If you’re a billionaire.
Count it out. One billion dollars is one thousand million dollars. If you have one thousand million dollars, $20 million is of the same consequence as losing a $20 under a sofa cushion is to the rest of us.
Elon Musk is reportedly worth somewhere in the vicinity of $23 billion. For him, the $20 million fine imposed by the SEC for fraud amounts to the same as losing a penny behind the sofa cushions for the rest of us.
So, effectively, a slap on the wrist – for fraud. For actually causing harm.
Contrast the kid-glove treatment meted out to Elon with the NKVD-style inquisition visited upon Martha Stewart – a productive woman whose businesses didn’t have a taxpayer pickpocket division
She was vengefully pursued by the feds over what they styled “insider trading” – but were unable to prove in court. They then pursued her even more vengefully for “conspiracy” – which is government-speak for some intangible thing which amounts to we’re gonna-get-you-sucker, for something.
Usually that something is failing to help the government put you behind bars by witnessing against yourself.
So they got her on that – they can get anyone on that – and put her behind bars for it. To ice the cake, they sent her to an especially bleak and distant clink located in Alderson, West Virginia –Â far from her family in New England and contrary to her request to be caged closer to them, at the clink in Danbury, CT. The Department of Justice (sic) denied her request, claiming that caging Stewart in Connecticut would make it too easy for the media to get to her.
No Hotel Graybar for Elon, though. Not even an ankle bracelet. And while he was forced to resign as chairman of Tesla, he’s still not only on the board of directors of Tesla, he is still the CEO – and thus, his punishment is as meaningful as the chump change fine.
Despite his entire enterprise being a gigantic fraud.
Not merely his Tweets.
Consider his shady marketing, for instance. He touts his $35,000 Model 3 – the model thousands of people have put earnest money deposits on – as being “affordable” and by dint of that, the model which will sell in quantity sufficient to make Tesla profitable on its own two legs (rather than depending for profit on its taxpayer pickpocket division – including tax-refund bribes to people who buy Teslas).
The problem is that Model 3 – the “affordable” one – isn’t being produced. The Model 3 which is being produced costs closer to $50k – and Elon charges extra for any paint color other than black.
This Model 3 at least has a range greater than 150 miles (the range of the “affordable” Model 3, which has a weaker – but cheaper – battery pack). He touts the range of the $50k Model 3 – but not the price.
Or the unavailability of the $35k one.
Ordinary car dealers get in trouble if they bait-and-switch customers too blatantly, advertising a low price for a model they don’t stock on purpose to lure people into the store and then hard-selling them the loaded, much more expensive stuff they’ve got on the floor.
A car company which claimed in its official advertisements and public pronunciamentos that it would be selling a new model at a certain price and then only made available the same car (more or less) at a much-inflated price would likewise probably experience rougher treatment than Elon has received.
Keep in mind: Elon took money (deposits) from people for the $35k Model 3 but is only delivering the $50k Model 3. And the value of Tesla stock is premised, largely on the “affordable” but not being made Model 3.
SEC, phone home?
Another scandal not much talked about is Tesla’s infamous lack of support for its cars already in customer’s hands. If you buy a used Tesla, for example, you may find it is not possible to get necessary parts and Tesla service centers won’t touch the car, either.
You’re on your own with a car that no one else makes parts for – and very few can fix.
Tesla also insists on a very creepy de facto joint ownership of its cars, even after they’ve been purchased. Each car remains connected to the Tesla Hive Mind – to get “updates,” as it were but also to assure that Tesla still has operational control over cars it no longer owns but apparently thinks it still does. If you disconnect, the car is no longer supported – which amounts to the same thing as owning car you can’t get replacement tires or windshield wipers for.
All of this – and much more –Â begs the question: Why has Elon been treated so indulgently?
It’s because he is useful to the Oz behind the curtain.
Elon’s role wasn’t – and isn’t – to sell electric cars. His role was – and is – to normalize them and sex them up. To get people used to the idea and to create a an appealing fantasy, in order to get people focused away from the reality of electric cars – which are the tool by which they will be pried out of their affordable (and controlled by them) cars and into something no longer affordable and no longer controlled by them.
It’s genius bait-and-switch, really – one must not grudge a tip of the hat.
Ugly and slow electric cars have been tried for decades – for the past 50-plus years. Affluent virtue-signalers were not interested and neither was anyone else. It was like trying to make Dianne Feinstein a sex symbol. Marketing is powerful, even hypnotic – but there are things beyond its power.
Then along came Elon with his high-performance luxury-sport sedans, which incidentally (but not uncoincidentally) happened to be electric. These did appeal to affluent virtue-signalers, who bought them for the same reason they buy high-end Benzes and BMWs. This created an aura of sex appeal and misdirected the discussion about EVs away from such mundane considerations as whether they are sensible or practical as transportation vs. cars powered by combustion engines.
