Hacker News Reader

Comment by hristov | Hacker News Reader

Elon Musk is certainly to be commended but when you talk about him challenging government monopolies, it should be mentioned that the government helped him out quite a bit too. Tesla was bailed out with government loans. AFAIK even his rocket business benefited from government orders, although I think he had to sue the government to get their orders.

View on HN

"Tesla was bailed out with government loans."

Respectfully, can you please cite a source for this assertion?

Emphasis in italics is mine:

"The loans are part of the Advanced Technology Vehicle Manufacturing Program, which provides incentives to new and established automakers to build more fuel-efficient vehicles. Created in 2007 and appropriated in September 2008, the $25 billion ATVM aims to reduce America's dangerous dependence on foreign oil and create "green collar" jobs. The program is entirely unrelated to the stimulus package or the so-called "bailout" funds that General Motors and Chrysler have received." [1]

[1] http://www.teslamotors.com/about/press/releases/tesla-gets-l...

You just cited a source for parent's assertion, although I'm not sure you realize. IIRC the loan came through at a time Tesla was finding it hard to get a loan through other sources. You could argue that Tesla was more deserving of government funds than Detroit auto, but it seems to me the government did bail the company out.

Also see: http://en.wikipedia.org/wiki/Bailout

"You just cited a source for parent's assertion, although I'm not sure you realize."

I disagree with this, because the funds available under the Advanced Technology Vehicles Manufacturing (ATVM) loan program are not related to the Troubled Asset Relief Program (TARP). They are entirely different programs, under different government departments: ATVM is under the Department of Energy, while TARP is under the Department of the Treasury.

"You could argue that Tesla was more deserving of government funds than Detroit auto [...]"

One "Detroit auto" company did participate in the ATVM loan program: Ford Motor Company [1].

[1] https://lpo.energy.gov/?projects=ford-motor-company

I did not say that Tesla participated in TARP. I said Tesla was bailed out with government loans. The phrase "bail out" has generally understood meaning in the English language that is not limited to TARP.

While we're quibbling (and I have no idea why some in this thread have been mentioning TARP), it's not clear to me from any of the cited evidence that ATVM was a bailout. Is someone assuming that all government loans, whether "stimulus" or for some other ostensible reason, are bailouts?

So? If all the competition is getting government help, you'd be stupid not to take it, even if you think that in an ideal situation, nobody would be getting it. After all, in the long run, the government's going to extract way more wealth from you than you get from it.

the government's going to extract way more wealth from you than you get from it.

Only if you assess the value to your business of peace, educated citizens, roads, safe food, etc. at zero.

Ummmm roads maybe, but all that other stuff you mention... the gov't is actually really bad at doing.

Find me one, just one, stateless region in which there is peace, a multitude of safe food, and an educated public.

You can find plenty with a fraction of the military budget.

It's the least they could do for making it so radically expensive to start a new car company in the first place. Not to mention the Feds were giving massive loans to the other manufacturers under the same umbrella (DOE).

Fortunately I doubt the taxpayer will lose billions on the Tesla loan, unlike the GM bailout fiasco.

Fiasco? Even the Republicans fighting in the primaries are having to hem and haw and grudgingly admit that it seems to have worked out pretty well.

I agree, no matter how much any one spins it the bailout of the auto-industry seems to be the right move.

The fiasco is the losing $10 to $15 billion in taxpayer funds part, according to the latest update by the Treasury on expected outcomes to that deal.

How much in lost tax revenues, new unemployment, new Medicaid, and other economic damages would've been incurred by having GM - and the thousands of smaller businesses dependent on its existence - collapse?

I suspect we'd have been in the hole for a lot more than $10-15 billion.

Reply on news.ycombinator.com