Bacon's Rebellion

Democracy Thrives in Sunlight

Siding with the Least Greedy Bastard

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by

James A. Bacon
in ,

Tesla Model S -- roughly $30,000 in subsidies per car sold.
Tesla Model S — roughly $30,000 in subsidies per car sold.

by James A. Bacon

Elon Musk has a gift for spinning fabulous visions involving super-cool technology — everything from solar energy and rocket ships to high-speed rail and electric cars. But he has also mastered the art of scrounging money from government. According to a year-old Los Angeles Times article, his enterprises had racked up some $4.9 billion in government subsidies.

So it is with mixed feelings that I read that Tesla is applying to open a second store in Virginia, this one in the Richmond area, against the opposition of the Virginia Automobile Dealers Association. The auto dealers fought Tesla’s application to open a store in Fairfax a couple of years ago on the grounds that long-standing state law prohibits automobile manufacturers from owning dealerships in most cases. Musk won that round — I’m not sure upon what grounds — and now he hopes to win again.

Whom does one root for — the big, fat, out-of-state crony capitalist or Virginia’s little, skinny home-grown crony capitalists?

On the one hand, I oppose laws prohibiting auto manufacturers from selling their own cars directly. Such restrictions benefit a select class of multimillionaires — local auto dealers — from competition, probably at the expense of the consumer. Therefore, I think, let Musk open his second Tesla store.

On the other hand, I think, dude, haven’t you benefited enough from manipulating the government? Isn’t $4.9 billion enough? Back away from the trough and leave something for the smaller piglets! Writes Phil Kerpen in National Review:

Every time a Tesla is sold, we witness a transfer of wealth to a rich hobbyist (most Teslas are their owners’ third or fourth car), while average Americans are on the hook for at least $30,000 in federal and state subsidies. Tesla is more a regulatory arbitrageur than an auto manufacturer.

This increasingly represents how the U.S. economy is organized. There are so many subsidies, tax breaks, regulations and exemptions that almost every business benefits from government-provided preferences somehow. If a company doesn’t work the system, then some predator will come along with its lawyers and lobbyists and campaign contributions and put it out of business. You’ve got to lawyer up just to stay alive.

In such a world, I suppose my sympathies go to the least greedy bastards who fleece me the least, whose kid goes to school with my kid, who supports the same local causes that I support, and who circulates his wealth in the local economy, patronizing local law firms, advertising agencies and the like. I suppose I root for the automobile dealers…. although I do so with little enthusiasm.

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31 responses to “Siding with the Least Greedy Bastard”

  1. Cville Resident Avatar
    Cville Resident

    Perhaps you can answer this question: All laws and regulations must have at least a rational basis.

    What is the rational basis for requiring locally owned dealerships rather than direct manufacturer to consumer sales?

    I would be interested to know the answer.

  2. MrMat Avatar
    MrMat

    I have little doubt that eliminating the “middle man markup” that my local Ford/Toyota/ect dealer makes would not go to us in lower prices, it would go to Ford/Toyota/ect shareholders and corporate executive’s pay and bonuses while car prices would remain the same. In fact, I would venture to say that most efficiencies gained in the last 25 years go to shareholders and executives and not the workers or consumers (but that’s another discussion for another day).

    Would I rather that money go to Ford or my Ford dealer? I would say, like Bacon, I’d prefer it to go to my local dealer for the same reasons Bacon outlines.

    However, in Tesla’s case, Musk is trying the revolutionize the way we live on this planet, from electric cars, to the hyperloop, to space travel. I would be fine with the “middle man profits” going to Tesla if it funds further Research and Development to better our lives as opposed a protected class of local millionaires or corporate executives’ pay and bonuses.

  3. LarrytheG Avatar
    LarrytheG

    Epic Fail, Bacon! forget the subsidies for Telsa.

    Ask yourself who benefits if Telsa succeeds in allow direct selling of cars.

    It would transform the landscape for everyone wanting a car – electric or not.

    so you’re so bound up over subsidies to Telsa – that you’re willing to just ignore the bigger issue.

    A man that supports Uber, and dissolving COPN – just can’t put his full support to breaking up this monopolistic preying on consumers in Va because of a separate issue involving subsidies for Telsa.

