On Jun3 13, 2017, Ethan Huff writes on Natural News:
If the quintessential public welfare abuser had a corporate replica, it would be Elon Musk and his multibillion-dollar trio of companies: Tesla Motors Inc., SolarCity Corp., and Space Exploration Technologies Corp., also known as SpaceX. As successful as these three entities appear to be on their own, the truth of the matter is that none of them would even exist were it not for Musk’s crafty ways in swindling governments out of billions in taxpayer dollars to subsidize his various pet ventures.
It is estimated that since their respective launches, Tesla, SolarCity, and SpaceX have together benefited from an estimated $4.9 billion in government welfare payments. This means that everyday working folks are having a portion of their hard-earned wages handed over to Musk so he can pump out more Model S electric sedans, for instance, which typically sell to buyers who, on average, boast household incomes of about $320,000.
From the very beginning, Musk has centered his attention towards extracting as much cash as he can from the public coffers to fund his endeavors. This includes taking advantage of every incentive, grant, tax break, and environmental credit available at both the federal and local level. When this isn’t enough, Musk has been known to go even further, bringing together state leaders to compete for his business by doling out even more money.
The ways in which Musk obtains taxpayer funds for his various business ventures closely resembles what someone who’s addicted to food stamps might do to keep the E.B.T. card loaded without actually having to work. The public-private financing model upon which he relies is the primary means keeping Musk’s businesses alive, as neither Tesla nor SolarCity have yet to operate in the positive.
“He definitely goes where there is government money,” stated Dan Dolev, an analyst at Jefferies Equity Research, to the Los Angeles Times. “That’s a great strategy, but the government will cut you off one day.”
If you’re a taxpayer, you’re helping rich people buy Tesla cars and SolarCity solar panels
This hasn’t happened yet, though. In fact, Musk seems to be expanding his financial maneuvering whenever and wherever possible to seize an even greater share of the welfare pot for his companies. He recently smooth-talked New York State into contributing $750 million towards a new SolarCity manufacturing plant in Buffalo. SolarCity’s annual rent will be just $1, and the company will not be required to pay property taxes at the site for 10 years.
Meanwhile, New York taxpayers will be footing the bill, even though many of them could never afford to purchase SolarCity solar panels, even with the small subsidies offered by the government. They’ll also have to continue paying property taxes on their own homes and businesses, while SolarCity – which, again, wouldn’t exist without taxpayer money – gets a free ride for at least the next decade.
Or how about the $1.3 billion in incentives the state of Nevada recently awarded to Tesla to develop a large battery manufacturing facility near Reno? This incredible feat was accomplished after Musk aggressively negotiated with Nevada lawmakers for more than a year, pitting the leaders of other states against them to maximize his welfare handout. By playing welfare hardball, Musk was able to convince Nevada lawmakers to actually forego giving incentives to other industries such as film and insurance to instead funnel it all to him.
In Texas, a small community at the southern tip of the state awarded Musk’s SpaceX company with a generous $5 million benefits package that includes infrastructure spending and subsidies. These subsidies include a 15-year property tax break from the local school district, which means $3.1 million less for local schools, and $3.1 million more for SpaceX. And this is all in addition to the $10 million that the state of Texas also awarded to SpaceX for the apparent privilege of having a Musk facility on its land.
Each state, including Texas, that’s cooperated with Musk in giving him everything he demands has done so under the pretense of creating more jobs, and thus more revenue. The leaders of these states have been more than eager to gulp down Musk’s Kool-Aid because they really believe that what he’s bringing to the table in terms of innovation will far exceed their initial investment.
Will Musk ever fulfill his promise of releasing an affordable Tesla vehicle for the middle class?
This may end up being the case eventually. But as of now, a lot of Musk’s endeavors are still a pipe-dream in terms of actually paying off. Things get even more complicated when considering that he isn’t even keeping simple promises like releasing Tesla cars that are actually affordable to the average person like he said he would.
“In the early days at Tesla – when the company first produced an expensive electric sports car, which it no longer sells – Musk promised more rapid development of electric cars for the masses,” writes Jerry Hirsch for the L.A. Times, noting that Musk promised in a 2008 blog post to release a sedan costing no more than around $40,000. That, of course, never happened.
