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There can be little doubt business people as a type are held in low regard by governments. media, and the academy. In his post on Elon Musk, Streetwise Professor has a good example of why. Musk spends his time trying to get approval and monies from governments, rather than from individuals in free exchange. The bien pensants come to believe all people in business are in the same ways corrupt because that’s all the business folk they see, and they do not have the imagination to realize there is a universe of people in business who want nothing other than to be left alone.
I haven’t written much at all about Elon Musk and Tesla since the middle of last year. I have no reason to change my opinion that the prices of Tesla and Solar City stock were manipulated in April-May, but by the same token don’t believe that their subsequent increases are primarily the result of manipulation. Those stock prices are partying like a 1999-era dot com company. I think the party will end soon, but I don’t know when and I could be wrong.
But my main issue with Musk was not about the stock price. It was about the fact that all of his companies were heavily dependent on government subsidies and support. This support socialized the potential losses, and allowed Musk (and other major investors, notably Goldman) to capture the upside. My point was if his products and business models were so great, he could succeed on his own, by attracting private capital.
One company that I mentioned in passing was SpaceX, his space launch venture. Inevitably, this company is dependent on government contracts, given that a very large fraction of space launches carry government payloads. This is something different from SolarCity and Tesla, where the government is providing subsidies but not receiving any product or service in return. But still, it means that Musk depends crucially on cultivating government support. Government contracting-especially big ticket contracting-is hardly a pristine activity. A firm does not succeed or fail at it primarily on the basis of the superiority of its product, but instead on the basis of its ability to influence politicians and bureaucrats. And a lack of scruple is often a feature not a bug in that regard. …
… The poorest people in Brownsville will not benefit the slightest from the SpaceX venture. But he and his lobbyist successfully importuned the state and county to take taxpayer money and give it to SpaceX by invoking their poverty. It was utterly cynical for a billionaire to extract tens of millions from Texas taxpayers in the name of the poor Mexican Americans of Brownsville.
I know this is the way the game is played. And that’s the problem: the game is cynical and wrong. It is mere rent seeking. Musk is particularly appalling because he is a rent seeker posing as a technological visionary. His businesses all depend on extracting rents from the government, which he pockets. …
Power LIne posts on John Kerry’s sudden realization Assad is not keeping up with his part of the bargain.
We are ganging up on John Kerry this morning. Here’s the thing–Kerry has a number of problems, but the most basic is that he isn’t very bright. He doesn’t have a high enough IQ for difficult work. As a senator, he hid his incapacity by ignoring virtually all of his job duties. As Secretary of State, his ineptitude–one might say shocking ineptitude, if this were not the Obama administration–is being exposed.
Earlier today in Jakarta, having finished bloviating about global warming, Kerry complained that Syria’s Bashar Assad has been “stonewalling” in the Geneva peace talks:
Secretary of State John Kerry on Monday accused Syrian President Bashar Assad of stonewalling in peace talks and called on Russia to push its ally to negotiate with opposition leaders.
“Right now, Bashar Assad has not engaged in the discussions along the promised and required standard that both Russia spoke up for and the regime spoke up for,” Kerry said during a press conference in Jakarta.
Of course he is stonewalling, you fool! He is winning. …
More on Klueless Kerry from Power Line.
I see Scott has already commented on this story, but here’s my 2 cents worth, too:
Let’s see if I’ve got this straight: Secretary of State John Kerry, owner of five multi-million dollar mansions along with a luxury yacht, has seen fit to lecture Indonesians (average income in 2012: $3,420) about why climate change is “perhaps the world’s most fearsome weapon of mass destruction.”
“Because of climate change, it’s no secret that today Indonesia is … one of the most vulnerable countries on Earth,” Kerry told an audience of students at a high-tech U.S.-funded cultural center at a Jakarta mall. ”It’s not an exaggeration to say that the entire way of life that you live and love is at risk.”
Maybe Kerry thinks every Indonesian can marry a rich condiment heiress or something.
Incidentally, according to World Bank figures, Indonesian per capita greenhouse gas emissions are 1.8 metric tons. The United States: 17.6. Like Al Gore, John Kerry’s per capita emissions are surely a multiple of this, which suggests an obvious first step. …
Time to look at the stunning UAW vote in Tennessee. Michael Barone is first of three.
It’s official: The United Auto Workers lost the representation vote at the Volkswagen Chattanooga plant. The cleverly named nooga.com has the story. The vote was close: 89 percent of workers voted, and they rejected the union by a 712-626 vote.
What’s remarkable about this is that the company and the union colluded in trying to get the workers to vote for union representation. The reason is that Volkswagen’s German union, IG Metall, which under German law has seats on the company’s board, wanted to install the UAW as the workers’ bargaining representatives. If you want to see evidence of this collusion, click on the link and look at the expressions on the faces of Volkswagen Chattanooga President Frank Fischer and UAW leader Gary Casteel. These are not happy campers. They still hold out of the prospect of some kind of workers’ council on which the union would represent the workers. But they seem to clearly understand that most of the plant’s employees don’t want UAW representation.
Why not? My guess is that you could sum it up in one word: Detroit. …
John Steele Gordon calls it the “UAW’s Waterloo.”
… as the American economy has undergone profound change in the last sixty years, labor law has not kept pace. The Wagner Act dates to 1935 and the Taft-Hartley Act to 1947. Like the unions themselves they are dinosaurs. So why do the unions continue to have such a large place in American politics while they have an ever-shrinking place in the American economy? The answer, of course, is the “mother’s milk of politics,” money. Unions are the single biggest source of funds for Democratic causes and candidates.