    Isn’t the current law basically a subsidy to car dealers in Va?

    and you’re fine with coal ash subsidies and mountain-top removal subsidies…

    I swear Jim Bacon – you cannot seem to keep a consistent philosophy here!

    Methinks you pick and choose your positions in a most arbitrary and inconsistent way!

    1. Acbar Avatar
      Acbar

      Re: “It would transform the landscape for everyone wanting a car – electric or not.” Yes, that’s precisely the point. Why do we need auto dealerships? In this age of internet automobile sales via Edwards.com and the like, and independent garages for repairs, what value-added do dealerships provide to the consumer? As recounted earlier, these dealerships were born out of a [misguided?] desire to shield local auto sellers from direct competition from Detroit, as opposed to franchised operations owned locally — these laws came from the same depression-era concerns as urban rent controls and mandatory minimum prices for milk. Why do we still have them on the books in 2016?

      Yes, like others, I have some sympathy for the “little entrepreneur” and the notion of mandatory involvement of local businessmen in the great web of sales that is automobiles. But really! Franchising has not disappeared in most fields just because the centralized business model operated alongside the franchisees. Let this find its appropriate level in the business community.

    2. DonR Avatar
      DonR

      Larry is right.

      If you don’t like the way Tesla operates don’t buy a Tesla. However, if you want to buy directly from a car manufacturer in Virginia – you can’t. Even if you buy the car directly from a manufacturer’s web site the auto will have to go through a dealer.

      Jim, you have a choice with Tesla – the choice not to buy one. You have no such choice with regard to going direct to a typical car manufacturer. You are forced to pay about 6% to 9% more for the car to fund the dealer.

      17,500,000 new cars were sold in the US in 2015. The average cost (for new cars and new light trucks) was about $33,000. 17.5M new cars and light trucks @ $33,000 per car / light truck = $577.5B. Dealers inflated that total by 6 – 9% so let’s use 7.5%. The dealer skim was $43.3B last year alone. Let’s see … about 2.5% of Americans live in Virginia and 2.5% of $43.3B = $1.1B.

      Your “skinny” auto dealers in Virginia extracted $1.1B in rents last year courtesy of the Virginia General Assembly. The auto dealer in Virginia donated $1.5M in 2014 – 2015 to Virginia politicians making them the largest contributing are of the transportation sector. As for other unnecessary crony capitalists in Virginia … wine and beer distributors / brokers contributed $2.7M – almost three times higher than the next biggest area within the retail sector. In Washington state voters cast aside the state liquor stores and rescinded the requirement for retails to buy from wholesalers rather than directly from producers. The crony capitalists came out in droves predicting and explosion of drunk driving problems. Drunk driving arrests went down.

      Until now I doubt anybody ever called Elon Musk lazy. However, he’s an absolute piker compared to the auto dealers and their hand puppets in various state capitals.

      If dealers can convince people that they are better off paying 6 – 9 % more for a new car while also enjoying the thrill of opaque pricing, fake negotiations and generally terrible service – great, they’ll stay in business. Just don’t tell me that I have to buy my car through a dealer if I want to buy direct.

      1. James A. Bacon Avatar
        James A. Bacon

        Don, I fully understand your logic. I did write this: “I oppose laws prohibiting auto manufacturers from selling their own cars directly. Such restrictions benefit a select class of multimillionaires — local auto dealers — from competition, probably at the expense of the consumer.”

        While I do have a choice not to buy a Tesla, I don’t have the write not to subsidize his many ventures to the tune of $4.9 billion.

        They’re all reaching into my pocket.

        1. DonR Avatar
          DonR

          I understand your point. However, not all of Tesla’s subsidies reach into your pocket. Nor do all of the subsidies line his pocket. Many of the subsidies to Tesla are state – based with Texas, New York and Nevada making recent announcements to attract Tesla facilities. Some of the $4.9b is credits to the buyers of Tesla automobiles which accrue to the buyers rather than to Elon Musk (although they do effectively make the outrageously expensive Teslas somewhat more affordable and thus raise sales).

