Elon Musk Rejoices in Global Recession: ‘It’s Been Raining Money on Fools for Too Long’ | Andre Laurent
Oith the invasion of Ukraine and lockdowns in China putting further strain on a supply chain that has yet to recover from the ongoing pandemic, many are predicting a global recession. Elon Musk says do it.
“That’s actually a good thing,” Musk said in response to a question from a Twitter user. “It’s been raining money on fools for too long. Some bankruptcies have to happen.
“Plus,” he continued, “all the Covid stuff at home has got people thinking you don’t really need to work hard. Rough awakening incoming!”
That’s tough talk from a man who is said to be worth north of $218 billion, more than anyone else in the world. And that conveniently overlooks the sizable donations Musk himself received in the process of increasing his net worth after investing $6.5 million for a majority stake in Tesla in 2004. How Musk got through economic storms and rude awakenings afterwards?
In 2008, the company released its only product – a Lotus Elise knockoff called Roadster. At a starting price of around $80,000, the coupe wasn’t exactly priced to move; 2,450 global sales have made Musk’s vision of mass-producing electric cars a pipe dream. But a year later, Tesla received a $465 million federal stimulus loan — money that essentially paid for the development and manufacturing of the groundbreaking Model S.
Musk, who is quick to note that Tesla paid off that loan early, is displacing those cars with the help of sweeping electric vehicle tax breaks. And he further benefits from the absence of exhaust emissions from his cars by reselling its cache of carbon credits to high-carbon-emitting rivals under pressure to clean up — at least $517 million since 2015. There’s a reason Bill Ackerman and other short-sellers have been betting big on the failure of Tesla. The company would probably be as dead as Nikola Tesla himself if the government hadn’t “rained money on fools”.
Musk also claimed on Twitter that a recession would be good because “companies that are inherently cash flow negative (i.e. value destroyers) need to die, so they stop consuming cash.” resources”. From 2010 to 2018, Tesla raised $20 billion in capital while producing negative cash flow of $9 billion; 2021 was the company’s first full year of profitability.
It’s not just Washington that has been generous. Tesla also receives state income tax breaks for green vehicles and regularly helps out with business grants. Since last August, the company has received around $64 million in incentives to move to Austin, Texas, and build Giga Texas — the spanking new factory that is set to produce another gonzo Musk idea, the Tesla Cybertruck.
Musk’s other companies also benefited from welfare plans. In 2015, the LA Times estimated that Musk’s businesses received nearly $5 billion in government support. This includes SpaceX, which just landed a $2.89 billion contract with NASA and a $653 million contract with the Air Force, both in 2021; and SolarCity, which capitalized on $1.5 billion in government aid and also lost money before the solar energy company was absorbed by Tesla – which itself accepted the plan’s benefits. Donald Trump’s $600 billion pandemic stimulus package.
Musk can scold all he wants. But when it comes to qualifying for grants and loans, few have been liked more than him.
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