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Why Elon Musk is a Poor Person’s Worst Nightmare

EthanBearmanIn the movie Elysium, the wealthy and privileged flee Earth to inhabit a Larry Niven-like artificial ringworld, leaving the rest of humanity behind on a destitute planet. The future, if left to Elon Musk, bears an eerie resemblance to Elysium.

Musk, the chief executive officer (CEO) and chief technology officer (CTO) of SpaceX, the CEO of Tesla Motors, and chairman of the board of SolarCity, doesn’t care about the poor or middle-class and his business models prove it. The technology-centric crowd fawns over Musk like he is the second coming of Steve Jobs. He is a creative problem solver who looks to the future. However, his products serve only the wealthy and elite.

Government support through taxpayer and ratepayer subsidies of a billionaire’s business models is a form of fascism, blind to your labels of liberal and conservative.

There was a recent article in Quartz,”Why Elon Musk is a Utility Executive’s Worst Nightmare” fawning over SolarCity for upending the traditional power companies. Here is what they are all missing. Only homeowners can lease those solar panels that SolarCity installs. How many low, and even middle-income people are homeowners in California? The same California, and particularly Santa Cruz, which is one of the most expensive states and metro areas in the country. According to the U.S. Census Bureau, Santa Cruz’s homeownership rate is 59.4 percent and California overall is 56.7 percent compared to the national average of 66.1 percent.

Traditional power companies, like Pacific Gas & Electric, still maintain the power lines, transformers, substations and equipment for connecting those houses to the grid, yet SolarCity bears none of those costs. So, the lower- to middle-income renter subsidizes SolarCity and their customers through higher rates on electricity. Ratepayers in California have spent $1.68 billion on these subsidies to the benefit of SolarCity, competitors of SolarCity, their customers, and other industry players.

How many coal, natural gas, or oil power plants have been removed? Zero. Not one of those polluting plants has been decommissioned in California. One nuclear plant, San Onofre, is being taken off-line and not as a result of solar installations, but because of actual problems at the plant. The result of San Onofre’s discontinuance of contributing power to the grid is concern about rolling blackouts.

Is that fair, equitable, or just?

Don’t forget that those solar panels, constructed in the name of clean energy, are manufactured in  heavily polluting China. They are then transported across the ocean in bunker fuel-burning super freighters that produce massive amounts of pollution, and installed only to have high failure rates since the Chinese stole the solar panel manufacturing industry. When the sun isn’t shining, do you turn off your lights, refrigerator, television, and computer? So much for SolarCity providing an environmental benefit, since the coal, oil, gas, and nuclear plants are still required as base-load power sources on the grid.

It makes sense that Mr. Musk is heavily involved in a solar power company since his automobile company, Tesla Motors, makes electric vehicles. Electric vehicles that must plug into that electric grid for charging the lithium-ion batteries used to power the car. Tesla only makes vehicles for the top 5 percent earners in the United States. The base Model S starts at $62,500, which includes a taxpayer funded $7,500 incentive. Who pays those taxes again? We all do, including lower- and middle-income families. Now we subsidize both the power and the purchase of the vehicle using that power, all for the upper middle-class and above.

This is all starting to look like a regressive series of tax incentives benefiting the advantaged few on the backs of the many, isn’t it?

Tesla also builds a very large lithium-ion battery for use in their vehicles. This size battery is highly energy intensive to manufacture, resulting in a very long lifespan necessary to return the energy invested. Furthermore, lithium-ion batteries contain toxic and hazardous materials that lack a robust recovery, recycling and reuse industry.

Oh, but Elon Musk is a tremendous philanthropist, many might argue. It is true that he has signed on to The Giving Pledge, meaning he will give most of his wealth away before he dies. In the meantime, we have homeless, hungry and sick people that need help. His companies consume tax dollars from budgets, and his philanthropy today is limited to grid-connected solar panel systems. Musk is also founder and chairman of the Musk Foundation, which is mainly focused on solar and space.

Why do we continue spending taxpayer and ratepayer money to support billionaires, even the darlings of tech? 


Ethan Bearman is a writer and talk show host of the nationally syndicated “Ethan Bearman Show” on GCN, KSCO Presents, Tech Talk with Ethan Bearman on KBYR. Visit ethanbearman.com.