          The big point though is that Tesla’s cumulative multi-company subsidy total is about 10% of the annual skim by the auto dealers’ unholy association with state governments.

  4. TomH Avatar
    TomH

    I’m sorry, but this is a really misleading post. The $4.9 billion that is reported includes, according to the article:

    “The figure comprises a variety of government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It also includes tax credits and rebates to buyers of solar panels and electric cars.”

    For not only Tesla, but Space X and Solar City.

    This includes the $7,500 per car tax rebate that goes to each Tesla customer, not to Tesla. This, as are several of the other tax incentives, is intended to incentivize the development of electric vehicles and their associated environmental advantages. It is available to any automobile manufacturer and is capped at 200,000 cars per manufacturer.

    The tax credits counted for SolarCity are the same tax credits available to anyone who installs a new solar panel. Many of SolarCity’s installations are owned by them and the power is sold to the end-user. Therefore, they qualify for the same credit available to any other owner of a solar panel.

    Space X received some tax rate reductions from the school district where its new facility is located but will provide $5 million more in tax revenue to the school district than it would have received if Space X was not there. And this from a private enterprise that is taking the risk to provide far lower cost space transportation than all taxpayers have been funding for services provided by NASA.

    The new solar plant being built in NY for SolarCity will be the largest in the Western Hemisphere and will provide 3,000 new jobs and replace a long closed steel plant and contribute significantly to the local economy. Virginia spends money like this to move businesses from one part of the state to another. If they do develop projects that create new jobs, it’s 30 or 50 new jobs not 3,000.

    The Nevada incentives for the Gigaplant (the world’s second largest building) are to diversify a very one-dimensional state economy. This will provide high paying manufacturing and R&D jobs in a low-wage, service economy state.

    Tesla is selling expensive models now to fund the development of more affordable family-sedan electric vehicles. They have repaid all of the lower than market interest rate loans they received from the government. GM has not yet repaid all of the money it received from the government, yet they are not being criticized. They are probably one of many auto manufacturers that are buying $571 million of environmental credits from Tesla because they sell mostly highly polluting combustion engine cars.

    I do not usually usually support incentives because they tend to hang on too long (as in the case of fossil fuel and nuclear subsidies). But I do support their short term use to help establish useful new industries which is exactly how it is being used here.

    Virginia is demonstrating its backwardness by protecting entrenched but fading business models rather than encouraging innovation and job creation. The Virginia property tax for vehicles is also especially punitive towards electric vehicles. Imagine what a flexible, lower cost energy system we might have if we could incorporate the battery storage of a substantial fleet of electric vehicles into our grid.

    It bothers me that, as a society, we are increasingly disparaging of those who are willing to take a risk to improve our future. How many would have taken the fortune that Elon Musk accrued from his first enterprise (PayPal) and sat on his laurels? Instead, he is risking it all to pioneer a variety of new industries (electric vehicles, battery storage, solar generation, and space travel). Success is by no means guaranteed. There is much to do and many obstacles to overcome. Whether he succeeds or fails, what he has learned will enrich us all. He has released the Tesla patents for use by anyone. That alone deserves our support.

  5. TBill Avatar
    TBill

    This Tesla store “fight” is being waged in many states. I’d probably vote to let them have the store, but I am not losing sleep if they are denied.

    I can’t imagine how high Va. car taxes would be on a $100K+ Telsa Model S or Model X, but I can say those car taxes will be far less outside NoVA, so that is one reason why Richmond might make sense as a Va. store location. Car tax is another reason to let them have the store.

    The bottom line is that plug-in cars are very expensive. So expensive, that changes are needed in the way we sell cars to eliminate the overhead car dealers normally charge. Also needed are large subsidies to buyers. Also needed are mandates to sell the plug-ins…the fact that California mandates plug-ins means that manufacturers must sell them, and if manufacturers want to meet their mandate quotas, they need to lower the price of the cars to a price that people are willing to pay.

    So if you’re a consumer, you can get a pretty good deal if you want a plug-in. You are shielded from the high costs which must be absorbed by the automakers, and defrayed by large subsidies to buyers and automakers. In Ca, plug-in sales are high because plug-ins get free HOV access – a major perk.