According to Opensecrets.org, of the top ten political donors in the last 25 years, six are unions. And they all overwhelmingly donated to Democratic causes and candidates. The UAW, for instance, has donated $41.7 million over the last 25 years. That’s well over twice what the infamous Koch brothers have donated, mostly to Republican causes. (The Koch brothers actually gave 8 percent of their money to Democratic causes and candidates.)
Of the UAW’s donations, 71 percent went to Democrats and zero percent went to Republicans. The other 29 percent went to organizations not formally affiliated with either party but it’s a safe bet they are left-leaning. Unions can also mobilize large numbers of “volunteers” for phone banks and get-out-the-vote efforts. …
More from Jennifer Rubin.
… The Democratic Party has become reliant on Big Labor to an extent not always appreciated by the voters and pundits. If you look at groups leading in independent expenditures between 1989 and 2014, the Service Employees International Union dwarfs all others ($83 million). In the top 15, 11 are labor unions. There is nothing to match the boots on the ground, phone banks and “volunteers” unions can enlist, almost exclusively for Democrats.
Despite its political power, or maybe in spite of it, Big Labor is dissolving in the workplace. From a high in the 1950s when membership peaked at 35 percent of the national workforce, only 6.7 percent of private-sector workers were unionized. If not for public-sector employees (about 35 percent), Big Labor — with all those dues-paying members — would be kaput. And even there, as we saw in Wisconsin, once the closed shop is abolished, employees stream out of public-sector unions.
On Friday Big Labor took a huge hit in Tennessee when, even with the help of management, the UAW couldn’t organize the Volkswagen plant. As the Wall Street Journal editorial board put it, “This wasn’t merely one more failed union organizing attempt. The UAW and its chief Bob King spent years working toward this vote as part of its strategy to organize plants in the American South, and all the stars were aligned in its favor.” That proverbial dog company thought so, too. …
And Jason Riley posts on the speculation president bystander tried, ineffectually of course, to interfere for the UAW.
We may never know for certain, but some are speculating that President Obama‘s attempt to help the United Auto Workers organize a Volkswagen plant in Chattanooga, Tenn., may have done more harm than good.
The union-organizing vote failed, 712-626, despite the fact that VW management had given union officials plenty of time and opportunity to make their case. Moreover, the UAW had the White House on its side. Just hours before three days of voting ended on Friday, Mr. Obama told Democratic lawmakers in a closed-door meeting that opponents of the union’s effort “are more interested in German shareholders than U.S. workers,” according to Reuters.
Writing in the Chattanoogan on Tuesday, columnist Roy Exum pondered “what unexpected role a markedly unpopular Barack Obama may have played in the stunning defeat.” The president’s approval rating is 43 percent nationwide, based on the Real Clear Politics average, but it’s only about 30 percent in the Volunteer State.
When Mr. Obama “tossed in his two cents’ worth in a way that was clearly designed to be leaked, it isn’t that big a stretch to believe the polarizing Prez may have inadvertently swayed a few emotional votes among the solidly-conservative work force,” wrote Mr. Exum
This is (not) the first time that the president has waded into a state issue on behalf of unions, only to find himself on the losing side after the dust had settled. Back in 2011 when Wisconsin Gov. Scott Walker was pushing collective-bargaining reforms that were vehemently opposed by Big Labor, Mr. Obama weighed in on behalf of his union allies. Not only did the reforms pass but Mr. Walker, a Republican, later prevailed in a recall election against a Democratic opponent backed by unions and the president.
At this point, labor might be forgiven for asking the president simply to butt out of such matters going forward.
The Atlantic with a post on how much 401K fees can shrink your retirement funds.
… The answer is a lot more than you think. (No cheating with a calculator before we get to the big reveal). Now, let’s say you contribute $3,000 to your 401(k) every year, which is a little more than the national average, starting when you’re 25. Let’s also say that you’re choosing between two investments: the lowest-cost index fund with a 0.08 percent fee, and a typical managed stock fund with, according to Morningstar, a 1.33 percent fee. And finally, let’s say that, though you don’t know it, they both return 7 percent a year, because, as we saw above, most managed funds don’t beat the market.
This 1.25 percent difference in annual fees adds up to a six-figure difference in lifetime earnings. That’s because you don’t just lose the money you pay in fees. You lose the returns you could have had on the money you pay in fees, too. As you can see in the chart below, this compounding effect doesn’t matter much for the first 20 years or so, but really accelerates after that. If you chose the lowest-cost index fund, you’d have $15,000 more at age 45, $55,000 more at 55, and $159,000 more at 65. That would balloon to $257,000 more if you waited to retire at 70. …
Interesting book on JFK the Conservative reviewed by the Washington Times.
Who would have thought it could have happened?
The scene: A Democrat in the White House is a supply-side tax-cutter (before Ronald Reagan, no less). Moreover, he goes out of his way to condemn communism, and not just the foreign left-wing dictators (That was easy then. Today’s leftists brag about vacations in the Castros’ Cuba.) Beyond that, this president condemned the infiltrators on our own soil. (Today, it would be called a “witch hunt.”)
America, meet the real John F. Kennedy, as viewed by Ira Stoll, revisionist fact-checker. In “JFK, Conservative,” this author and journalist acknowledges the liberal “reforms” the 35th president promised the nation, including education and medical care for the elderly (pre-Medicare, and surely predating today’s wobbling Obamacare). …