5-28-2022
Elon Musk welcomes global recession:
‘it’s been raining money on fools for too long’
The billionaire has received loans and tax breaks to help keep Tesla afloat, now he says other companies should go bankrupt for the good of the economy
Elon Musk:
‘This is actually a good thing.
With the invasion of Ukraine and lockdowns in China putting added pressure on a supply chain that has yet to recover from the ongoing pandemic, many are predicting a global recession.
Elon Musk says bring it on.
“This is actually a good thing,” Musk said in response to a question from a Twitter user.
“It has been raining money on fools for too long. Some bankruptcies need to happen.
In 2008, the company rolled out its only product – a Lotus Elise knockoff called the Roadster. At a starting price of around $80,000, the coupe wasn’t exactly priced to move; 2,450 global sales made Musk’s vision of mass-producing electric cars look like a pipe dream. But a year later,
Tesla received a $465m loan as part of a federal stimulus package –
money that essentially paid for the development and manufacture of the groundbreaking Model S.
Musk, moves those cars with help from considerable tax breaks for electric vehicles.
There’s a reason why Bill Ackerman and other short-sellers bet big on Tesla to fail.
The company would probably be as dead as Nikola Tesla himself if it hadn’t been for the government “raining money on fools”.
Musk also claimed on Twitter that a recession would be good because “companies that are inherently negative cash flow (ie value destroyers) need to die, so that they stop consuming resources”.
From 2010 to 2018, Tesla raised $20bn in capital while producing a negative cash flow of $9bn; 2021 was the company’s first full year of profitability.
Since last August the company has received roughly $64m in incentives to move to Austin, Texas, and build Giga Texas – the spanking new factory that’s expected to produce another gonzo Musk idea, the Tesla Cybertruck.
Musk’s other companies have benefited from corporate welfare schemes too.
In 2015, the LA Times; Musk’s companies had benefited from almost $5bn in government support.
That includes SpaceX, which just landed a $2.89bn contract with Nasa and a $653m air force contract, both in 2021;
and SolarCity, which capitalised on $1.5bn in government aid and haemorrhaged cash too before the solar energy company was absorbed into Tesla –which itself accepted payroll benefits from Donald Trump’s $600bn pandemic stimulus package.
Musk can scold work-from-homers all he wants.
But when it comes to benefiting from handouts and loans, few have been rained on more than him.
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