    Congress/EPA hopes that we will create a new American business superiority in the area plug-in cars, and eventually the cost will come down. I personally see plug-in vehicles as analogous to corn ethanol in gasoline, a mandate and “winner-picking” that Congress cannot resist.

  6. Peter Galuszka Avatar
    Peter Galuszka

    And let’s not forget that Musk and SpaceX had to struggle to break a monopoly big defense contractors Lockheed Martin and Boeing had on heavy lift rockets.

    I do agree with Jim that the state’s ban on direct car sales is wrong. The system to keep the state locked in with the internal combustion engine and the zillion dollar auto parts industry.

  7. TooManyTaxes Avatar
    TooManyTaxes

    How does one differentiate between Tesla Motors and Ford Motors or Chrysler? Tesla can engage in direct sales, but Ford and Chrysler cannot? Why the difference? And what happens if Tesla finds a way to deliver $25K plug-in cars, such that it gets bigger than say a Ford or a Chrysler?

    It’s time to reexamine the auto franchise statutes and come up with ones that make sense in today’s market and treat everyone fairly.

    1. TBill Avatar
      TBill

      Tesla Model3 with 300,000 or more reservations will be in the range $35k after tax credits. Couple years away.

  8. Acbar Avatar
    Acbar

    Jim, you began this post with the assertion, “Musk won [the Fairfax] round — I’m not sure upon what grounds — and now he hopes to win again.” Just so we’re all talking about the same thing, here is what Fortune Magazine said recently about Round 1, which, Fortune says, ended with a settlement:
    “State law prohibits a manufacturer to own or operate a dealership. However, the DMV commissioner is allowed to grant a license if a hearing determines that there is no dealer independent of the manufacturer that can operate a franchise. Tesla was granted such a license through a settlement agreement in December 2013.”

    So Musk didn’t overturn the law, he squeezed through an exception built into the law. As for Round 2 in Richmond, the Fortune article, written in March ’16, continues:
    “Tesla sent a letter to Holcomb in January 2016 requesting a hearing to consider a issuing a license to open a second store in Virginia. A public hearing was scheduled for March 31. VADA claims in the lawsuit that Tesla never informed it about this request, which it argues violates the settlement agreement reached in 2013. In addition to the lawsuit, VADA has sent an official request to stop the scheduled March 31 public hearing.”

    1. James A. Bacon Avatar
      James A. Bacon

      Thanks, Acbar, none of that info appeared in the accounts I read. I’m not sure it changes my position, but it’s useful background.

    2. TooManyTaxes Avatar
      TooManyTaxes

      I don’t buy the argument that there is no dealer independent of the manufacturer (Tesla) that could operate a franchise. There are many dealers in Virginia that could sell Tesla automobile. This is no different from when Japanese and Korean car manufacturers entered the U.S. market – dealer jumped in. Why is Musk getting special treatment?

      Either make Tesla sell through dealers or allow other manufacturers to sell directly. Talk about corruption and special treatment.

      1. Acbar Avatar
        Acbar

        As I recall from the newspapers in 2013, your response is just what the dealers argued; but the parties settled without a court ruling on the facts. Sounds like neither side of that debate really wanted to tackle the big issues in your last sentence.

      2. DonR Avatar
        DonR

        The can sell the car but can they repair it? Beyond the obvious car / gas issue – the Teslas are “computers on wheels” more than cars that can compute.

        http://www.latimes.com/business/autos/la-fi-hy-musk-computer-on-wheels-20150319-story.html

        1. TooManyTaxes Avatar
          TooManyTaxes

          Does a refusal to allow other entities to learn how to repair and maintain Tesla automobiles raise antitrust issues? One can be brilliant and still have trouble with the antitrust laws. Ask Google (in Europe) or Microsoft (Europe and the U.S.A.)

  9. LarrytheG Avatar
    LarrytheG

    re: ” I’m sorry, but this is a really misleading post. The $4.9 billion that is reported includes,…..”

    Yup – Jim lumps ALL the subsidies he does not like into one again ONE company, then quietly ignores all the other subsidies he wishes to “accept” without near the same ardor of opposition.

    and this includes the same electric car subsidies the dealers also benefit from.

    he only mentions Telsa – and then wants to further penalize them alone for the subsidies by not letting them sell direct

    No wonder conservatism these days is so screwed up!