The media (especially tech-obsessed,metrosexual and climate-change-snuggling urban media) was enraptured by the sexy Teslas, wrote about how quick and “hip” they are. Hype was born.
A manufactured buzz created.
Very few people – about 1 percent of the market – buy electric cars and yet literally every car company either makes one (or several) and soon will be making many more.
Elon made that happen. He manufactured the image and perception of a demand which does not exist but which is absolutely essential to Oz, if his plan to force-retire all cars which aren’t electric and which are under our control is to be realized.
And that’s why Elon gets the kid glove treatment. An indulgent parent finds it difficult to correct his besonderes Kind.
. . .
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Looks like fElon has been hitting the pipe before Tweeting again…
https://www.zerohedge.com/news/2018-10-04/elon-musk-openly-mocks-sec-twitter-calls-them-shortseller-enrichment-commission
So I no longer think he is audacious, just off his nut.
Hi Cold,
Elon is … odd. I’ve listened to him speak a few times. He is inarticulate verging on incoherent. Vague, stumbly train of thought. It is hard to follow exactly what he’s trying to say. Frankly, he does not seem bright to me. It makes me wonder whether he just got lucky with PayPal and has been riding the fumes of that ever since.
I see Elon as the guy who was a hangeron, the group mascot. He went along to get along and had far-out, highly imaginative ideas of little worth to creating something like PayPal and probably nil abilities to actually create it.
It was easier to cut him in than to cut him out since everybody got rich.
I recall that the Feds some seventy years ago went after Preston Tucker for, among the charges, securities fraud, and alleged that the whole Tucker automobile scheme was a grand fraud wherein he’d siphon off investors’ funds to live high on the hog and retire his considerable debts from prior endeavors. Tucker did manage to get acquitted, but the objective, done likely at the behest of one Senator Homer Ferguson whom in turn was in the hip pockets of the Big Three auto makers, was achieved, as the Tucker was essentially killed off in infancy, with only 51 models being produced.
However, even w/o this Government and crony capitalist interference, it’s dubious that the Tucker would have lasted. He was indeed a great inventor and innovator and superb engineer…as a manager or chief of a large manufacturing concern, not so good. Likely at best the Tucker Corp. would have failed on its own, after the initial demand spurred by curiosity died down, and the line and production equipment bought by competitors…who knows? The Tucker might have become part of what became American Motors, which was formed by the merger of Hudson and Nash, and almost then merged with Kaiser-Fraser (which AMC acquired in 1966) AND Studebaker AND Packard. Put all those makes together, and consolidate the lines to eliminate duplication, and you’ve got a strong player against GM, Ford, and Chrysler.
I never knew I could feel so lucky not to have a sofa that I could lose $20 in.
Bodyshops won’t touch these things either, given how danger the battery issue can be. There are some great videos on youtube of people rebuilding salvage Tesla’s and their problems with the factory. One guy got completely cut off from the charger system, while on his long-distance way to a dealer…
Thing is, the very people buying htese, tend to be the tech-rules crowd, that not only doesn’t mind being permanently connected and controlled, but finds that “just dandy”, to quote George Carlin. I bet many of them have a bunch of IOT appliances, and have even turned their whole house into an IOT.
(been waiting for a report of some IOT house being hacked and emptied by high-tech burglars…)
So, nothing to see there.
You also make a great point about the general reason for Tesla’s existence, and that is a very good reason why that stock is likely not going to be permitted to ever go bankrupt.
Same thing happened at WaPo, kept the control right where it’s always been, just with much deeper idc pockets
I don’t support Uncle’s ability to assault, kill, kidnap or cage people even Musk. The existence of the moral hazard comes from the Uncle’s monopoly on the use of force and his ability to pick winners from among these crony fraudsters like Musk. You lay that big of a pile of counterfeit but nevertheless useful money on the table, of course they will come out of the woodwork in great numbers.
Instead of a fine, use the coercion to force him to cut checks directly to people who want out of the fraud instead of to the government and on out to another fraudster.
I agree; any financial penalties assessed against Musk should be paid out to those actually injured, not put into the government treasury or the SEC’s budget.
Reminiscent of the scene in the movie, “The Jerk,” where Steve Martin is at his desk, writing out plenty of checks for $1.97 to everyone that bought one of his products.
The only part where government should come in would be enforcing that he actually writes the checks.
SEC: Swindlers’ Empowerment Cooperative.
Yes, he’s apparently a swindler. He is empowered by his actions to continue to act that way. And it is a cooperative effort between those who make the rules and those who use the rules to buy power.
It is only a matter of time before some new (and telegenic) “visionary” comes along and Elon will be relegated to the dustbin of history. Likely vilified for some sleight toward Uncle in the process.
