Both Tesla and SpaceX receive heavy government subsidy. Tesla is not operating at a profit once government subsidies and tax breaks are removed.
I do not consider significant reliance on the state for funding the mark of a great entrepreneur. Musk has a bold vision, and the tenacity to execute on it, and that is commendable. But not without significant aid.
So what you're saying is that Elon Musk isn't capable of revolutionizing two long-standing American industries (arguably the two long-standing American industries) at the same time, single-handedly and without help, and that this is evidence that he is not a great entrepreneur.
That's not correct. The US government doesn't subsidize SpaceX, it purchases launches and technology. It's just a customer. And it buys those things for much cheaper than before. You as the tax payer are actually saving money compared to what NASA and the DoD were spending on the big contractors.
There's no sharp distinction between selling to the government as your sole customer, and subsidies. One bleeds into the other, and it's nothing like an efficient market against which one would hope to measure entrepreneurs.
Tesla recieves a subsidy to offset the implicit subsidy received by other car manufacturers, because doing the straightforward thing and banning all pollution is politically impractical. If you added the cost of global warming and people poisoned by oil refineries to the price of gas cars, tesla wouldn't need a subsidy.
Indeed. I think a recent IMF study suggested the U.S. would have to raise taxes $500B annually to account for pre- and post-consumer 'subsidies', mostly to compensate for externalities.
In U.S. budget-ese, you describe costs over a 10 year span, so that's a "$5 trillon tax hike".
The point being that the EV subsidy is small potatoes. I still think it's a bad idea. Tax the gas. Let producers and consumers figure out how to use less, and let governments figure out how to compensate for the regressiveness of the tax.
How much and to whom? Some poor people drive a lot. Some poor people don't drive at all.
EDIT: Also, you can't just give it all back. As long as emissions continue at something near current levels, you have to spend it on amelioration. It doesn't just become a slush fund.
I'd say as much of it as we can, equally per-capita.
> Some poor people drive a lot.
And either they will change their behavior, or be hurt less than if we didn't give the money back. As people generally change their behavior they will likely have more options, as demand rises for alternative modes of transportation (and for goods and services that involve burning less gas) leading to greater economies of scale.
> Some poor people don't drive at all.
But they still buy goods that were shipped by burning gas. Even so, they'll benefit more than others, but I don't think that's a problem.
> Also, you can't just give it all back. As long as emissions continue at something near current levels, you have to spend it on amelioration. It doesn't just become a slush fund.
We can certainly talk about taking a piece for amelioration, but I don't think paying that out of the general fund is unrealistic; it's what we'd be doing otherwise, and it'll be way cheaper if people have adjusted their behavior to reflect the true costs of their actions.
Why? Just give it back equally, and finance amelioration out of general revenue. (Not saying that's a good idea. You could finance amelioration out of a specific percentage of that tax.)
I suspect that would cause problems for the urban poor. Possibly also anyone for whom food makes up a large proportion of their annual budget, given both how reliant growing and transporting that is on oil and how reliant farmers are on internal-combustion vehicles.
Unfortunately, I'm not finding the numbers I need to get a good estimate. The important question is what portion of petroleum use winds up servicing those poor people versus the rest of the economy, because while it is certainly true that a small percentage increase in the costs of necessities hurts these people disproportionately, the money returned is a much greater portion of their income, and could very well dwarf the increased costs (indeed, this is what I would expect).
The very worst case, of course, is any who find themselves paying higher prices but unable for whatever reason to access the stipend.
Subsidies, tax breaks, issuing debts, give aways (pork), purchases, loans, war profiteering, patents, etc.
Everything.
Government even protects people's property rights.
Without governments, there is no wealth.
Personally, I'm quite proud that the US Govt is funding alternate energy, electric transportation, and space exploration. Many of the past investments have worked out quite well. I'm bullish about these investments too.
I have to disagree on that. Governments are the arbiter of most wealth, via taxation, subsidies, spending, the court system, etc. "Wealth" comes from production, transformation, and trade. I've taken a tree and nurtured it so that it produces fruit. The world is now one fruit-producing tree wealthier. I trade fruit with my neighbor for wool, because I value some quantity of wool higher than I value some quantity of fruit, and my neighbor values the fruit more than the wool. We are now each wealthier for trading something we have in excess for something we do not have.
The government then takes some of my fruit to feed the soldiers defending my land. Government's role in the economy is mandatory trade for the benefit of the society as a whole. I must provide fruit to the soldiers whether I want to or not. Sometimes there is a net gain through these trades (see space exploration, for example). Other times the gain from this trade is disputed (see California's high speed rail project).
He's not paying everything out of pocket, therefore he is not a great entrepreneur? My understanding is that great entrepreneurs find ways to distribute the risk.
Great entrepreneurs, in my opinion, Deal with others peacefully. They don't use the power of government to force people to invest. Or "distribute the risk" (a euphemism for overriding people's choice over what risks they choose to take).
Our government distributes enough risk to me already, while letting the pseudo entrepreneurs keep all the upside. That's the reason all those credit default swaps made by Goldman Sachs and others were paid for by the taxpayer.
SpaceX is a supplier to the US government. That is not the same thing a subsidy. They're actually saving them money.
Tesla is a recipient of government subsidy, but you pretty much have to operate in the auto market. Everybody else (big auto companies, big oil) are the recipients of massive subsidies too.
True, subsidized means a portion of the cost is absorbed by other party. SpaceX provides a service the customer needs at a competitive market rate. It is not much different from how Lockheed-Martin operates.
They received 450M$ to build a luxury vehicle from scratch in two years. In the same program, other companies got 1B$ just to retrofit some fucking factory.