    1. James A. Bacon Avatar
      James A. Bacon

      Larry, try not to misread what I wrote, which was…

      “But he has also mastered the art of scrounging money from government. According to a year-old Los Angeles Times article, his enterprises had racked up some $4.9 billion in government subsidies.”

      Enterprises. Plural. Referring to the previous sentence which enumerated “solar energy and rocket ships to high-speed rail and electric cars.”

      Larry misreads what I write then criticizes me for what he thinks I wrote.

      Learn to read, Larry, learn to read!

      No wonder liberalism these days is so screwed up!

      1. LarrytheG Avatar
        LarrytheG

        ” It was the article in the LA Times that was misleading; attributing all of the various benefits as if the advantages they provided existed only for Tesla.”

        exactly. and Bacon KNOWS THAT.

        But he chooses to bash only Telsa.

        Does Bacon forget the car companies received billions in bailouts -the very same car companies that also benefit from denying direct sales AND they ALSO get subsidies for electric cars?

        Bacon is definitely taking a selective view and essentially giving the entrenched interests like the auto companies and Dominion a bye.

        geeze.

        1. James A. Bacon Avatar
          James A. Bacon

          Everybody gets subsidies, credits, exemptions and/or regulatory favors. That’s the whole point of my post. The whole system is a stinking cesspool of favoritism!

          1. LarrytheG Avatar
            LarrytheG

            can’t argue with that – but Musk has legitimate entrepreneurial roots..using a lot of his own hard-earned money to form new startups… AND break the direct sale monopoly so I see more pluses than minuses and besides he’s a “liberal”! 😉

    2. TomH Avatar
      TomH

      It was the article in the LA Times that was misleading; attributing all of the various benefits as if the advantages they provided existed only for Tesla.

      I am concerned that laws and regulations are being used to protect markets for entrenched interests making it harder for new entries to compete. This is what the auto dealers are attempting to do with Tesla and Dominion with distributed solar. The consumer is the ultimate loser, paying more for fewer choices. Often those who shout ‘free markets” the loudest are those who work hardest for special privileges. Our economic system was built by creative destruction where outmoded ways of doing things give way to better methods.

      1. DonR Avatar
        DonR

        “Often those who shout ‘free markets” the loudest are those who work hardest for special privileges.”

        Jim Bacon, to paraphrase Mick Jagger, “I see a great quote and I want it painted yellow.”

        1. TooManyTaxes Avatar
          TooManyTaxes

          “Often those who shout ‘free markets’ the loudest are those who work hardest for special privileges.” Well stated. Most business leaders believe in competition until it comes to their market.

  10. LarrytheG Avatar
    LarrytheG

    I’m not one who thinks direct sales are “needed” so plug-in cars would be more affordable that the money saved would bring the price down so it’s competitive with non-plug-in cars.

    so I don’t see any linkage between the two issues.

    plug-ins are subsidized to encourage private companies to build them and to work to improve battery technology to bring the price down .. the subsidy is basically an R&D subsidy which is really not that different than the govt paying a researcher to develop ways to reclaim valuable metals from coal-ash or a military contractor to develop a drone – that, in turn, once the technical obstacles are overcome – find it’s ways into the civilian sector as most all govt R&D efforts eventually do …

    I see these as more akin to investments and inducements to further develop and further refine evolving technologies than say – the govt paying farmers to grow food so they can stay in business or food stamps for those in need.

    I could be a deep subject and clearly there can be way too much of it – for really wrong reasons… which is that slippery slope you get on when you get into the govt using tax dollars to subsidize something.

    subsidizing research into technologies that will result in less pollution is also something worth doing – in my view – because the pollution itself is a subsidy – an “in-kind tax” that does have a cost – but more accepted since it has been baked-in already.

    As far as “failures” – anyone who does R&D or knows people who are involved in R&D – KNOWs that failure is present all the time in all R&D work. Like science in general – it’s always 2 steps forward, one step back – what did we learn – back up and re-think how to go forward.

    this costs money.

    the drugs we pay a lot of money for -are paying for R&D… that develops drugs – and if you wanted to measure in terms of failures – the development of drugs has LOTS of failures – and it’s NOT government.