Comments (34)Add Comment
Always a hater
written by Elon Musk , July 20, 2014
Always a hater. Negative people. That's why your a loser and Elon is a winner. What have you done to make the world a better place. Nothing I would quess if you have time to write negative things about Elon. What your doing is not helping any one. If any thing your trying to damage a good persona reputation. When people judge you it does not define who you are. It defines who they are. PS I am lower class and homeless but I believe in Elon Musk to be a genuine good person who's motivations are selfless. I would not say the say about you. Why don't you go do something creative and productive with you life. Instead of being blogged down with the garbage you talk about.
Industrial artist
written by Jackie cox, July 17, 2014
Any so-called profit of tesla motors is far less than tax credits paid by the low classes who will never get to drive his clean-coal powered electric car, still in business because of obamas political donor kickback funding. We are a nation under occupation by criminality, deporting our manufacturing infrastructure into slave nations,shuttering small family business.
Entrepreneur
written by Cleanriver, May 31, 2014
I wonder if Mr. Ethan Bearman has taken the time to come back and genuinely read this negative feedback with then intention of understanding other views in order to make his product (presumably his thinking and writing) more informed.
Interestingly, Mr. Musk lives by the principle of seeking out negative feedback so he can make his products better.
Mr. Bearman, I suspect you have not. Please prove me wrong with a response.
EPOC
written by EPOC, April 14, 2014
Finally, someone who speaks the truth about Elon Musk. He is no entrepreneur, rather he is a visionary that has not delivered an ounce of operating profit on his own watch.
Not quite there...
written by ChPo, April 03, 2014
The oil industry and factory farm industries are subsidized more. Technology is expensive when it first comes out, but then decreases in price. They are working on new battery technologies as well. China recycles a lot of our waste, including metals, to produce new products. Although I find this point of view refreshing and in some ways valid, I still don't think it covers the complete picture. But I like this article.
You think only electric vehicle startups are subisidized?
written by Someguy, January 11, 2014
Tesla Motor's paid off the 500 million dollar government loan they owed 9 years early.

All vehicles on the road today are already subsidized.

A new type of vehicle design hits the market, and all of a sudden everyone is picking the company's brains about it.

Old companies such as Ford still owe the government billions, yet let's bag on Elon Musk for doing something different.
...
written by olanmills, January 08, 2014
Congratulations on a perfectly crafted click-bait article! Well done! Gawker journalists are in envy of your skills.
It either has to be grown, or mined.
written by Sixguns, December 23, 2013
The Eco-energy crowd seems not to realize that all the components and parts used in solar and wind power generation systems, are manufactured from raw materials dug or drilled from the ground. The equipment used to extract the various metals, process them, etc... operate on fossil fuels. The most efficient way to smelt the iron, tin, and copper is by oil and coal fired furnaces. These smartphones and other media sharing devices are all manufactured using these processes as well. These "Green Energy" companies require tax funded subsidies because they can't compete in a free market.
Your beef is not with Elon Musk - it's with the government
written by Xanthippe, December 23, 2013
Elon Musk is not a poor person's nightmare. Your argument does not justify your premise; however, it's a great argument against having the government pick winners and losers.

If solar is such a great idea, why must it be subsidized at all?

How about we get government out of the business of subsidizing anyone? That would lower taxes for us all, as well as allow people to compete against the big boys. Smaller, more local government is more responsive to the people.

Businessmen create opportunities out of the structure that government encourages or discourages. Change the government, don't blame someone for playing by the rules that are in place.
Audio Explanation of This Article
written by Ethan Bearman, December 23, 2013
I spoke with Glen Biegel on KBYR this morning about this article. You can listen online or mp3 download at http://wp.me/p4b6zX-bG
...
written by CorkyBoyd, December 21, 2013
The world and the US need more Elon Musks, not less.

He developed and marketed PayPal that opened the market to tens of thousand internet entrepreneurs who were too small to be eligible for Visa or MasterCard membership. Payment by checks wouldn't work. Customers had no way of knowing whether they would be scammed or whether the company even existed. And anyway checks by mail took to long.

Many of these entrepreneurs were individuals who were laid off during the dot.com market collapse who were too old to get good jobs, but had the smarts and savvy to sell niche products major retailers did not carry. Most were not in the top 5%.

When Musk sold his interest in PayPal, he took his money and founded SpaceX. Starting with a clean sheet of paper he developed a rocket launch system that NASA was incapable of doing. Just weeks ago his Falcon 9 rocket put a 3,000 pound payload into geosynchronous transfer orbit for half the cost of United Launch Alliance (the sole US heavy launch operation). He is taking contracts for even larger payloads from military and civilian clients. This will save taxpayers billions in the future. And he is doing it with a company of only 3,000 people. They design, build and launch their own launch vehicles.

His Tesla Motors is now profitable. He is one of the few green companies that has not defaulted on government "green" loans. He builds a product the public wants.

