When the history of crony capitalism is written, Elon Musk will deserve a chapter to himself. Mr. Musk began his career as a risk-taker and entrepreneur, co-founding the innovative online-payment system PayPal. His latest ventures depend on taxpayers, K Street lobbyists and campaign contributions. His pals really pay.
Many tout the benefits of “public-private” partnerships, but Mr. Musk’s transformation from Internet entrepreneur to consummate political insider embodies everything wrong in a system that puts politicians in the back pockets of big business.
The cozy relationship turns the Treasury into an enormous ATM machine for the cronies, with the cash supplied by taxpayers billed for “investments.” Mr. Musk’s enabler is Trent Lott, the onetime leader of the former Republican majority in the Senate. Mr. Lott has a better job now, roaming the corridors of power to ensure the government “investment” spigots stay open to Mr. Musk’s companies: Tesla Motors, SolarCity and SpaceX.
A generous political donor, Mr. Musk gave Democrats the greater share of $290,000 in contributions over the past four years, including $66,200 to the Democratic National Committee and $34,400 to the Democratic Senatorial Campaign Committee. He gave Barack Obama $2,300 in 2008 and $5,000 in 2012, and $63,500 to the National Republican Congressional Committee. From 2007 to 2011, Tesla Motors spent $480,000 to lobby Congress, the White House and various federal agencies on global warming, energy issues and electric vehicles.
The cash was well spent, as Mr. Musk’s firms hit the federal jackpot. Tesla Motors won a $465 million federal loan guarantee that bestowed upon wealthy Hollywood celebrities the pleasure of spending $100,000 for an electric roadster that taught them a new term, “bricking.” When a Tesla battery fully drains, the car can’t be started and becomes as useful as a brick. Actually, not quite as useful, because you can always use a brick as a doorstop. Mr. Musk turned his “investment” into a personal windfall when he took Tesla Motors public.
Mr. Musk’s solar-panel installation company, SolarCity, received $275 million from the Obama administration. California and other states have thrown in their own subsidies to the users of SolarCity’s product. Mr. Musk took this company public in December despite an ongoing Treasury Department investigation into abuses of taxpayers. Mr. Musk pocketed more millions when the company began trading on Nasdaq.
The Musk companies will inevitably have to stand on their own, and there’s the rub. Electric cars and solar panels would be far less attractive if prospective customers could see price tags absent subsidies, tax credits and government incentive discounts.
The Tesla seems just not ready for prime time — or the market. When a reviewer for The New York Times tried to drive the Tesla Model S from Washington to Boston, which is usually an eight-hour drive, the Tesla ended the trip on a flatbed truck, having run out of juice before it could be recharged. Not a flattering image for a car brought to you by the federal government. Maybe Mr. Musk could use some of his loot to buy a very long extension cord.
The Washington Times