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> I always wonder how people say Musk is a failure with a straight face. If that's failure, I wonder what would be a success! Business is about improving the q

> I always wonder how people say Musk is a failure with a straight face. If that's failure, I wonder what would be a success! Business is about improving the quality of life of the consumer. Musk never went directly at that, he always involved himself in industries whose main customer is Government, or that would not exist without Government. Apple, Microsoft, Google, Walmart, JPM...those are real businesses, which would thrive even if Govt. expense were to plummet at 5% of GDP (actually they'd do much better). If Govt. expense were to plummet at 5% of GDP all the functional companies which Musk has would go belly up, not to mention the scam ones such as the NeuraLink and Boring.

bumby 4y ago
It's also worth mentioning that this effectively outsources much of the risk to the taxpayer. Because the govt is self-insured, there is no insurance needed to limit losses. This is particularly important in risky business ventures, like aerospace. I'm not saying that's a bad thing. The hybrid contractor/govt model has many upsides. SpaceX deserves a lot of credit for what they've done, but that context is important when gushing about when big gambles pay off. Those risks may never occur in a different paradigm.
- Bubble_Pop_22 4y ago
  Space is a big waste of money. At best it's a zero sum game playing field between countries. Regular people will never benefit from space. Commentators and pundits were fooled by GPS , Sat-TV and Internet and are extrapolating loads of quality of life which would come from space if only could be cheaper to send stuff up there. The world is increasingly urbanised. Fiber and 5G for telecomms will always be cheaper in an urban setting compared with sat-internet.
  - avmich 4y ago
    Are you saying people won't want to travel and won't need internet outside of cities? Space is already paying for itself.
- panick21_ 4y ago
  This is not really true. If SpaceX fails to perform, they don't get the money. They developed things like Falcon Heavy totally by themselves on spec. They pushed the government into fixed price contracts. If SpaceX had failed to do the human launch, the cost would have been on SpaceX. As it is right now on Boeing.
  - bumby 4y ago
    >If SpaceX had failed to do the human launch, the cost would have been on SpaceX. This is not how govt launches work. The payload (which is sometimes worth more than the rocket) is self-insured, meaning SpaceX is not responsible for eating that cost if it's lost. They are paid for the service (i.e., the ride) but have little to no cost regarding the cargo on govt launches.
    - panick21_ 4y ago
      This is true but that is the costumers responsibility if they want to insure their cargo or not. Whatever method or rocket design the govenrment uses this is always an issue. Just flying on a government provided rocket doesn't change that cargo is at risk of being lost because it is not insured. In this case the risk to the tax payer is always at risk, it has nothing to do with SpaceX as such or the method of rocket procurement. But the way the contracting model has been changed, the fact is, if SpaceX had not performed on their development and test campaign, they would have been stuck with the cost of most of that. Just as Being likely had to eat 600M+ because of their delays. So in terms of developing capabilities for the government to use, this was an incredibly low risk and cost effective one.
      - bumby 4y ago
        >This is true but that is the costumers responsibility if they want to insure their cargo or not. Yes, but this is somewhat missing the forest for the trees. The larger point is that relatively untested tech is going to be more expensive to insure because there is greater uncertainty. This makes it less economically viable until it proves itself to be reliable. Can a commercial company forego that and take on greater risk? Of course, but they aren't likely to because they are more risk-adverse for a variety of reasons. But because the govt is self-insured, the economic risk considerations related to that becomes a moot point. Meaning, the govt is in a unique position to take on risk to help an upstart like SpaceX. Note that 100% of Falcon Heavy contracts are govt (military/NASA). >Just as Being likely had to eat 600M+ because of their delays. But this is