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You may want to familiarize yourself with counter examples from Musk biographers, like Seth Abramson. Musk said himself SpaceX would’ve gone bankrupt without N

by bumby 2y ago

You may want to familiarize yourself with counter examples from Musk biographers, like Seth Abramson. Musk said himself SpaceX would’ve gone bankrupt without NASA contracts. He needed those contracts because Spacex was too high of a risk at the time for private business. NASA is self-insured. This is the the way the government supports high-risk nascent industries, because they are the only institution capable of shouldering that risk. It’s well-established that the solvency of his companies are tightly coupled, just like TFA. Further, Tesla is made competitive by subsidies for EVs and manufacturing. Not necessarily bad, but the success isn’t occurring in a free-market vacuum. When companies accepting subsidies go under, the govt doesn’t typically get that money back, at least not in full. (See the faux Solyndra “scandal”) I know that doesn’t fit the preferred narrative of the mythical free-market iconoclast succeeding in spite of the govt, but that’s reality. On the profit side, I should have said he gets a disproportionate amount of profit and the taxpayer gets a disproportionate amount of risk.

WalterBright 2y ago
> Musk said himself SpaceX would’ve gone bankrupt without NASA contracts. And he wasn't paid until he delivered, like any contract with a business. The taxpayers were never at risk. It was not a subsidy. Yes, Tesla benefited from EV subsidies, like all the electric car makers. He'd be stupid not to take the subsidy. > You may want to familiarize yourself with counter examples from Musk biographers, like Seth Abramson. I read "Elon Musk" by Ashlee Vance.
- bumby 2y ago
  >The taxpayers were never at risk I’d implore you to research more about how the CCP is administered. There are payments before any astronaut gets a ride. Meaning if the company goes out of business beforehand, the taxpayers lost that money without receiving the actual service intended. That’s also why NASA selected two CCP contractors, it distributes the risk. Maybe you think socializing risk to the taxpayer makes him a smart businessman, I just wish people would comes to terms with the fact that his wealth is inextricably linked to taxpayers. Like I said before, it’s not even necessarily a bad thing but call it what it is. I personally think the hybrid public-private arrangement works well when it’s not being abused. Regardless of all that, the point was that Musk is not a paragon of free-market capitalism. Nothing you’ve pointed out negates that point, yet people still cling to that narrative for…reasons. I suspect it has more to do with cognitive biases than reality.
  - WalterBright 2y ago
    My house was built to my specification. The general contractor required that I make progress payments. He wanted to be sure he wouldn't be left holding the bag for all of it after I moved in (and he also needed cash to buy supplies and hire subcontractors). I took a risk he didn't just disappear with the up front payment. When I had the roof replaced, I had to pay half up front. And so on. This is normal business practice. There is nothing not free market about progress payments. (Besides, if NASA was fronting all the money, SpaceX wouldn't have gone bankrupt if the rocket blew up. But what I've read was Musk bet the company on it not blowing up.) I decided to check one detail. The EV subsidy came in the form of a tax credit to the buyer, it is not paid to the car manufacturer. Musk had nothing to do with it. > I suspect it has more to do with cognitive biases than reality. Imagining oneself as dealing in reality rather than cognitive bias is yet another cognitive bias. Everything written about Musk is subject to cognitive bias one way or another.
    - bumby 2y ago
      You order an uber. You aren’t expected to make progressive payments so the driver can buy the car, get gas, etc. That’s the more appropriate analogy. As I said, CCP is a service contract, not a product. A house is a product so it even if the contractor goes out of business, you still have the foundations, studs, etc. ie your payments cover the partial product you are actually contracted to receive. A house is a misapplied analogy that belies some ignorance on the commercial crew program. Businesses can leverage POs to fund operations. That’s why the NASA contract matters. Yes, the EV subsidy goes to the buyer. The point was it makes the product more competitive at its price point. That point still stands. Besides, Tesla also benefited from multiple other taxpayer benefits. For example, they get hundreds of millions in tax incentives for their factories. Again, their profitability is propped up by taxpayers. I’ve never claimed to be completely unbiased. However, we do have the benefit of testing out narratives with facts. The mental gymnastics needed to deny that these ventures/profits are somehow not related to taxpayers is, in a word, “nuts”
      - WalterBright 2y ago
- stephen_g 2y ago
  “And he wasn't paid until he delivered, like any contract with a business” I don’t know the specifics of these contracts, but I very much doubt it based on my experience. That’s not how any Government development contract I’ve ever worked on has worked… There are startup payments, payments for milestones (including many at the start for various design stages before anything was built), payments at varying levels of build, etc… - often more than half (sometimes more than three quarters) of the contract value was paid before the final product was delivered. We did some pretty cool things too (this was in defence satellite communications) but various Government customers took like 80% of the risk on the development most of our big products (obviously we had already proven our design abilities with smaller components but much smaller scale), which we would then sell to them and other Governments.

