Elon Musk and Tesla have been in the news lately.  In a recent interview, Musk admitted that the last year has been very hard for him.  On that, I think we can trust what he is saying.

Libertarians have a wide array of opinions on Elon Musk.  It is understandable in that there are some things to admire about the guy and other things to despise.

As a businessman, there is no question that Musk has a streak of brilliance.  Part of this brilliance perhaps is making others think that he is more brilliant than he actually is.  I personally think Musk has been widely overrated, but I still acknowledge that he has certain qualities that are extraordinary that has put him into a position of heading up three companies: SpaceX, Neuralink, and Tesla.

Even if Tesla goes bankrupt, Musk is still a wealthy man in monetary terms, or at least we think so.  Things would have to go really bad for him to become penniless, as he is supposedly worth close to $20 billion.  He has admitted to taking the drug Ambien and perhaps having health issues (probably due to stress), so you don’t know how his life will end up.  But if he survives over the next decade, you have to think that Musk will bounce back in some way, even if Tesla does go under.

Just to recap some happenings from 2018, you will see what a rocky ride it has been.

Tesla has been questioned often in terms of meeting its production goals, as well as some reported investigations of accidents and fires due to, what some claim to be, faulty cars.

On April 1 (April Fool’s Day), Musk tweeted that Tesla was bankrupt.  It was his idea of a joke, I guess.  I think the fact that he sent that out is an indication that it was a joke not far from the truth.

In a press conference in May, Musk got rather nasty, When asked a question, he said, “Boring bonehead questions are not cool.  Next.”  He later apologized.

More recently, Musk, again with Twitter, stated that he may take Tesla private and that he already had funding lined up.  Now the SEC is investigating him, as the CEO of a company is not supposed to make claims meant to hurt those betting against the company.

In other words, Musk is in hot water.  And even if he gets out of the SEC investigation, he still has the actual money problem with Tesla.  The money problem is that the company doesn’t have any, other than borrowed money.  Its production goals have not met expectations and the company just doesn’t seem to be profitable.

Over the last few years, I have come to see Musk as a fraud.  He is a good talker and a good negotiator.  He is a good lobbyist too.

For libertarians, probably the most disgusting thing about Musk is that he lives on government subsidies for his electric cars.  Tesla has been barely able to compete as it is.  If the subsidies from government (taxpayers) dry up, then Tesla really won’t be able to compete.

Right now, the cars made by Tesla are toys for rich people will money to spend.  With the Tesla Model 3, it brings it closer to the middle class, but it is still an expensive car.

I believe the government subsidies will dry up too.  It is pure cronyism.  If we get a good hard recession and Congress is forced to tighten its belt even a little bit, then the subsidies to Tesla are a rather easy place to start.

When Trump was running for president, he was questioned on taking advantage of certain government regulations or tax breaks.  He said he was just playing the game that was set up for him.  For Musk, it is harder to argue the same thing because Musk seems to be actively lobbying for these subsidies.  It is different than if he were just accepting the subsidies without actively promoting them or promoting some other government scheme.

As far as the SEC investigation goes, it was absolutely stupid of Musk to send out the message that he did.  While I am not in favor of the existence of the SEC, he really should have known better.  And I do believe that his only purpose for sending out that message was to hurt short sellers of Tesla stock and to prop up the price of Tesla (which it temporarily did).

If there is one important political lesson to learn from all of this, it is the importance of having a free market without government favoritism.  That means we have to drastically reduce the size and scope of government, particularly at the federal level.

If the government were a small fraction of its current size, then Musk would be forced to compete solely on the basis of pleasing customers.  There would be no subsidies or special favors.

If Musk is a total fraud, then he would not survive in a free market environment.  He would either be unsuccessful, or he would be forced to change his ways or only exhibit his good capitalist qualities.  He would have to meet consumer demand by providing consumers with a product they want at a price they are willing to pay.

I don’t know where Musk will be in five years.  I don’t know if Tesla will be bankrupt or somehow recover.  The one thing I do know is that, as consumers, we would be better off without the government interference.