Wealthy investor Doug Derwin is spending a lot of his own money in an attempt to convince billionaire Elon Musk to step down from President Donald Trump’s business advisory council. Why? He doesn’t like Trump and doesn’t think business leaders should embrace the president because, well, he opposes him politically. Whatever the reason, it doesn’t matter; he’s opened the bank vault and is spending liberally to pressure Musk, who may or may not eventually capitulate.
Whatever eventually comes of the pressure, President Trump should not wait to see if Musk will cave and remove him now.
Nothing against Elon Musk, he’s a brilliant man who has accomplished a lot. But Musk is a beneficiary of government largess – billions in taxpayer subsidies – and, as such, should not be part of a panel with access to the levers of government power. The risk is that Musk could urge the president to support policies that fatten Musk’s bottom line with more taxpayer subsidies.
The Los Angeles Times reports Musk’s companies, Tesla Motors, Space Exploration Technologies (SpaceX), and SolarCity were built, in part, “with the help of billions in government subsidies.”
Those companies “together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times.”
With that kind of government cheese finding its way into Musk’s coffers, how much of an advocate for free-market capitalism would he be? The last thing an advisory council on business needs is someone whose businesses are built around the forced participation of taxpayers.
President Trump signed an Executive Order baring White House employees from lobbying for 5 years after they leave government service. So why give someone whose companies benefitted so much from special treatment from the government a seat at one of the most important tables, even if they aren’t a government employee?
The president’s business advisory council should be populated by business leaders who not only understand the free market, but who thrive in it. Musk does not.
I wouldn’t be calling for this if he’d forgo all future subsidies and special tax carve outs, but that’s not likely to happen anytime soon.
Musk’s latest venture is a desire to commercialize Mars. He’s said he’d like to get SpaceX to sell commercial flights to the red planet starting by 2024. That’d be all well and good were he not seeking to make his venture a “public-private partnership.”
For those not fluent in beltway speak, public-private partnership roughly translates to the government pumping taxpayer money into a private business to make what they hope to achieve affordable for them, then that company keeping all the profits, should there ever be any. Think of Solyndra as a public-private partnership. Had they not gone bankrupt, taxpayers might not have been on the hook for the more than half a billion in loan guarantees we were stuck with during the Obama administration. But they did, and we were.
Had Solyndra succeeded, taxpayers wouldn’t have gotten a cut of the profits. Taxpayers took the risk, the private sector would’ve kept the reward. The same would be true with Musk’s Mars adventure.
The government should stay out of the business of business as much as humanly possible. That goes for subsidies, special tax credits, and regulations. If Musk wants to sell commercial flights to Mars, more power to him. He should find the money privately to make it happen.
But that’s the problem – with tickets being speculated to be around $200,000 per seat, there’s little chance for a company to recoup the estimated $10 billion minimum investment it’d take to make it a reality. And that’s if it all goes according to plan.
In short, it’s too risky of an investment, at least at this point, for the private sector to invest in. So why should taxpayers take that risk? They shouldn’t. Nor should the man seeking to “partner” with taxpayers have direct access to the president of the United States to lobby for it.
Musk’s Tesla Motors is now the most valuable auto company in the country; his personal wealth is pegged between $13 and $15 billion. He could, theoretically, offer a lot of valuable advice on business to any president. But so much of what he does comes from government tax credits, incentives, and subsidies.
If President Trump wants to seek the counsel of business leaders to learn how to help the private sector grow, good. But he should limit that counsel to business leaders who operate exclusively in it.
Before Elon Musk has a chance to appease those calling for him to step down, he and every member of the council who thrive or survive on “public-private partnerships” or taxpayer subsidies should be invited to leave by the president. There are plenty of business leaders, less well-known and significantly less rich, who could offer invaluable insights into how to unburden the economy because they’re living it.