6 ms·

I don't disagree with the main point, that the three companies has benefited from subsidies. But it's framed as if this is unique, where in reality you'll find

I don't disagree with the main point, that the three companies has benefited from subsidies. But it's framed as if this is unique, where in reality you'll find subsidies in these (and many other) industries. # Cars GM, Chrysler etc. bailed out for $85B. Sector subsidized in other ways too. # Space Most of the space industry is paid for by various governments (some satellites are the only exception). NASA is about half of SpaceX revenue, certainly a large chunk. # Energy IMF recently released a report[1], where fossil fuel subsidies are estimated at $1.9 trillion. Other types of energy are subsidized too, solar in China, nuclear in France, etc. [1] http://www.imf.org/external/pubs/ft/wp/2015/wp15105.pdf http://www.imf.org/external/pubs/ft/wp/2015/wp15105.pdf

smoyer 11y ago
Regarding your comment on energy - I hadn't thought about that but the worst of the fossil fuel subsidies has to be turning large portions of the corn crop into ethanol then ruining the performance (and sometimes internal parts) of our internal combustion engines. It's truly the worst of both worlds!
- mikeash 11y ago
  In my opinion, the worst by far is the implicit subsidy where fossil fuel users are allowed to pollute without paying for the damage caused by that pollution. If you accounted for that fully, renewables would be cheaper today. Coal pollution alone causes something like one million deaths per year. It's like a big war that never stops. That's not even counting the potential deaths and disruption from climate change. Fossil fuel users poison our land, air, and water without consequence and without paying for the damage, but somehow it's the guy making solar panels and electric cars that everybody complains about.
  - smoyer 11y ago
    Until the late '60s or early '70s, no one worried about the pollution so long as the economic engine was running strong. There were clear days that you couldn't see half a mile in Pittsburgh PA [1], and entire rivers of volatile chemicals catching fire [2]. We've done a lot to curb those excesses but I agree with your primary sentiment. Why pollute at all if we can avoid it? Interestingly, China's current economic growth is also fueled without consideration of the environment. You can still travel on coal-fired steam locomotives ... and they're not historic excursions but rather new technology. We also have to look at renewable combustibles as some people will claim they're not dependent on fossil fuels but they're still contributing to carbon release when burning wood (or wood pellets) as fuel. [1] https://www.google.com/search?q=pittsburgh+steel+mill+smog&biw=1238&bih=897&tbm=isch&tbo=u&source=univ&sa=X&ei=BTdqVdyXB4uqgwSF-YDICQ&ved=0CCoQ7Ak https://www.google.com/search?q=pittsburgh+steel+mill+smog&b... [2] https://www.google.com/search?q=cleveland+river+fire&sa=X&biw=1238&bih=897&tbm=isch&tbo=u&source=univ&ei=UDdqVce6OMWrNsfzgKAJ&ved=0CB4QsAQ https://www.google.com/search?q=cleveland+river+fire&sa=X&bi...
  - nextos 11y ago
    That's so true. It's called an externality in the economics jargon: http://en.wikipedia.org/wiki/Externality http://en.wikipedia.org/wiki/Externality
  - brucefancher 11y ago
    Thanks for providing some evidence to back your assertion. Oh wait, you didn't.
CHaro 11y ago
Don't forget: #agriculture Monsonto
- joshu 11y ago
  What does this have to do with Musk's businesses?
  - frankdenbow 11y ago
    It doesn't. His point is that subsidies are common in other industries and that it is framed as unique in reference to Musk's businesses.
frankdenbow 11y ago
Farming as well http://www.reuters.com/article/2014/10/06/us-foundation-food-subsidies-idUSKCN0HV1NK20141006 http://www.reuters.com/article/2014/10/06/us-foundation-food...
- deleted 11y ago
  [deleted]
stretchwithme 11y ago
Its even more common for companies to prove their business models without making taxpayers pay for it. It's generally easier to influence politicians to give away other people's money than it is to convince customers to use their own. EVERY business should have to do that without special help.
threefour 11y ago
True. And closer to our space, years ago I started an online/offline school with a dream of becoming what General Assembly is now. The marketing costs made my venture less palatable. GA was smart to get a $200K grant from NYC to get over that hump. http://techcrunch.com/2011/01/24/nyc-general-assembly-200k-grant/ http://techcrunch.com/2011/01/24/nyc-general-assembly-200k-g...
bedhead 11y ago
E&P companies are effectively subsidized through wildly favorable tax treatment that allows them to expense all capital costs upfront which are usually not deductible. Most independent E&P's (ie the ones who are almost entirely responsible for the shale boom) pay virtually no cash taxes whatsoever.
the8472 11y ago
There's also this: > Nevada at first offered its standard package of incentives, in this case worth $600 million to $700 million Considering that there is such a thing as a "standard package of incentives" from a single state and it already amounts to about half of the largest listed bullet points in this article makes this sound almost ordinary.
sgnelson 11y ago
In terms of Cars, I'd argue the true subsidy is the highway system and every other governemnent built road.
3am 11y ago
Don't forget agriculture, aerospace/defense, banking. Hard to get bent out of shape when someone gets a slice of the pie that is trying to improve things.
JshWright 11y ago
Regarding Space... SpaceX's primary competitor in the US (when it comes to government launches) is a joint venture between Boeing and Lockheed Martin called ULA. ULA receives a _billion_ dollars a year just to maintain their ability to launch rockets (they still get paid enormous sums of money for each launch on top of the subsidy). On top of that, they were recently awarded an 11 billon dollar 'block buy' contract covering launches over the next five years. The award occurred suspiciously just before SpaceX was supposed to be certified to launch DoD payloads (and therefore would have been eligible to compete for those launches). Note: That 11 billion figure doesn't include the 5 billion dollars worth of annual subsidies they will receive over the duration of the contract
_nedR 11y ago
>>that the three companies has benefited from subsidies. More to the point, America has benefited tremendously from subsidizing these companies. Elon Musk was a South African born Canadian (before he took American citizenship). He could have probably based these companies in any country of his choosing. Now America has at least 2 more private companies that are breaking new ground in their respective fields, and adding to America's GDP (and befitting the world in the process). Even if govt. funding played only a small part in the success of these companies, I would say this makes a strong argument for govt. subsidies.

