7 ms·

Can we wean Elon Musk off government support already?

33 points by towndrunk 9y ago

sp332 9y ago
Ugh, what a bad-faith argument. The whole reason government puts subsidies on things is to encourage those things. The article starts with the assumption that market distortion is always has a bad outcome, but it's going to have to back that up. It also assumes (at the end) that our representatives in Congress can't possibly really be representing us. The rebates and tax cuts are working as intended. For example, by paying $7,500 for a certain class of electric vehicle, we tip the balance for people considering buying a somewhat less expensive internal combustion car. Just by tipping the scales, we shift a significant fraction of the demand from IC to electric, which makes a huge difference in the market, and therefore capital investment in manufacturing. Just doing this for a few years gets us decades ahead of where we would be in terms of electric vehicle technology. Corruption is always possible but it's not a given. For an old rebuttal, Musk's "The House Always Wins" essay still applies. https://www.tesla.com/blog/house-always-wins https://www.tesla.com/blog/house-always-wins P.S. The tax credit already get phased out above 200,000 vehicles per manufacturer, so it's not going to apply to all 500,000 pre-orders (even assuming they all become sales). https://energy.gov/eere/electricvehicles/electric-vehicles-tax-credits-and-other-incentives https://energy.gov/eere/electricvehicles/electric-vehicles-t...
- merpnderp 9y ago
  I'm not saying the government subsidies are wrong, but a counter case might be what if the government subsidized scientifc GPU's at the turn of the century over gaming GPU's? Would gaming have grown as big as it is without modern GPU's targeted at gaming? Would we have gotten such cheap GPU compute power without the massive investment in gaming? Would the government subsidy have ended up hurting long term advancement in GPU's?
  - sp332 9y ago
    There's always a chance of unintended consequences. But of course doing nothing isn't always the right answer.
  - AbstractCache 9y ago
    Do you have any historical examples of where government subsidies were "wrong"? It might present a stronger argument than one based on a "what-if".
- brightball 9y ago
  Probably a better counter point would be for somebody to provide some examples where market distortion hasn't had a bad outcome.
  - knieveltech 9y ago
    How about some examples of "undistorted markets" resulting in unambiguously good outcomes first?
  - fnord123 9y ago
    Government regulations on cleanliness in restaurants completely destroyed the rat shit covered segment of the restaurant market and marginally increased the costs of running a restaurant.
  - CabSauce 9y ago
    The assumption that the car market is "free" and not distorted is is already a pretty silly idea. The largest reason for promoting electric vehicles is that the cost of pollution isn't taken into account within the market for internal combustion cars. There's already a substantial distortion. With all costs included, electric cars may already be "cheaper".
- JackFr 9y ago
  But consider that Elon Musk has recently come out vocally agains the subsidy. He feel's that rather than an electric car subsidy, carbon should be taxed and 'let the market decide'. https://twitter.com/elonmusk/status/338108608430632960 https://twitter.com/elonmusk/status/338108608430632960 That is what a bad faith argument looks like. Having taken the subsidy for years, as all of the other major car maker are starting to offer an electric model, he gets religion and wants the subsidy eliminated. That is, once it starts to benefit competitors more than Tesla, it's a market distortion. I don't begrudge him playing the game better than others, but don't pretend he's not playing the game.
  - sp332 9y ago
    There might even be a good argument against subsidies. But the article was not it.
wnevets 9y ago
Can we wean oil & farm companies off of government support first?
- fhood 9y ago
  Hey! I really like my cheap produce.
  - jetti 9y ago
    You'd still get it cheap it just wouldn't be US grown
  - wlesieutre 9y ago
    Cheap meat is more likely to take a hit if we cut farm subsidies; feed crops are the biggest beneficiary (mostly corn). The data on wikipedia[1] is from 2004, but I haven't heard of any major reforms since then. From greatest to least, subsidies went to: corn, cotton, wheat, rice, soybeans, dairy, peanuts, sugar, minor oilseeds, tobacco, wool and mohair, vegetable oil products, and honey. Anything else is in the remaining 2%. [1] https://en.wikipedia.org/wiki/Agricultural_subsidy#United_States https://en.wikipedia.org/wiki/Agricultural_subsidy#United_St... EDIT: Note that sugar and onward are individually <2% (smaller than the "anything else" bucket)
    - mcguire 9y ago
      Mohair?
  - devmunchies 9y ago
    Most of the government ag subsidies go towards meat, dairy, and corn. Gotta keep that bacon and high fructose corn syrup flowing into Americans, and corn flowing into the animals.