While I haven’t officially requested my Luddite membership card, I’ve had about enough of these “TECHNOLOGY!!” idiots across the board. This new “Flintstones Vs. Jetsons” commercial Volkswagen has been running to promote a GM “ZEV” has really put me in curmudgeon mode. I just love how Uncle can legally force a company to spend 10 years and 2+ billion dollars promoting someone else’s “TECHNOLOGY!” that NOBODY WANTS. Apparently there aren’t enough of us well read enough to comprehend that even THOMAS EDISON thought the electric car was a stupid idea.
Tesla Motors products have numerous shall I call them basic engineering errors. The lower range TM products do not have smaller batteries. They have the same battery as the other cars. The extra capacity is software locked.
Now when you buy a power tool or a normal product with a lower capacity battery there are fewer cells in it. It’s obvious from either the weight or size of the back or both. That’s because the cells are expensive. The case is relatively cheap but the tooling to make it costs a lot so the lower capacity version often shares the same case but the cell holder isn’t fully populated.
Musk’s wonder cars aren’t like that. They are fully populated packs with software locked capacity. That’s a big reason why they can’t offer the affordable version, because it isn’t affordable to make. They make basic engineering errors or in this case perhaps a marketing error. Maybe they thought they could sell enough after the fact upgrades to pay for it. Who knows? But its basic errors like their first car where the BMS didn’t cut off the car to prevent bricking the battery. Basic stuff over and over again. I’ve never developed a car in my life but I have developed battery powered products and I know better but TM can’t hire someone with this basic knowledge or does and overrides them?
It’s these fundamental errors over and over again that the market would destroy a conventional automaker over. The media viciously attacks them for things that are 3rd order and greater problems. If this, and this, and that then something happens. Very hard to predict and diagnosis stuff. TM screws up the basics and the media largely shrugs.
He’s a 21st century govt. sponsored carpet-bagger, white tuxedo and all. He should be spat upon, and shoved down in a pile of his own horse-shit like Josey Wales did.
Marin Shkreli is still in jail.
I’m waving my hands for Elon. Would not want to ‘trigger’ his fan base. I dislike him, think his cars are overpriced status symbols for idiots, but credit where due, he is really good a gaming the system. Or, more likely, the system is corrupt as can be. But still, respect to him for pulling off all the crap he has gotten away with.
https://www.theguardian.com/society/2018/oct/02/manchester-student-union-to-replace-clapping-with-jazz-hands
But, jazz hands remind me of all the old blackface vaudeville acts. TRIGGERED!!!!!
But he doesn’t get away with anything. He’s doing masters’ bidding. Laws are for people and those who do not go along with masters’ desires or who have outlived their usefulness. And in some cases, have offended the underlings and aren’t important enough for our betters to step in to stop the attack.
What’s particularly despicable about Musk is that he had the choice not to be crony. Not to be one of these utopia builders that see themselves as having the right to engineer society by virtue of their wealth. He could have chosen the righteous path and had a car company and a space company on his own dime but instead he decided not to.
Not sure he is a pawn, but also not sure he is not.
Form outside, to me, it looks like he has gotten away with plenty. But sure, it could be that he is protected as an agent of ‘them’. The stuff he gets a pass on certainly supports the theory.
I still can respect the audacity. But then, I have absolutely no skin in the game, unless my government somehow started supporting his money pit.
To me, this is just ‘Reality TV’, something fun to watch. I don’t have cable.
As a car guy working in financial services you cant imagine how much this sort of shit pisses me off. The amount of training we have to do on “market manipulation” etc… you cant imagine. Here he has pulled something an ideal example of market manipulation 101…. and he gets away with hardly a slap on the wrist…. he is definitely protected, no other way around it….
all laws are selectively enforced and when enforced selectively punished.
He is protected like all billionaires are…because he is a billionaire. His “genius” (lol) is heavily subsidized and supported by taxpayers money. It’s modern capitalism here in the US. It’s easy spending opm, and stockpiling your own income. He gamed and is using the system and if and when convenient, the gov will out him when they are done using him.
Hi Chris P –
I plan to address the issue of corporations from a Libertarian point of view in a column; look for it soon.
eric, I hope the SCOTUS decision to classify corporations as individuals will be addressed. The entire point of corporations, as you know, was to avoid personal responsibility. What SCOTUS did was stand it on its head, totally immoral and unConstitutional. Of course the sheeple just shrugged and took it in the ass as usual. They (SCOTUS)don’t even drag their feet on decisions such as this now, it’s full-bore insertion, no KY needed.
this is one of the main problems today. when I was young 90% of the people would spit in musks face if they could otherwise denounce him. today being most people are fat last POS where a guy like him is lauded for conning and ripping off people