Elon Musk and the federal government: a love story


Photo provided by Hdnux.com

Musk (far left) sits in with President Trump on a committee of tech leaders.

Evan Rocha, Staff Writer

As corporations like Elon Musk’s SpaceX make headlines with successive launch after launch, many are starting to explore the idea of using said companies in place of government-managed space exploration through organizations such as NASA. They cite SpaceX’s three internally researched, developed, and manufactured rocket thrusters, as well as their repeated launches from platforms and subsequent safe returns.

Some people advocate for SpaceX to take on NASA’s role, but as a private corporation. However, there is some key information that is often left out of discussions of SpaceX’s success- its massive government subsidies. NASA has been on a steady decline since the last Apollo mission in 1972, and since the final launch in 2011, it’s been in freefall. President Obama further reduced NASA’s budget by 20% in 2013, and currently NASA uses Russian rockets to reach the International Space Station. Regardless, as a governmental organization, NASA’s budget still far exceeds the yearly revenues of most private space companies. NASA had a budget of $19.3 billion in 2016. This budget is too low for NASA, an extremely large organization with many divisions and employees, to plan any significant developments, but it’s just enough to give out to various private companies as a form of government subsidy. As a result, NASA gives SpaceX financial support, and no small amount at that. SpaceX is a privately-owned company, so we don’t know any more about their finances than Mr. Musk chooses to tell us, but we do know that NASA and the US Air Force gave SpaceX $5.5 billion in 2016.

This kind of activity is nothing new for Musk. All of his current major operations survive and thrive at the expense of the American taxpayer. His SolarCity is raking in nearly half of the billion dollars up for grabs in the Buffalo Billion project, a program in New York that is meant to revitalize the eponymous city. His flagship brand Tesla is even more dependent on government support. Each Tesla sold is eligible for a $7,500 subsidy, and greater subsidies and benefits are available depending on state. This is obviously beneficial to the Tesla buyer, but not so much to the rest of the population who indirectly pay this price. Recently, the state of Nevada granted Tesla the largest corporate grant the state has ever given, at $1.25 billion for the construction of a factory, as well as a reprieve from paying state or property taxes for a decade. The goal of this whole deal was for Tesla to be able to take greater advantage of Nevada’s lithium mines, a key component of batteries, especially those used in electric cars. Teslas also get to take advantage of zero-emissions regulations on automobile manufacturers in states such as California. In California, all automobile manufacturers operating in the state are required to sell a certain amount of zero-emissions vehicles per year. Tesla receives four credits for every vehicle they sell. As a result, they sell their extra credits to major manufacturers like GM, Ford, and Toyota for massive profits.

As a result, Tesla, as well as Musk’s other operations such as SpaceX or SolarCity, are in a win-win situation. They receive immeasurable government assistance, as well as indirect help at the expensive of their rivals. There is no inherent issue with developing clean solutions to notably ‘dirty’ industries like power generation, automobile manufacture, or even space exploration. It’s just despicable that certain groups are given preference in a such as a way as to kill competition and promote cronyism. Tesla was already the darling of the previous presidential administration, and he’s recently been added to a committee of tech industry leaders by President Trump. Space exploration in particular should be an industry free of profit or investment concerns, and should remain an exclusively government entity. If private corporations do arise, then they should be considered based on their own merits and not be bottle-fed by state and federal governments.