  - JackFr 9y ago
    You understand that subsidies create a price floor. Your produce would be cheaper in their absence.
fuckyourmom0003 9y ago
FUCK YOU
simplicio 9y ago
I mean, Plan A to achieve the same goals with regards to electric cars and solar without gov't subsidies was a cap-and-trade or carbon tax, but since the articles author's group helped shoot that possibility down, we're left with less market oriented, less elegant approaches, like direct gov't subsidies on companies that develop the necessary tech. I'd certainly be happy to go with the more free market oriented approaches, but that doesn't seem likely to be possible in the US in the near future.
norswap 9y ago
> As wide-ranging as these various entrepreneurial ventures may be, they all have one thing in common – not a single one of them would get funding in a competitive private capital market if it weren’t for massive (and I do mean massive) taxpayer-funded government subsidies. Correct, but that's a problem of the current incentive structure in the market (some would say it's a problem of capitalism... I wouldn't go that far). The government isn't tied to those incentives, and so can (and should) use its money to promote initiatives that have large expected payback in the long run.
jostmey 9y ago
Elon Musk has earned every tax payer dollar he has received. From what I can tell by reading the news, the man works himself and his companies insanely hard. Perhaps this argument could be made about any other organizations or institutions, but not Elon Musk and his companies
- turc1656 9y ago
  "Elon Musk has earned every tax payer dollar he has received." By definition you do not earn a handout. You merely conform to the requirements of receiving it, which he has. "Earn"? Definitely not the word to use for him. We're talking about money that he has taken from all taxpayers to fund the pursuit of his dreams. His dreams get funded because they are approved by the government. There are ~156 million adults employed full time. On average, this equates to ~$32 every single taxpayer has paid to Musk. If you are a higher earner, which I suspect is true of many here on HN, Musk has "earned" somewhere between $50 and $100 of your money.
- ryandvm 9y ago
  Blech. Enough with the breathless fanboyism. Isn't it a little odd that every one of Musk's ventures is either heavily subsidized or directly paid for with government dollars? It's the old Ross Perot playbook. There is no greater spendthrift and hence more profitable customer than the U.S. government. I think his companies are doing amazing technical work, but let's be honest, profit is absolutely priority number #1. Saint Musk isn't trying to kickstart an international colonization of Mars because it's a sensible Plan B (hint: it's not). I'm guessing the real motive is that it would involve more money than any project in the history of mankind.
jeffreportmill1 9y ago
Don't forget that the US military is a huge subsidy to the oil and gas industry and conventional auto industry. I'm sure Tesla would gladly do away with subsidies if Exxon/GM gave up theirs. In any case, I'll bet GM/Toyota have received more electric car subsidies than Tesla. Ridiculous article.
brianolson 9y ago
This is a misleading partisan hit piece. The R party has decided they don't like Musk and this is part of their noise war. Some of the dollars are indeed shameful, but standard business practice that we need to shut down _everywhere_. If SpaceX is getting 'subsidy' dollars I'm sure it's not 1/4 as much as Boeing/Lockheed and the rest of the defense contractor crowd get. If Tesla factories are getting tax breaks that's because there's a nationwide race to the bottom with every local jurisdiction falling over themselves to give away breaks in hope of luring just this sort of thing. We need to stop that race to the bottom _everywhere_. And solar subsidies I'm for. F' CO2 emitters.
scottLobster 9y ago
Keep in mind the source: "Jenny Beth Martin (@JennyBethM) is president and co-founder of Tea Party Patriots." The Co-founder of the tea party patriots thinks any and all financial government support is bad? I'm shocked I tell you.
british_india 9y ago
The author is another scumbag Republican looking to shit on anything that helps the environment. Fuck you, Jenny Beth. I'm sure you're fine with fossil fuel exploration subsidies on the taxpayer's dime.
british_india 9y ago
The author is another Republican looking to dump on anything that helps the Environment. Jump in a lake, Jenny Beth. I'm sure you're a-okay with subsidies to Petroleum companies on the taxpayer's dime.
IshKebab 9y ago
This site has an actual popup advert.
TYPE_FASTER 9y ago
What a crappy article. Including SpaceX contracts as a subsidy? Seriously?
- turc1656 9y ago
  I am pretty sure they are not including the contacts. They are only including the subsidies. As far as contracts go, SpaceX landed deals totaling more than 5.5 billion from the US Air Force and NASA alone.