a different point. They are being penalized for contractual delays. This has the potential to increase risk because it incentivizes rushed development. We saw this with CST-100. The only reason it came to light is because the mission did not go as planned, and as a result NASA started to trigger additional oversight (which slows down development). This is part of why the CCP can move faster than NASA. They don't have to build to the same requirements as an in-house NASA build. To an extent, all NASA cares about is the ride. That works well as long as things go as planned. As soon as they don't, NASA will start doing engaging more oversight. This has already happened with SpaceX, too. When some unfavorable things came to light, NASA wanted more govt in-person inspections/audits.
chrisco255 4y ago
It's an odd strawman to focus on an arbitrary reduction in government spending, which is inherently part of the GDP calculation (C + G + I + NX, where G = government spending). For G to fall to 5% of the formula, some other variable would have to uptick, either Net Exports, Investments, or Consumption. It's hard to imagine a scenario where upticks in either of those 3 would not be beneficial to Tesla & SpaceX.
- Bubble_Pop_22 4y ago
  Tesla and SpaceX are political organizations basing their revenues off political trends Tesla: Climate change political trend SpaceX: Defense/National Pride political trend Organic exports, investments and consumption would not be benefiting such companies, the big winners would be the real bona fide and non-political companies I already mentioned: Apple, Microsoft, Exxon, JPM, Google, Amazon, Walmart. Meaning the stuff that people use daily as opposed to only reading about it in the tech and the financial press as aspirational goals after billions of dollars in subsidies and govt. contracts
  - terafo 4y ago
    You are plainly wrong. Out of 50 Falcon 9 launches this year only 3 had DoD payloads.
    - Bubble_Pop_22 4y ago
      > You are plainly wrong. Out of 50 Falcon 9 launches this year only 3 had DoD payloads. If it's not DoD then it's military stuff from allies or Turkey, if it's not that then it's Starlink. In any event the point still stands. This company only exists in the financial press and the tech press. Regular people aren't using SpaceX nor they ever will considering how the world is increasingly urbanised so sat-tv and sat-internet are dead on arrival matched against fiber and 5G. The only exception is maybe the yacht crowd but they aren't regular people.
      - avmich 4y ago
panick21_ 4y ago
This is flat out inaccurate. Tesla sells a tiny % to government and if you are still trying to argue credits, you are beyond out of touch. And among all serious rocket companies in the world its the least dependent and direct by government. Microsoft as made gigantic amount of money selling to government. So do large banks. GM and Ford have much larger better organized departments selling to the government. Amazon has huge contracts with DoD as well.
- Bubble_Pop_22 4y ago
  Tesla would not exist today if it wasn't for Government mandated climate panic. It's a company selling subsidised go-karts to rich people in California and New York due to the out-of-touch worries of neurotic politicians in D.C. , Glasgow, Davos and Paris. > Microsoft as made gigantic amount of money selling to government Microsoft , you mean the company almost dissolved by the DOJ? I will retract my statements on Tesla being propped by cronysm when Govt. produces even 1/100th of scrutiny endured by Microsoft. Who am I kidding? It will never happen...for the DOJ to go after a company it needs to have market share of 70% and upwards, whereas despite billions of dollars in subsidies and credits Tesla can't even make it to 1% of yearly global new car sales. 1% in 20 years. Ladies and gentlemen the backbone of the global industrial economy. Not. However that's how the cult leader...ehm I mean the CEO advertises it to the world. Great dominance in the Financial press, tech press and gossip press though. And surprisingly even on HN and reddit people have fallen for the scam.
  - panick21_ 4y ago