    Finally – if you have employer-provided health insurance – you are involved in subsidies for others – directly. When an employer charges the same price for insurance for each employee – it’s a subsidy because in essence – the employees who are younger and not using their health insurance are paying for the older and sicker who ARE using their insurance. In fact, if it were not for the law – insurance companies would refuse to even offer coverage for some employees. If you want to believe it’s the company that forces the insurance company to charge one price for all – you can believe that (wrongly) if you want to – but even then why should the company require some employees to subsidize others in the first place rather than pay according to their claims experience like we do for auto or homeowners insurance?

    If you live in a rural or even a suburban area – you are undoubtedly enjoying subsidies for electric and phone service.

    If you have water/sewer service – the cost to provide service to each house can vary considerably according to things like terrain and density and other factors – yet they typically charge the same for both hook-up and service.

    1. Acbar Avatar
      Acbar

      “I[t] could be a deep subject and clearly there can be way too much of it – for really wrong reasons… which is that slippery slope you get on when you get into the govt using tax dollars to subsidize something.”

      Yes; of course.

      But you’re jumping all over Jim for highlighting this particular example of overdone subsidies. Isn’t that the whole point of this post? Musk’s customers are portrayed in the press as geeky, stingy consumers of autos of the future, yet in fact they are profligate consumers of luxury goods and extravagant sets of multiple cars, and those from Tesla qualify for tens of thousands of dollars of government subsidies! So, the government is underwriting the cost of luxury goods? There’s at least irony in that, worth noting!

      We all agree, I think, that a government subsidy for R&D or a start-up business may be warranted. We agree, there are subsidies all over the place. We probably agree, there are way too many subsidies out there. We should enjoy spearing one of them that’s particularly egregious.

      Yet you say, “Bacon is definitely taking a selective view and essentially giving the entrenched interests like the auto companies and Dominion a bye.” Wait, wait: what government subsidy of theirs are you talking about? Those examples you cite aren’t from the government at all; it’s the company itself, choosing to use averaged pricing, which ‘subsidizes’ sales to those customers who are more difficult/expensive to reach.

      Oh yes, there have been government subsidies for the big automakers, too. “But he chooses to bash only Telsa. Does Bacon forget the car companies received billions in bailouts -the very same car companies that also benefit from denying direct sales AND they ALSO get subsidies for electric cars?”

      Does the fact of the TARP intervention make retail government subsidies for any particular consumer product or category of consumer products acceptable? Does a law rescuing a failing bank during a recession mean we can’t criticize other laws that grant economic privileges to favored businesses with good political connections? Even if you think TARP and the auto-maker bailouts were totally unjustified, do two wrongs make a right?

      Just have to say it, LarryG: you’re looking for a BR bias that isn’t there this time; instead, you are displaying your own.

  11. TBill Avatar
    TBill

    The thing about all these green subsidies that concerns me, is all this taxpayer money is going to California. For example, $7500 to each electric car buyer, and these buyers are all in California for he most part (50% or so).

    Currently, the electric car $7500 subsidy to buyers expires when the manufacturer reaches 200,000 vehicles sold. Tesla may reach that limit in a few years, but many observers including me feel Congress will simply further extent these limits. The hope is that electric car demand will eventually increase without subsidies, but we are not getting there as fast as some were hoping.

  12. LarrytheG Avatar
    LarrytheG

    re: ” Just have to say it, LarryG: you’re looking for a BR bias that isn’t there this time; instead, you are displaying your own.”

    naw… Bacon continues to ignore the status quo/baked in subsidies that disadvantage start-up companies whether they be automobile or solar.

    He defends Dominions use of it’s monopoly position to squash start-up solar and he’s doing the same with Telsa – because he gobbles up the right-wing bias against solar and renewables…. while the very same folks have no problems standing by and watching mountaintops removed, mercury spewed over the landscape, coal-ash pits, subsidized insurance for nukes, you name it.