33 points by towndrunk 9y ago

Ugh, what a bad-faith argument. The whole reason government puts subsidies on things is to encourage those things. The article starts with the assumption that market distortion is always has a bad outcome, but it's going to have to back that up. It also assumes (at the end) that our representatives in Congress can't possibly really be representing us. The rebates and tax cuts are working as intended. For example, by paying $7,500 for a certain class of electric vehicle, we tip the balance for people considering buying a somewhat less expensive internal combustion car. Just by tipping the scales, we shift a significant fraction of the demand from IC to electric, which makes a huge difference in the market, and therefore capital investment in manufacturing. Just doing this for a few years gets us decades ahead of where we would be in terms of electric vehicle technology. Corruption is always possible but it's not a given. For an old rebuttal, Musk's "The House Always Wins" essay still applies. https://www.tesla.com/blog/house-always-wins https://www.tesla.com/blog/house-always-wins P.S. The tax credit already get phased out above 200,000 vehicles per manufacturer, so it's not going to apply to all 500,000 pre-orders (even assuming they all become sales). https://energy.gov/eere/electricvehicles/electric-vehicles-tax-credits-and-other-incentives https://energy.gov/eere/electricvehicles/electric-vehicles-t...

merpnderp 9y ago
I'm not saying the government subsidies are wrong, but a counter case might be what if the government subsidized scientifc GPU's at the turn of the century over gaming GPU's? Would gaming have grown as big as it is without modern GPU's targeted at gaming? Would we have gotten such cheap GPU compute power without the massive investment in gaming? Would the government subsidy have ended up hurting long term advancement in GPU's?
- sp332 9y ago
  There's always a chance of unintended consequences. But of course doing nothing isn't always the right answer.
- AbstractCache 9y ago
  Do you have any historical examples of where government subsidies were "wrong"? It might present a stronger argument than one based on a "what-if".
brightball 9y ago
Probably a better counter point would be for somebody to provide some examples where market distortion hasn't had a bad outcome.
- knieveltech 9y ago
  How about some examples of "undistorted markets" resulting in unambiguously good outcomes first?
- fnord123 9y ago
  Government regulations on cleanliness in restaurants completely destroyed the rat shit covered segment of the restaurant market and marginally increased the costs of running a restaurant.
- CabSauce 9y ago
  The assumption that the car market is "free" and not distorted is is already a pretty silly idea. The largest reason for promoting electric vehicles is that the cost of pollution isn't taken into account within the market for internal combustion cars. There's already a substantial distortion. With all costs included, electric cars may already be "cheaper".
JackFr 9y ago
But consider that Elon Musk has recently come out vocally agains the subsidy. He feel's that rather than an electric car subsidy, carbon should be taxed and 'let the market decide'. https://twitter.com/elonmusk/status/338108608430632960 https://twitter.com/elonmusk/status/338108608430632960 That is what a bad faith argument looks like. Having taken the subsidy for years, as all of the other major car maker are starting to offer an electric model, he gets religion and wants the subsidy eliminated. That is, once it starts to benefit competitors more than Tesla, it's a market distortion. I don't begrudge him playing the game better than others, but don't pretend he's not playing the game.
- sp332 9y ago
  There might even be a good argument against subsidies. But the article was not it.

wnevets 9y ago

Can we wean oil & farm companies off of government support first?

fhood 9y ago
Hey! I really like my cheap produce.
- jetti 9y ago
  You'd still get it cheap it just wouldn't be US grown
- wlesieutre 9y ago
  Cheap meat is more likely to take a hit if we cut farm subsidies; feed crops are the biggest beneficiary (mostly corn). The data on wikipedia[1] is from 2004, but I haven't heard of any major reforms since then. From greatest to least, subsidies went to: corn, cotton, wheat, rice, soybeans, dairy, peanuts, sugar, minor oilseeds, tobacco, wool and mohair, vegetable oil products, and honey. Anything else is in the remaining 2%. [1] https://en.wikipedia.org/wiki/Agricultural_subsidy#United_States https://en.wikipedia.org/wiki/Agricultural_subsidy#United_St... EDIT: Note that sugar and onward are individually <2% (smaller than the "anything else" bucket)
  - mcguire 9y ago
    Mohair?
- devmunchies 9y ago
  Most of the government ag subsidies go towards meat, dairy, and corn. Gotta keep that bacon and high fructose corn syrup flowing into Americans, and corn flowing into the animals.
- JackFr 9y ago
  You understand that subsidies create a price floor. Your produce would be cheaper in their absence.

