Via Bloomberg. I think the, Duke de Suly, the father of French Statism, would be proud.
What got me thinking about this recently was an intriguing article by University of Houston professor Craig Pirrong. In "The Rent Seeker, Posing as Visionary,'' Pirrong criticized the long line of government-support programs that Elon Musk’s many companies seem to be involved in. .....
What was so galling about Musk to him? Well to begin with, his sheer level of hypocrisy. His car company, Tesla, received $452 million in government loans; after the company paid them back, Musk suddenly decided that federal investments and/or loans to promote alternative energy was a bad idea. That is to my mind, the equivalent of Citigroup Inc. and Bank of America Corp. opposing bank bailouts, but only after 2013 on.
As Pirrong points out, almost all of Musk’s companies rely in some form on government subsidies or tax breaks. Tesla’s earnings, according to Forbes, aren't derived from selling automobiles, but from selling “emissions credits mandated by the state of California’s electric vehicle requirements.”
SpaceX, Musk’s space-launch venture is dependent on government contracts (it is the recipient of a $1.6 billion contract to resupply the International Space Station). And his SolarCity, the nation’s second-largest solar-electrical contractor, also benefits from tax breaks and subsidies.
Is Musk a visionary, or a rent-seeker? I think it's premature to make the claim that he is a full-on rentier. He certainly has a foot in each camp. Where he falls on the spectrum from parasitic monopolist to visionary genius has yet to be determined. I lean towards visionary, despite how much I despise PayPal, the online-payments system that Musk sold to eBay Inc. It is fairly clear that the final verdict on Musk has yet to be determined. "
What got me thinking about this recently was an intriguing article by University of Houston professor Craig Pirrong. In "The Rent Seeker, Posing as Visionary,'' Pirrong criticized the long line of government-support programs that Elon Musk’s many companies seem to be involved in. .....
What was so galling about Musk to him? Well to begin with, his sheer level of hypocrisy. His car company, Tesla, received $452 million in government loans; after the company paid them back, Musk suddenly decided that federal investments and/or loans to promote alternative energy was a bad idea. That is to my mind, the equivalent of Citigroup Inc. and Bank of America Corp. opposing bank bailouts, but only after 2013 on.
As Pirrong points out, almost all of Musk’s companies rely in some form on government subsidies or tax breaks. Tesla’s earnings, according to Forbes, aren't derived from selling automobiles, but from selling “emissions credits mandated by the state of California’s electric vehicle requirements.”
SpaceX, Musk’s space-launch venture is dependent on government contracts (it is the recipient of a $1.6 billion contract to resupply the International Space Station). And his SolarCity, the nation’s second-largest solar-electrical contractor, also benefits from tax breaks and subsidies.
Is Musk a visionary, or a rent-seeker? I think it's premature to make the claim that he is a full-on rentier. He certainly has a foot in each camp. Where he falls on the spectrum from parasitic monopolist to visionary genius has yet to be determined. I lean towards visionary, despite how much I despise PayPal, the online-payments system that Musk sold to eBay Inc. It is fairly clear that the final verdict on Musk has yet to be determined. "
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