesses. At that point, only people that already have money will be able to start anything new, and why invest in an unproven local guy to do something when you can sponsor a proven chain instead?

    There’s lots of bad things to be said about “crony capitilism”, but the government propping up new businesses is a necessary evil if you don’t want cyberpunk style MegaCorps.

    1. “Pretty sure if you get rid of government-backed business loans, that you’ll see a huge drop-off in new small businesses. “

      Or they could just stop with all the regulations that make it so expensive and complicated to start a small business.

    2. EscherEnigma|4.29.16 @ 12:40PM|#
      “Pretty sure if you get rid of government-backed business loans, that you’ll see a huge drop-off in new small businesses.”

      As someone who has started two businesses, I’m absolutely sure you’re an ignoramus.
      Cite missing for your claim; I’ll wait.

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  48. I despise Musk

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  51. RE: Elon Musk, Crony Capitalist
    The billionaire should spend his own money, not the taxpayers’.

    What?
    Since when should a crony capitalist pay for something when the taxpayers’ money is so readily available?
    Everyone knows the taxpayers have more money than a billionaire.
    Besides, making a crony capitalist pay for something instead of the taxpayers sets a dangerous precedent.

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  58. In any game, the biggest winners are the ones who make the best use of the rules as they exist. Elon Musk has done that very creatively. He neither created nor campaigned in favor of any of the subsidies from the government. He has, however, created companies that made good use of those subsidies that already existed and has managed those companies so that they remained profitable and in business under the rules that others created.
    He fought AGAINST the cronyism in the space launch business in order to be able to contract for DOD and National Security launches, which previously were the exclusive & therefore much more expensive province of United Launch Alliance.
    Solar City has proven profitable under the same rules that allowed Solendra’s management to pocket buckets of taxpayer dollars without installing a single solar panel.
    As far as the subsidies for electric cars, TESLA has given taxpayers much more for the money than the token efforts from GM or Nissan.

    This is one of the most jaundiced excuses for journalism I’ve read in a while. Which political crony was it written to please?

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