by bumby 2y ago

WalterBright 2y ago

> Musk said himself SpaceX would’ve gone bankrupt without NASA contracts. And he wasn't paid until he delivered, like any contract with a business. The taxpayers were never at risk. It was not a subsidy. Yes, Tesla benefited from EV subsidies, like all the electric car makers. He'd be stupid not to take the subsidy. > You may want to familiarize yourself with counter examples from Musk biographers, like Seth Abramson. I read "Elon Musk" by Ashlee Vance.

bumby 2y ago
>The taxpayers were never at risk I’d implore you to research more about how the CCP is administered. There are payments before any astronaut gets a ride. Meaning if the company goes out of business beforehand, the taxpayers lost that money without receiving the actual service intended. That’s also why NASA selected two CCP contractors, it distributes the risk. Maybe you think socializing risk to the taxpayer makes him a smart businessman, I just wish people would comes to terms with the fact that his wealth is inextricably linked to taxpayers. Like I said before, it’s not even necessarily a bad thing but call it what it is. I personally think the hybrid public-private arrangement works well when it’s not being abused. Regardless of all that, the point was that Musk is not a paragon of free-market capitalism. Nothing you’ve pointed out negates that point, yet people still cling to that narrative for…reasons. I suspect it has more to do with cognitive biases than reality.
- WalterBright 2y ago
  My house was built to my specification. The general contractor required that I make progress payments. He wanted to be sure he wouldn't be left holding the bag for all of it after I moved in (and he also needed cash to buy supplies and hire subcontractors). I took a risk he didn't just disappear with the up front payment. When I had the roof replaced, I had to pay half up front. And so on. This is normal business practice. There is nothing not free market about progress payments. (Besides, if NASA was fronting all the money, SpaceX wouldn't have gone bankrupt if the rocket blew up. But what I've read was Musk bet the company on it not blowing up.) I decided to check one detail. The EV subsidy came in the form of a tax credit to the buyer, it is not paid to the car manufacturer. Musk had nothing to do with it. > I suspect it has more to do with cognitive biases than reality. Imagining oneself as dealing in reality rather than cognitive bias is yet another cognitive bias. Everything written about Musk is subject to cognitive bias one way or another.
  - bumby 2y ago
    You order an uber. You aren’t expected to make progressive payments so the driver can buy the car, get gas, etc. That’s the more appropriate analogy. As I said, CCP is a service contract, not a product. A house is a product so it even if the contractor goes out of business, you still have the foundations, studs, etc. ie your payments cover the partial product you are actually contracted to receive. A house is a misapplied analogy that belies some ignorance on the commercial crew program. Businesses can leverage POs to fund operations. That’s why the NASA contract matters. Yes, the EV subsidy goes to the buyer. The point was it makes the product more competitive at its price point. That point still stands. Besides, Tesla also benefited from multiple other taxpayer benefits. For example, they get hundreds of millions in tax incentives for their factories. Again, their profitability is propped up by taxpayers. I’ve never claimed to be completely unbiased. However, we do have the benefit of testing out narratives with facts. The mental gymnastics needed to deny that these ventures/profits are somehow not related to taxpayers is, in a word, “nuts”
    - WalterBright 2y ago
stephen_g 2y ago
“And he wasn't paid until he delivered, like any contract with a business” I don’t know the specifics of these contracts, but I very much doubt it based on my experience. That’s not how any Government development contract I’ve ever worked on has worked… There are startup payments, payments for milestones (including many at the start for various design stages before anything was built), payments at varying levels of build, etc… - often more than half (sometimes more than three quarters) of the contract value was paid before the final product was delivered. We did some pretty cool things too (this was in defence satellite communications) but various Government customers took like 80% of the risk on the development most of our big products (obviously we had already proven our design abilities with smaller components but much smaller scale), which we would then sell to them and other Governments.