J. Dylan Sandifer of the The New Republic has written an excellent piece titled, “The Tesla Secret That Exposes Elon Musk’s Whole Game.” The author explains that Musk’s Tesla fortune was built on the exploitation of regulatory credits (a form of taxpayer subsidized corporate welfare) that enables him to sell credits to other automakers that have failed to meet emission standards:
“In the first nine months of 2024, 43 percent of Tesla’s net income came from selling credits to other automakers that hadn’t met emissions standards. It’s not innovation that’s keeping Tesla’s finances afloat; it’s a rigged system that Musk is milking for everything it’s worth. And all the while, he’s using his newfound power as Trump’s unelected co-president to gut the very government programs that provide working people with a fraction of the support that he’s quietly pocketing.” To wit, newrepublic.com/…In other words, while Musk denigrates and hopes to end the entitlement programs that hard-working Americans have contributed to, he has squeezed the public purse like a leach sucks out blood. Sandifer argues that Tesla’s stock prices were buoyed by the regulatory credits which enabled him to use those stock values as collateral for loans to maintain cash flow. Instead of running a company efficiently and providing a good product for which there is inordinate demand, his profits were enabled by the lawmakers who failed to close the regulatory loophole.
Sandifer does however, see light at the end of the gloomy tunnel:
“ Tesla’s stock is plummeting—down nearly 40 percent this year—due to increased competition, battery technology falling behind, and Musk’s erratic behavior scaring off investors. When a company is built on smoke and mirrors, it doesn’t take much for the illusion to shatter.”
The fear is that the oligarchs like Musk, who are entrenched in the corridors of power, will not go gentle into that good night without dismantling the parts of the State that serve the legitimate interests of the people such as Social Security, Medicaid, Medicare, Education, and a truly competitive market etc. His patron, the President and his minions in Congress, might even fashion a “taxpayer funded bailout” for his failing business venture (s). Democrats must close the loopholes in environmental regulatory regimes that transform them into cash cows for oligarchs. Musk’s pet project, DOGE, must be held to account for it serves only to destroy the parts of government that benefit the people while preserving the parts that enrich the oligarch. How many government contracts favoring Musk have been cut for WASTE, FRAUD and ABUSE? This unholy alliance between the State and the Corporation is the essence of fascism and it needs to end.