“In fact, the second model now typically sells for $100,000, and the much-delayed third model, the Model X sport utility, is expected to sell for a similar price. Timing on a less expensive model – maybe $35,000 or $40,000, after subsidies – remains uncertain.”
Bre Payton, writing for The Federalist, put it oh so well when she described Musk as “a pretty shady dude who preys on taxpayers by pressing on progressive lawmakers’ soft spot for renewable energy.” She says that both SolarCity and Tesla “have a reputation of sucking the marrow from taxpayers in the form of mandates, rebates, and tax breaks.”
NaturalNews would agree, based on Musk’s extensive track record of milking the system for his own personal gain – in the name of helping the environment and paving the way for a renewable future, of course.
Such huge taxpayer-funded incentives are just the beginning as Elon Musk and his executive team have forecast growth to be in the several billions of dollars over the course of the next five years, further enriching the stock ownership portfolios of Musk corporations’ monopoly ownership. Yet the workers just get to have jobs, but no ownership such as could be provided using an Employee Stock Ownership Plan (ESOP) with new shares issued and paid for our of future earnings without reducing worker wages or other benefits, and at the same time incentivizing workers as true owner-partners in the enterprises.
Elon Musk represents one of the perfect examples of crony-end game capitalism disguised to the taxpaying citizens as necessary to create jobs and advance solutions to environmental enhancement. In this case, the game is played in the name of alternative transportation, planetary colonization and the environment. NO WHERE is there a stipulation that the subsidies, tax exemptions, loans and grants be conditioned on 100 percent worker owned companies, not as a collective but in individual worker titles, or that the financing is structured so that the workers will end up owning a significant share of the new capital assets and the benefits of the future wealth-creation and income generated. While supposedly more than 6,500 jobs will be created, subsidized by taxpayer incentives, in large measure the new factories will be technologically infused with advanced “robotics,” digitalized operations, and super-automation capital assets, that will be OWNED by Elon Musk and a select narrow group of wealthy owners who get to cash in on our taxpayer incentives and subsidies as the worth of the corporations accelerate.
Once again, taxpayer supported government welfare is extended to the private sector without the stipulation of broadening private, individual ownership of NEW productive capital investment related to technological innovation and invention. This is in the form of government subsidies, loan guarantees and tax incentives that are issued in the name of JOB CREATION, while oblivious to the CONCENTRATED CAPITAL OWNERSHIP CREATION resulting from bolstering the financial ownership interests of the awarded companies’ ownership class.
What is needed is a massive loan guarantee economic growth plan with the aim to balance production and consumption by empowering EVERY American to acquire private, individual ownership in FUTURE wealth-creating, income-producing productive capital asset investments and pay for their loans out of the earnings of the investments. This approach embraces the logic of corporate finance, that is, that the investments will over time, typically within 3 to 7 years, produce income to pay for the capital credit extended and to continue to produce income for the corporate owners over the course of numerous years in the future.
Unfortunately, with Elon Musk’s corporate enterprises and others, the subsidies, tax incentives, direct loans and loan guarantees do not stipulate the demonstration of broadened private, individual ownership among the employees of the companies receiving taxpayer financial support. Instead the direct loans and loan guarantees are pitched as JOB CREATION measures while completely hiding the fact that a privilege ownership class benefits as the owners of investment assets.
In the short-term FUTURE, ALL direct loans and loan guarantees should stipulate that corporations demonstrate broadened ownership of their corporations by their employees and other Americans. We should quickly reform the system to eliminate ALL tax loopholes and subsidies and provide equal opportunity to insured, interest-free capital credit to finance the FUTURE building of an economy that can support general affluence for ALL Americans.
What we need is for the Federal Reserve to stop monetizing unproductive debt and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets, The shares would be purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable goods and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy. Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance back by the government, but would not require citizens to reduce their funds for consumption to purchase shares. ALL subsidized loan guarantees would have the stipulation that the companies benefiting from the loan infusion demonstrate NEW owners be created among their employees and others in which ownership shares are purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets.