smoyer 11y ago

Regarding your comment on energy - I hadn't thought about that but the worst of the fossil fuel subsidies has to be turning large portions of the corn crop into ethanol then ruining the performance (and sometimes internal parts) of our internal combustion engines. It's truly the worst of both worlds!

mikeash 11y ago
In my opinion, the worst by far is the implicit subsidy where fossil fuel users are allowed to pollute without paying for the damage caused by that pollution. If you accounted for that fully, renewables would be cheaper today. Coal pollution alone causes something like one million deaths per year. It's like a big war that never stops. That's not even counting the potential deaths and disruption from climate change. Fossil fuel users poison our land, air, and water without consequence and without paying for the damage, but somehow it's the guy making solar panels and electric cars that everybody complains about.
- smoyer 11y ago
  Until the late '60s or early '70s, no one worried about the pollution so long as the economic engine was running strong. There were clear days that you couldn't see half a mile in Pittsburgh PA [1], and entire rivers of volatile chemicals catching fire [2]. We've done a lot to curb those excesses but I agree with your primary sentiment. Why pollute at all if we can avoid it? Interestingly, China's current economic growth is also fueled without consideration of the environment. You can still travel on coal-fired steam locomotives ... and they're not historic excursions but rather new technology. We also have to look at renewable combustibles as some people will claim they're not dependent on fossil fuels but they're still contributing to carbon release when burning wood (or wood pellets) as fuel. [1] https://www.google.com/search?q=pittsburgh+steel+mill+smog&biw=1238&bih=897&tbm=isch&tbo=u&source=univ&sa=X&ei=BTdqVdyXB4uqgwSF-YDICQ&ved=0CCoQ7Ak https://www.google.com/search?q=pittsburgh+steel+mill+smog&b... [2] https://www.google.com/search?q=cleveland+river+fire&sa=X&biw=1238&bih=897&tbm=isch&tbo=u&source=univ&ei=UDdqVce6OMWrNsfzgKAJ&ved=0CB4QsAQ https://www.google.com/search?q=cleveland+river+fire&sa=X&bi...
- nextos 11y ago
  That's so true. It's called an externality in the economics jargon: http://en.wikipedia.org/wiki/Externality http://en.wikipedia.org/wiki/Externality
- brucefancher 11y ago
  Thanks for providing some evidence to back your assertion. Oh wait, you didn't.