fuckyourmom0003 9y ago

FUCK YOU

simplicio 9y ago

I mean, Plan A to achieve the same goals with regards to electric cars and solar without gov't subsidies was a cap-and-trade or carbon tax, but since the articles author's group helped shoot that possibility down, we're left with less market oriented, less elegant approaches, like direct gov't subsidies on companies that develop the necessary tech. I'd certainly be happy to go with the more free market oriented approaches, but that doesn't seem likely to be possible in the US in the near future.

norswap 9y ago

> As wide-ranging as these various entrepreneurial ventures may be, they all have one thing in common – not a single one of them would get funding in a competitive private capital market if it weren’t for massive (and I do mean massive) taxpayer-funded government subsidies. Correct, but that's a problem of the current incentive structure in the market (some would say it's a problem of capitalism... I wouldn't go that far). The government isn't tied to those incentives, and so can (and should) use its money to promote initiatives that have large expected payback in the long run.

jostmey 9y ago

Elon Musk has earned every tax payer dollar he has received. From what I can tell by reading the news, the man works himself and his companies insanely hard. Perhaps this argument could be made about any other organizations or institutions, but not Elon Musk and his companies

turc1656 9y ago
"Elon Musk has earned every tax payer dollar he has received." By definition you do not earn a handout. You merely conform to the requirements of receiving it, which he has. "Earn"? Definitely not the word to use for him. We're talking about money that he has taken from all taxpayers to fund the pursuit of his dreams. His dreams get funded because they are approved by the government. There are ~156 million adults employed full time. On average, this equates to ~$32 every single taxpayer has paid to Musk. If you are a higher earner, which I suspect is true of many here on HN, Musk has "earned" somewhere between $50 and $100 of your money.
ryandvm 9y ago
Blech. Enough with the breathless fanboyism. Isn't it a little odd that every one of Musk's ventures is either heavily subsidized or directly paid for with government dollars? It's the old Ross Perot playbook. There is no greater spendthrift and hence more profitable customer than the U.S. government. I think his companies are doing amazing technical work, but let's be honest, profit is absolutely priority number #1. Saint Musk isn't trying to kickstart an international colonization of Mars because it's a sensible Plan B (hint: it's not). I'm guessing the real motive is that it would involve more money than any project in the history of mankind.

jeffreportmill1 9y ago

Don't forget that the US military is a huge subsidy to the oil and gas industry and conventional auto industry. I'm sure Tesla would gladly do away with subsidies if Exxon/GM gave up theirs. In any case, I'll bet GM/Toyota have received more electric car subsidies than Tesla. Ridiculous article.

brianolson 9y ago

This is a misleading partisan hit piece. The R party has decided they don't like Musk and this is part of their noise war. Some of the dollars are indeed shameful, but standard business practice that we need to shut down _everywhere_. If SpaceX is getting 'subsidy' dollars I'm sure it's not 1/4 as much as Boeing/Lockheed and the rest of the defense contractor crowd get. If Tesla factories are getting tax breaks that's because there's a nationwide race to the bottom with every local jurisdiction falling over themselves to give away breaks in hope of luring just this sort of thing. We need to stop that race to the bottom _everywhere_. And solar subsidies I'm for. F' CO2 emitters.

scottLobster 9y ago

Keep in mind the source: "Jenny Beth Martin (@JennyBethM) is president and co-founder of Tea Party Patriots." The Co-founder of the tea party patriots thinks any and all financial government support is bad? I'm shocked I tell you.

british_india 9y ago

The author is another scumbag Republican looking to shit on anything that helps the environment. Fuck you, Jenny Beth. I'm sure you're fine with fossil fuel exploration subsidies on the taxpayer's dime.

british_india 9y ago

The author is another Republican looking to dump on anything that helps the Environment. Jump in a lake, Jenny Beth. I'm sure you're a-okay with subsidies to Petroleum companies on the taxpayer's dime.

IshKebab 9y ago

This site has an actual popup advert.

TYPE_FASTER 9y ago

What a crappy article. Including SpaceX contracts as a subsidy? Seriously?

turc1656 9y ago
I am pretty sure they are not including the contacts. They are only including the subsidies. As far as contracts go, SpaceX landed deals totaling more than 5.5 billion from the US Air Force and NASA alone.