We need to lift ownership-concentrating Federal Reserve System credit barriers and other institutional barriers that have historically separated owners from non-owners and link tax and monetary reforms to the goal of expanded capital ownership. This can be done under the existing legal powers of each of the 12 Federal Reserve regional banks, and will not add to the already unsustainable debt of the Federal Government or raise taxes on ordinary taxpayers. We need to free the system of dependency on Wall Street or the accumulated savings and money power of the rich and super-rich who control Wall Street. The Federal Reserve System has stifled the growth of America’s productive capacity through its monetary policy by monetizing public-sector growth and mounting Federal deficits and “Wall Street” bailouts; by favoring speculation over investment; by shortchanging the capital credit needs of entrepreneurs, inventors, farmers, and workers; by increasing the dependency of with usurious consumer credit; and by perpetuating unjust capital credit and ownership barriers between rich Americans and those without savings. The Federal Reserve Bank should be used to provide interest-free capital credit (including only transaction and risk premiums) and monetize each capital formation transaction, determined by the same expertise that determines it today––management and banks––that each transaction is viably feasible so that there is virtually no risk in the Federal Reserve. The first layer of risk would be taken by the commercial credit insurers, backed by a new government corporation, the Capital Diffusion Reinsurance Corporation, through which the loans could be guaranteed. This entity would serve to seed the new policy direction and would fulfill the government’s responsibility for the health and prosperity of the American economy.
Our political leaders, academia, and the media fail to understand that our financial system has resulted in a fundamental imbalance between production and consumption. We have ignored the systematic income inequalities that persist and grow exponentially due to the steady progress of tectonic shifts in the technologies of production, shifting productive input from labor to the non-human factor of production––productive capital, as generally defined as land, structures, human-intelligent machines, superautomation, robotics, digital computerized automation, etc. Productive capital assets are OWNED by individuals and, respecting private property principles, those individuals are entitled to the earnings generated by such assets.
The significant problem has been the systematic denial of participation as capital owners on the part of the majority of consumers. While the wealthy capital ownership class has essentially rigged the financial system to their benefit, and by that is meant to continually concentrate ownership of productive capital among the richest Americans, the majority of Americans have been and are dependent on JOB CREATION. Yet, none of our political leaders, academia or the media addresses this imbalance with the richest Americans entitled to income growth associated with productive capital ownership and the majority facing further job losses and degradation due to technological advancement.
Ordinary Americans of so-called “middle-class position” have used consumer debt financing as a means of bettering their life with an abundance of consumer products and services. The government has used income redistribution via taxation and national debt to prop up the economy with monies spent on supporting a massive military-industrial complex comprised of a small group of owners and millions of “employed,” and various social programs to uplift the American majority’s life and prevent their decline into poverty––supported by government dependency.
The ONLY way out of this mess, if we are to not become a complete socialist or communist communal state governed by an elite class, is to embrace growth managed in such a way that EVERY American is empowered to acquire over time a viable wealth-creating, income-producing capital estate and pay for their acquisition out of the FUTURE earnings of the investments. Such is the precise means that the richest Americans continually advance their wealth and thus, income.
We need leaders who will put this issue before the national debate stage, and we need the media to put forth the questions whose answers will provide the financial mechanism specifics to reverse the ever dominant OWNERSHIP CONCENTRATION. Such concentration and the economic power that result is taking control of our representative government, with productive capital ownership channeled through plutocratic finance into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.
We are absent a national discussion of where consumers earn the money to buy products and services and the nature of capital ownership, and instead argue about policies to redistribute income or not to redistribute income. If Americans do not demand that the holders of the office of the presidency of the United States, the Senate, and the Congress address these issues, we will have wasted the opportunity to steer the American economy in a direction that will broaden affluence. We have adequate resources, adequate knowhow, and adequate manpower to produce general affluence, but we need as a society to properly and efficiently manage these resources while protecting and enhancing the environment so that our productive capital capability is sustainable and renewable. Such issues are the proper concern of government because of the human damage inflicted on our social fabric as well as to economic growth in which every citizen is fairly included in the American dream.
Support the Capital Homestead Act (aka Economic Democracy Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.