CHaro 11y ago

Don't forget: #agriculture Monsonto

joshu 11y ago
What does this have to do with Musk's businesses?
- frankdenbow 11y ago
  It doesn't. His point is that subsidies are common in other industries and that it is framed as unique in reference to Musk's businesses.

frankdenbow 11y ago

Farming as well http://www.reuters.com/article/2014/10/06/us-foundation-food-subsidies-idUSKCN0HV1NK20141006 http://www.reuters.com/article/2014/10/06/us-foundation-food...

deleted 11y ago
[deleted]

stretchwithme 11y ago

Its even more common for companies to prove their business models without making taxpayers pay for it. It's generally easier to influence politicians to give away other people's money than it is to convince customers to use their own. EVERY business should have to do that without special help.

threefour 11y ago

True. And closer to our space, years ago I started an online/offline school with a dream of becoming what General Assembly is now. The marketing costs made my venture less palatable. GA was smart to get a $200K grant from NYC to get over that hump. http://techcrunch.com/2011/01/24/nyc-general-assembly-200k-grant/ http://techcrunch.com/2011/01/24/nyc-general-assembly-200k-g...

bedhead 11y ago

E&P companies are effectively subsidized through wildly favorable tax treatment that allows them to expense all capital costs upfront which are usually not deductible. Most independent E&P's (ie the ones who are almost entirely responsible for the shale boom) pay virtually no cash taxes whatsoever.

the8472 11y ago

There's also this: > Nevada at first offered its standard package of incentives, in this case worth $600 million to $700 million Considering that there is such a thing as a "standard package of incentives" from a single state and it already amounts to about half of the largest listed bullet points in this article makes this sound almost ordinary.

sgnelson 11y ago

In terms of Cars, I'd argue the true subsidy is the highway system and every other governemnent built road.

3am 11y ago

Don't forget agriculture, aerospace/defense, banking. Hard to get bent out of shape when someone gets a slice of the pie that is trying to improve things.

JshWright 11y ago

Regarding Space... SpaceX's primary competitor in the US (when it comes to government launches) is a joint venture between Boeing and Lockheed Martin called ULA. ULA receives a _billion_ dollars a year just to maintain their ability to launch rockets (they still get paid enormous sums of money for each launch on top of the subsidy). On top of that, they were recently awarded an 11 billon dollar 'block buy' contract covering launches over the next five years. The award occurred suspiciously just before SpaceX was supposed to be certified to launch DoD payloads (and therefore would have been eligible to compete for those launches). Note: That 11 billion figure doesn't include the 5 billion dollars worth of annual subsidies they will receive over the duration of the contract

_nedR 11y ago

>>that the three companies has benefited from subsidies. More to the point, America has benefited tremendously from subsidizing these companies. Elon Musk was a South African born Canadian (before he took American citizenship). He could have probably based these companies in any country of his choosing. Now America has at least 2 more private companies that are breaking new ground in their respective fields, and adding to America's GDP (and befitting the world in the process). Even if govt. funding played only a small part in the success of these companies, I would say this makes a strong argument for govt. subsidies.