    So much nonsense and often repeated myths. So many basic mistakes. You should be embraced. > It's a company selling subsidised go-karts to rich people in California and New York due to the out-of-touch worries of neurotic politicians in D.C. , Glasgow, Davos and Paris. Wow tell us how you really feel, you must feel so superior. Of course its just unsubstantiated nonsense. So lets go threw some actual facts. Most vehicles Tesla sells are pretty close to avg new sale car price. So I guess you can call everybody that buys a new rich if you want but Tesla is not really spacial or unique in terms of selling to rich people. In terms of your 1%, they actually are more then 1%. 78 million are sold globally, Tesla this year will close to 1.5 million cars. Can you do the math? (And you can also do the numbers 12 month rolling if you don't want to include Q4 of this year). But don't let facts stop your rant. And if you want to look at it in terms of profit, Tesla is way larger fraction of the automotive market then that. And of course as far as your comment about how the press, the reality is Tesla profits this Quarter were higher then Ford and GM combined, close in profit to Toyota while having much better debt position and selling far fewer cars and models. And of course while still growing at incredible rates. Maybe just maybe that is why the financial press focuses on them more then many other companies. Go and search some historically comparable companies in terms of revenue and profit growth and tell me how Tesla is doing badly. > 1% in 20 years. Ladies and gentlemen the backbone of the global industrial economy. Not. However that's how the cult leader...ehm I mean the CEO advertises it to the world. Have you actually done literally any research on the topic ever? Tesla is one of the faster growing manufacturing companies in history and doing that while also interdicting a product that had not existed to any series degree in the market before. And Elon never said that Tesla is the 'backbone of global industrial economy' that just seems like something you made up. Please provide a source. > whereas despite billions of dollars in subsidies and credits In terms of subsidies Tesla got the same type of tax abatement's literally every large industrial player gets when making large. So if VW, Toyota or whoever had built a Gigafactory in Nevada they could have gotten the same kind of deal. This is just a reality of the way the system works. It doesn't give Tesla some magical advantage that they can exploit against other companies. Its just how the economy works, you can like it or hate it, but as a reason why Tesla is successful its absurdly terrible argument. And its also not cash they can just spend, its just a reduced expenditure over the next 20 years. So the idea that because of those subsidies Tesla got some competitive advantage is nonsense. Another thing people mention is the tax credits program. This is a program that only applied to 250k cars and again was available 10 years after Tesla was funded. Again this provides no competitive advantage to Tesla, ever car company could take advantage of that. And GM and other companies used these credits too. So again to claim that Tesla success can be explained by this mostly falls flat. The next and favorite thing people bring up is fuel credits. Fuel credits are system to reward companies that do good in terms of following regulations and punishes companies that are bad. This is not money from the government, this is money from car companies that pollute more then they are should. Again, these are the universal rules of the market. This rule was not designed for Tesla or with any intention of promoting Tesla. These are just the laws the car market operates under. We can have a discussion if fuel credits are the best policy tools for government to use. But fundamentally are you gone disagree with the concept that governments should have fuel standards give intensives to companies to do the right thing? Outside of climate crisis, local pollution alone make this a sensible policy. These fuel credits did net Tesla a few billion but do yourself a favor and go look threw Tesla financial history, you can exclude fuel credits income from its whole history. Then do some graphs on Tesla financials and their growth and margin curves. Then add the fuel credits, then compare the graphes. Anybody that claims that Tesla is only successful because of government action is just deluding themselves. Everybody who actually studied the financials of Tesla had figured out by 2014 that while Credits were nice little revenue boost, those that focused on credit were missing the woods because of the trees. > And surprisingly even on HN and reddit people have fallen for the scam. The scam of a company making 3+ billion $ a quarter at 15% operating margin. Yeah what a scam you must feel so smart.

