Cronyism and corruption have helped Elon Musk build three heavily subsidized companies Cronyism and corruption have helped Elon Musk build three heavily subsidized companies[/caption] Steve Jobs did it the right way. He invented products, such as the iPod or the iPhone, that were far superior to what was already available that they rapidly grew in demand and dominated the market in their class of products. Apple made billions selling tens of millions of iPods and iPhones, making Jobs (and Apple stockholders) quite legitimately wealthy in the process. But Elon Musk, who has followed a clearly different route on his way to becoming worth an estimated $13 billion, is clearly no Steve Jobs. Elon Musk has followed an entirely different path to wealth, one that involves creating three companies of which two them are not economically viable nor have they won significant market share for their products while the third is entirely dependent on government largesse for its very existence. Musk’s company that makes electric cars, Tesla motors, loses between $4000 to as much as $14,700 per car it sells for well more than $70,000 each. Tesla has lost almost half of its overall value since the end of last year. Musk has worked out a deal with the government of Nevada to get $1.3 billion to make batteries for the Tesla cars while he convinced California politicians to subsidize Tesla $126 million to develop energy storage technology. Federal and state politicians, who want to convince the voters they are supporting such “cool” environmentally beneficial projects like building expensive luxury electric cars for the very wealthy who can pay more than $70,000 for them, are the best friends Elon Musk can find to help build his business dreams at taxpayer expense. In total, Tesla has received about $2.391 billion in government benefits. Even better than Tesla for convincing politicians to hand over taxpayer money to Musk and is cronies is his solar panel company called SolarCity. In the last year, the failing SolarCity is fast going the way of Solyndra, having lost more than 60 percent of its overall value. This is despite getting more than $2.5 billion in subsidies from state and federal governments. Elon Musk has leveraged great relationships with politicians and other cronies to build his heavily-subsidized companies and that is no more true than in the case of his third company, the space exploration company SpaceX. Arizona Republican Senator John McCain worked tirelessly on behalf of Musk, who has received many donations from Elon Musk. McCain not only worked hard to make SpaceX could bid for NASA and U.S. Air Force launch contracts, but he changed the rules of the process to block United Launch Alliance (ULA) from bidding, which assured SpaceX the monopoly on those contracts since no other company is currently qualified to provide such launch services. This virtual monopoly on U.S. government space launches, thanks to Sen. McCain, had brought in $5.5 billion in contracts to SpaceX. With an insider connection and pipeline to that much taxpayer money, there is no way SpaceX could be anything but profitable. As a result, the Department of Defense’s Inspector General is investigating allegations that McCain corruptly worked with Musk to outlaw use of the Russian-made rockets used by ULA. The McCain-Musk relationship is not the only one in which Musk’s support for key politicians has netted subsidies and contracts for one or more of his three companies. Musk took notice. A prolific political donor, he began pouring money into the campaigns of key state lawmakers. On November 7, 2012, he donated $1,000 to state representative Rene Oliveira (D). Two weeks later, he gave state senator Eddie Lucio Jr. (D) $2,000, The Washington Free Beacon reported, “The next month, the Associated Press reported that Lucio and Oliveira were working to secure state backing for a potential SpaceX launch pad in Brownsville.” Likewise, Texas state senator Tommy Williams helped get funding for a SpaceX project into the budget, not too long after Musk had given $2,000 to Williams’ campaign. A $1,000 donation to Jim Pitts, the chairman of the Texas House House Appropriations Committee, no doubt helped the cause as well. It is not Musk’s first foray into the political process. Two of his companies, Tesla Motors and Solar City, have received extensive backing from the Department of Energy. As in Texas, Musk has made high-dollar donations to major national politicians, including President Barack Obama,” The Washington Free Beacon reported. Musk will donate money to politicians of both parties to advance further subsidies and corporate welfare for his business interests. He has given, since 2003, a total of $258,350 to Democrat politicians and $261,300 to Republican politicians. He’s even given money to Barack Obama when he ran for the Democrat nomination for president as well as Lindsey Graham, who earlier this year ran for the Republican nomination for president. Additionally, Musk also gave donations to Hillary Clinton and Marco Rubio. Additionally, his companies have their own PACs that donate money to politicians, such as the SpaceX PAC that has donated more than $90,000 to friendly politicians. A long list of corporate cronies have invested lots of money to Musk’s companies as well, including Honda, Goldman Sachs, Google, US Bancorp, Citibank, Bank of America, and Credit Suisse. They might never get a return on investing in SolarCity or Tesla, but Musk has become a billionaire himself without those two companies ever having established enough sales of their products in the open market to consistently turn profit margins. Elon Musk has found lobbying for and getting billions in corporate welfare to be a far more effective way to become a billionaire than inventing a product that millions will purchase on the open market because it’s better than what the competition sells. If a Tesla Model S car sold more than Mercedes-Benz and BMW, it would have come about without the billions in corporate welfare, and Musk would quite legitimately have earned his billions. If SolarCity sold more solar panels to homeowners, Musk wouldn’t need the cronies and corporate welfare to build that business in a force that would dominate the market and earn billions in revenue without subsidies. With the cronies, connections, and government subsidies costing billions to state and federal taxpayers, Musk’s business empire would likely not exist.]]>