I don't know what bothers you about him.
...
written by Chad Lynch, December 21, 2013
Not a fan at all of government subsidies, but if he and his Space X can succeed in creating a fully reusable rocket - thereby putting mankind into space in a large scale, permanent basis - I wouldn't care if he takes up the recreational clubbing of baby seals and burning down orphanages in his off hours.
Atlas Shrugged
written by wwdmaxwell, December 20, 2013
Is the opinion we shouldn't allow governments to subsidize new industries once they can be shown by many to be viable on their own?

I thought the taxation warrant was misplaced, yes we all pay taxes... proportional taxes.

I think this article would've been much better represented had it discussed the proportional aspect of taxation. At the moment I am unclear if the facts in this article should be believed because I do not understand the tax base. I'm of the opinion that the wealthy (even with loops holes) also pay the majority of the taxes, therefore it seems appropriate that a technology for the wealthy is subsidized by the government.

Otherwise an excellent story telling element.
Thankfully not everyone thinks this way
written by Andreas Cambitsis, December 20, 2013
Its very easy to be cynical, isn't it. Especially if in our own lives we are doing very little for the betterment of humanity. And we then look at those who are doing great things, and we feel small, and look for reasons to belittle their efforts. We also feel compelled to lay an even more absurd amount of responsibility on these individuals. We need to see results now. And everyone must benefit now. Conveniently ignoring the role that governments, and other institutions are meant to be playing in addressing some of the issues you raise.
All I can say is that I am grateful for people like Elon Musk, who demonstrate that we can achieve far more than what we think is possible, and inspire me in small and in big ways to be a better person.
Responses
written by Ethan Bearman, December 20, 2013
GeorgeH - In what part of California do you live on $50k per year with a wife and two children while being able to afford a $30k car? The math doesn't compute unless you live with other family for low rent or rent free.

bbailyanks - So your argument is because we spend money on other things we should spend money for another billionaire to make more billions because you perceive it to be better for us? Any arguments on the massive pollution from the Chinese solar panels? Or the subsidies by rate payers?

AstroWill - Elon Musk co-founded PayPal, just like Al Gore he did not create the Internet, DARPA did that for us. Elon Musk has not created any new forms of energy production, just a large, energy inefficient (input versus output) lithium-ion battery for the cars containing toxic chemicals that lack a robust recycling industry. Your argument on the solar panels falls flat when China is burning more coal than the US, uses toxic chemicals when mining for rare earth elements, burn toxic bunker fuel to transport the panels, and then has a greater failure rate than the formerly US-made panels (http://www.nytimes.com/2013/05/29/business/energy-environment/solar-powers-dark-side.html?_r=0)

JM - Your argument is since you claim subsidies for one industry, state and ratepayer subsidies should go to a billionaire to make him more billions because you agree with him and not the other? And the arguments about oil subsidies are incorrect, the majority of what you and others call subsidies to oil companies are actually subsidies to farmers and poor people paying heating bills - http://www.forbes.com/sites/en...love-them/

None - so the hope of a one day promised $20k car is worth the all of the costs I listed out today? To make a billionaire richer at the same time?
Too funny
written by The Angry Left, December 19, 2013
The commenters here are hilarious. The author points out facts and hypocrisy of the solar crowd and people cry about oil companies. Subsidies are subsidies aren't they? The oil companies don't hide behind claims of "clean energy", unlike the solar crowd. Not one of you is denying the massive pollution due to the China factor either...
Tough for people to handle the truth
written by Sanity, December 19, 2013
Great article pointing out facts. Too bad the cult of personality around Mr. Musk clouds people's ability to see facts and logic.
Complete imbecile
written by None, December 19, 2013
You are clearly completely ignorant of topic. Not only is the long term goal of Tesla to create a 20k car for average people, it is to get us all off fossil fuels. SpaceX wants to preserve humanity as a whole by spreading life on otger planets. If Elon was just in for the money, he would have continued in the internet where it is much more easy to create incredible amounts for very low investments. If this represents your average article, I suggest you change jobs as accurate journalism really isnt made for you.
...
written by Sd, December 18, 2013
I wish everyone was more like him. If ford/gm/toyota/Chrysler all worked together think of the network or power stations there would be. Instead all these greedy companies care about are themselves and their profits. How about all working together towards a common goal and not wall streets. America needs to evolve and realize what's important. I grew up in the Midwest and worked for one of the big three, since moving to Ca I have changed my ways and realized a lot. I used to think he who died with the most toys wins, big house/truck/sports cars- honestly I could almost do without tv and a car now, I now live in a small apt and am much happier. More stuff=more debt! not just in money, but cost of ownership and storage etc. the internal combustion engine is one of the least efficent power generators and big oil companies don't want the change. I thnk public transportation needs major overhaul and think he is the man with the vision to accomplish.
...
written by rootieboy, December 18, 2013
New tech will always be for the rich in the beginning. You cannot fund innovation selling lemonade on the corner.
everyday person
written by Robin 7777, December 18, 2013
Ever heard of United States of Subsidies? Better to focus on the much larger problem the volume of tax dollars being spent lining the pockets of stockholders. http://tinyurl.com/cnvz97j