bumby 4y ago

It's also worth mentioning that this effectively outsources much of the risk to the taxpayer. Because the govt is self-insured, there is no insurance needed to limit losses. This is particularly important in risky business ventures, like aerospace. I'm not saying that's a bad thing. The hybrid contractor/govt model has many upsides. SpaceX deserves a lot of credit for what they've done, but that context is important when gushing about when big gambles pay off. Those risks may never occur in a different paradigm.

Bubble_Pop_22 4y ago
Space is a big waste of money. At best it's a zero sum game playing field between countries. Regular people will never benefit from space. Commentators and pundits were fooled by GPS , Sat-TV and Internet and are extrapolating loads of quality of life which would come from space if only could be cheaper to send stuff up there. The world is increasingly urbanised. Fiber and 5G for telecomms will always be cheaper in an urban setting compared with sat-internet.
- avmich 4y ago
  Are you saying people won't want to travel and won't need internet outside of cities? Space is already paying for itself.
panick21_ 4y ago
This is not really true. If SpaceX fails to perform, they don't get the money. They developed things like Falcon Heavy totally by themselves on spec. They pushed the government into fixed price contracts. If SpaceX had failed to do the human launch, the cost would have been on SpaceX. As it is right now on Boeing.
- bumby 4y ago
  >If SpaceX had failed to do the human launch, the cost would have been on SpaceX. This is not how govt launches work. The payload (which is sometimes worth more than the rocket) is self-insured, meaning SpaceX is not responsible for eating that cost if it's lost. They are paid for the service (i.e., the ride) but have little to no cost regarding the cargo on govt launches.
  - panick21_ 4y ago
    This is true but that is the costumers responsibility if they want to insure their cargo or not. Whatever method or rocket design the govenrment uses this is always an issue. Just flying on a government provided rocket doesn't change that cargo is at risk of being lost because it is not insured. In this case the risk to the tax payer is always at risk, it has nothing to do with SpaceX as such or the method of rocket procurement. But the way the contracting model has been changed, the fact is, if SpaceX had not performed on their development and test campaign, they would have been stuck with the cost of most of that. Just as Being likely had to eat 600M+ because of their delays. So in terms of developing capabilities for the government to use, this was an incredibly low risk and cost effective one.
    - bumby 4y ago
      >This is true but that is the costumers responsibility if they want to insure their cargo or not. Yes, but this is somewhat missing the forest for the trees. The larger point is that relatively untested tech is going to be more expensive to insure because there is greater uncertainty. This makes it less economically viable until it proves itself to be reliable. Can a commercial company forego that and take on greater risk? Of course, but they aren't likely to because they are more risk-adverse for a variety of reasons. But because the govt is self-insured, the economic risk considerations related to that becomes a moot point. Meaning, the govt is in a unique position to take on risk to help an upstart like SpaceX. Note that 100% of Falcon Heavy contracts are govt (military/NASA). >Just as Being likely had to eat 600M+ because of their delays. But this is a different point. They are being penalized for contractual delays. This has the potential to increase risk because it incentivizes rushed development. We saw this with CST-100. The only reason it came to light is because the mission did not go as planned, and as a result NASA started to trigger additional oversight (which slows down development). This is part of why the CCP can move faster than NASA. They don't have to build to the same requirements as an in-house NASA build. To an extent, all NASA cares about is the ride. That works well as long as things go as planned. As soon as they don't, NASA will start doing engaging more oversight. This has already happened with SpaceX, too. When some unfavorable things came to light, NASA wanted more govt in-person inspections/audits.

chrisco255 4y ago

It's an odd strawman to focus on an arbitrary reduction in government spending, which is inherently part of the GDP calculation (C + G + I + NX, where G = government spending). For G to fall to 5% of the formula, some other variable would have to uptick, either Net Exports, Investments, or Consumption. It's hard to imagine a scenario where upticks in either of those 3 would not be beneficial to Tesla & SpaceX.

Bubble_Pop_22 4y ago
Tesla and SpaceX are political organizations basing their revenues off political trends Tesla: Climate change political trend SpaceX: Defense/National Pride political trend Organic exports, investments and consumption would not be benefiting such companies, the big winners would be the real bona fide and non-political companies I already mentioned: Apple, Microsoft, Exxon, JPM, Google, Amazon, Walmart. Meaning the stuff that people use daily as opposed to only reading about it in the tech and the financial press as aspirational goals after billions of dollars in subsidies and govt. contracts
- terafo 4y ago
  You are plainly wrong. Out of 50 Falcon 9 launches this year only 3 had DoD payloads.
  - Bubble_Pop_22 4y ago
    > You are plainly wrong. Out of 50 Falcon 9 launches this year only 3 had DoD payloads. If it's not DoD then it's military stuff from allies or Turkey, if it's not that then it's Starlink. In any event the point still stands. This company only exists in the financial press and the tech press. Regular people aren't using SpaceX nor they ever will considering how the world is increasingly urbanised so sat-tv and sat-internet are dead on arrival matched against fiber and 5G. The only exception is maybe the yacht crowd but they aren't regular people.
    - avmich 4y ago

panick21_ 4y ago

This is flat out inaccurate. Tesla sells a tiny % to government and if you are still trying to argue credits, you are beyond out of touch. And among all serious rocket companies in the world its the least dependent and direct by government. Microsoft as made gigantic amount of money selling to government. So do large banks. GM and Ford have much larger better organized departments selling to the government. Amazon has huge contracts with DoD as well.