    He loves uber for “disrupting” the taxi “hegemony” but he actually defends the auto dealers doing essentially the same thing the taxi companies do to uber – he defends the auto dealers doing it to Telsa – because he dislikes Telsa and how Telsa uses subsidies themselves.

    so – you are rejected Acbar. there is a ton of right leaning bias in BR.

    People should have the right to buy cars direct – regardless of what Telsa is doing with govt subsidies no more or less than they do with auto dealers who also sell -plug-ins and also get the same subsidies.

  13. LarrytheG Avatar
    LarrytheG

    re: taxpayer money for subsidies –

    I’m not a defender of said subsidies but do point out that some of us are selective in what we recognize as actual ongoing existing subsidies that we take for granted as already “baked-in” – and those subsidies benefit entrenched interests and disadvantage start-ups and suppress what normally would be disruptive market forces of change.

    Long before Telsa and Musk came along -for decades – we have not only paid tax credits for energy efficient purchases but we have allowed investor-owned utilities to use their monopoly power and lobbying to continue to pollute as well as to squash innovation and start-ups from would be competitors – on the premise that they bear the responsibility for the reliability of the grid – and that gives them a bye on pollution – as well as competition.

    I’m not infatuated with the solar/renewable subsidies, quite the contrary and I’d be happy to have them go away – IF we ALSO take away the existing subsidies used by entrenched interests to maintain their govt-granted competitive advantages.

    so I do not assign blame to Telsa/Musk for taking advantage of subsidies especially when Musk has a solid track record as a genuine private-sector entrepreneur – a self-made billionaire who made his money the hard way – he earned it as a start-up – against entrenched banking and retail interests who opposed PayPal and Ebay business models – predictably.

    Solar/renewables are also up against entrenched fossil-fuel and investor utility interests who have used crony capitalism to erect barriers to would-be competition as Dominion Power has with solar and auto dealers in Va have with direct sales.

    Normally – self-proclaimed libertarian types like Bacon side with the “disrupters” like Uber, like Direct Primary Care, reforming certificate of public need laws, etc, etc.

    …. except when it comes to green technology which is still in it’s infancy and evolving – and not quite yet ready to compete on equal footing – perhaps never as long as the entrenched interests continue to benefit from arbitrary laws and policies – de facto subsidies , that continue to disadvantage start-ups.

    saying solar is “too expensive” compared to coal – for instance – just ignores the damage that coal has done and continues to do to the environment – for which we treat as separate “clean up” issues – like mountain tops removed and coal ash pits. these are de-facto built-in subsidies to the entrenched interests – that we actually are supporting when we oppose “subsidies” for renewables.

    If we actually charged in the electric bills for cleaning up the damage – required that no mercury be allowed to be released into the environment – solar would not need subsidies to compete on an equal footing basis.

    it would easily win without any CPP – which is essentially rolling back the de-facto subsidies for coal by requiring stricter emissions rules.

    Musk genuinely believes we should be moving to a cleaner energy world -and he would be pursuing it even without subsidies but he takes the subsidies to actually HELP finance what he is actually using his own money for also.

    why he has opponents like Bacon is beyond me… other than it appears that many continue to have a blind eye with respect to how we already subsidize environmentally-harmful industries and help keep them entrenched with laws that disadvantage start-ups.

    To a certain extent – this is what the CPP is all about – eroding the built-in environmentally-damaging policies and subsidies – and encouraging the advent of renewables – and the big complaint from the opponents?

    well – the “grid” is not designed to accommodate solar that is not “reliable”.

    As if running coal plants 24/7 even when the turbines are not spinning because demand has dropped – is a better approach.

    Here’s a thought. How would Musk set up an electric utility if he could?

    my guess is that he’d build a LOT of solar and at each solar site – he’d also install a gas turbine plant that would run in variable mode – ramping up in real-time whenever solar diminished so that total output remained exactly the same… totally reliable with a lot less pollution, a lot less mountaintops removed, a lot less coal ash disposal issues, and as long as gas is cheap – no more expensive.

    what keeps us from doing this – is what Musk is working on…

    I’d get rid of his subsidies – but I’d also get rid of the investor-owned utility’s subsidies so the competition was head-to-head and the utility industry was subjected to the same disruptive forces we are seeing with other industries.

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