...
written by JM, December 18, 2013
The information in this article is misleading. You criticize Solar City and Tesla for being subsidized by the tax payer, but oil, gas, and coal are also subsidized by tax payers. According to Organization for Economic Cooperation and Development (OECD), American Tax payers are spending $10 billion a year to subsidize fossil fuels. The NGO, Earth Track, estimates it as high as $52 billion a year when you include defense spending to protect pipelines and shipping channels in the Persian Gulf. The National Academy of Sciences estimates that the US spends $120 billion annually in fossil fuel related health care costs. Compared those costs to Tesla's $133,000,000 worth of subsidies the government has given buyers of Teslas and Elon does not seem that bad. In fact, the US loaned Telsa $450 million and the company paid it back.
Really?
written by SiouxsySioux, December 17, 2013
Elon Musk is a genius and leading inventor of our time.
Ethan is on KSCO? Oh, figures!
Ethan ! C'mon !
written by Jimmy Limo, December 17, 2013
What a joke of an article
written by CIC100, December 17, 2013
What a load of crap. You sir are clueless. In the future pick a topic that you have a chance of specifying a reasonable position.
Ridiculous
written by AstroWill, December 17, 2013
I think you have to be pretty ignorant to write an article like this.

Musk has given more to humanity as a whole than most people ever will. If you knew anything about him you would know that his causes represent huge advancement for our society as a whole. Specifically he wants to

- Develop sustainable usage and generation of energy.
- Development of the internet
- Making life multiplanetary. (democratizing spaceflight)

The reason he is selling high end cars is because that is the only way to start and build a car company which is capital intensive. He has stated numerous times that he plans on delivering a mass market electric car in the near future and has stated that as his goal since the start.

SpaceX is delivering satellites to orbit for 10x less than NASA. This translates into billions of dollars of savings for the US government, which has a huge benefit for everyone. Not to mention that new science can be done due to the decrease in cost.

I'm not sure where SolarCity get's it's panels but I do know that it's better that China is building solar panels rather than parts for coal plants. How can you complain about making solar panels, I just don 't get it. That is probably the best long term, system level, thing for a company to produce.

As a poor person myself, I'm glad we have people like Elon Musk who have given more to this country and the world than you even will with your slanderous anti-human comments.

Try to think long term for once.
veterinarian
written by Jody Bearman, December 17, 2013
Excellent article. Thank you for watching out for the 99%!
Stupid article.
written by lol, December 17, 2013
You are an idiot. Your arguments are invalid, do you research.
Sight
written by bballyanks, December 17, 2013
The amount of tax payer money used on his companies is dwarfed by comparison to defense spending and entitlement programs. And when I say dwarfed, I mean really really really dwarfed. This guy is creating American jobs and is pushing the boundaries of how we think. I find this article to be very short sighted. Im so sorry he hasn't wiped out all the coal burning factories in less than 10 years. Unfortunatley things take time, especially good things.
...
written by GeorgeH, December 16, 2013
To the writer: I live in California with my wife and two children, earn $50,000 a year, and manage to pay the bills every month. And I believe that one day I'll be able to buy a 3rd generation Tesla at $30,000. You want to know what makes me wanna get up in the morning? It's people like Mr Musk who, rather than writing articles about how miserable the world and my life are, just work their butt off to make the future a little brighter.

If you really want to do something for the poors or protect our environment, stop pretending to care by discrediting people who work on fixing things, and start working on way to solve the problem.
Bulshit
written by Guntis, December 16, 2013
Bullshit
Skilled Laborer
written by Sugmullun, December 16, 2013
Where does one start to point out the ignorance of such an article?
What taxpayer funded incentive? Unless you have the arrogant attitude that you have the right to decide who the wealth one creates for for oneself actually belongs to, and that the wealth confiscated from people who earned it actually belongs to the mob through an "ignorant mob" form of democracy. No money is taken from anyone. Money just ISN'T taken from someone as an incentive to buy and encourage a new direction in consumer technologies.
Your whole article is full of this kind of upside down (non)sense.
Ethan... what are you smoking ?
written by jimmy limo, December 16, 2013
Brutal
written by Hunter, December 16, 2013
This is a biased and embarrassing assessment of what Elon is trying to do. Ethan is jealous.




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