Bubble_Pop_22 4y ago
Tesla would not exist today if it wasn't for Government mandated climate panic. It's a company selling subsidised go-karts to rich people in California and New York due to the out-of-touch worries of neurotic politicians in D.C. , Glasgow, Davos and Paris. > Microsoft as made gigantic amount of money selling to government Microsoft , you mean the company almost dissolved by the DOJ? I will retract my statements on Tesla being propped by cronysm when Govt. produces even 1/100th of scrutiny endured by Microsoft. Who am I kidding? It will never happen...for the DOJ to go after a company it needs to have market share of 70% and upwards, whereas despite billions of dollars in subsidies and credits Tesla can't even make it to 1% of yearly global new car sales. 1% in 20 years. Ladies and gentlemen the backbone of the global industrial economy. Not. However that's how the cult leader...ehm I mean the CEO advertises it to the world. Great dominance in the Financial press, tech press and gossip press though. And surprisingly even on HN and reddit people have fallen for the scam.
- panick21_ 4y ago
  So much nonsense and often repeated myths. So many basic mistakes. You should be embraced. > It's a company selling subsidised go-karts to rich people in California and New York due to the out-of-touch worries of neurotic politicians in D.C. , Glasgow, Davos and Paris. Wow tell us how you really feel, you must feel so superior. Of course its just unsubstantiated nonsense. So lets go threw some actual facts. Most vehicles Tesla sells are pretty close to avg new sale car price. So I guess you can call everybody that buys a new rich if you want but Tesla is not really spacial or unique in terms of selling to rich people. In terms of your 1%, they actually are more then 1%. 78 million are sold globally, Tesla this year will close to 1.5 million cars. Can you do the math? (And you can also do the numbers 12 month rolling if you don't want to include Q4 of this year). But don't let facts stop your rant. And if you want to look at it in terms of profit, Tesla is way larger fraction of the automotive market then that. And of course as far as your comment about how the press, the reality is Tesla profits this Quarter were higher then Ford and GM combined, close in profit to Toyota while having much better debt position and selling far fewer cars and models. And of course while still growing at incredible rates. Maybe just maybe that is why the financial press focuses on them more then many other companies. Go and search some historically comparable companies in terms of revenue and profit growth and tell me how Tesla is doing badly. > 1% in 20 years. Ladies and gentlemen the backbone of the global industrial economy. Not. However that's how the cult leader...ehm I mean the CEO advertises it to the world. Have you actually done literally any research on the topic ever? Tesla is one of the faster growing manufacturing companies in history and doing that while also interdicting a product that had not existed to any series degree in the market before. And Elon never said that Tesla is the 'backbone of global industrial economy' that just seems like something you made up. Please provide a source. > whereas despite billions of dollars in subsidies and credits In terms of subsidies Tesla got the same type of tax abatement's literally every large industrial player gets when making large. So if VW, Toyota or whoever had built a Gigafactory in Nevada they could have gotten the same kind of deal. This is just a reality of the way the system works. It doesn't give Tesla some magical advantage that they can exploit against other companies. Its just how the economy works, you can like it or hate it, but as a reason why Tesla is successful its absurdly terrible argument. And its also not cash they can just spend, its just a reduced expenditure over the next 20 years. So the idea that because of those subsidies Tesla got some competitive advantage is nonsense. Another thing people mention is the tax credits program. This is a program that only applied to 250k cars and again was available 10 years after Tesla was funded. Again this provides no competitive advantage to Tesla, ever car company could take advantage of that. And GM and other companies used these credits too. So again to claim that Tesla success can be explained by this mostly falls flat. The next and favorite thing people bring up is fuel credits. Fuel credits are system to reward companies that do good in terms of following regulations and punishes companies that are bad. This is not money from the government, this is money from car companies that pollute more then they are should. Again, these are the universal rules of the market. This rule was not designed for Tesla or with any intention of promoting Tesla. These are just the laws the car market operates under. We can have a discussion if fuel credits are the best policy tools for government to use. But fundamentally are you gone disagree with the concept that governments should have fuel standards give intensives to companies to do the right thing? Outside of climate crisis, local pollution alone make this a sensible policy. These fuel credits did net Tesla a few billion but do yourself a favor and go look threw Tesla financial history, you can exclude fuel credits income from its whole history. Then do some graphs on Tesla financials and their growth and margin curves. Then add the fuel credits, then compare the graphes. Anybody that claims that Tesla is only successful because of government action is just deluding themselves. Everybody who actually studied the financials of Tesla had figured out by 2014 that while Credits were nice little revenue boost, those that focused on credit were missing the woods because of the trees. > And surprisingly even on HN and reddit people have fallen for the scam. The scam of a company making 3+ billion $ a quarter at 15% operating margin. Yeah what a scam you must feel so smart.