Elon Musk Likes Government the Referee, Not Government the Subsidizer

Here are some especially important passages from the Wall Street Journal transcript of the Elon Musk interview:

Joanna Stern

Well, I want to come back to autonomous vehicles, but wanted to just stay a little bit more on the role of government. You said at this conference, actually, a year ago, that you think the government should really just be hands off when it comes to innovation. Though with this bill, there is a lot of support for EVs and it could be the biggest change that we’ve seen throughout the country in terms of the infrastructure of EVs. And it helps Tesla. What do you think the role of government should be?

Elon Musk

I think the role of government should be that of, like, a referee. But not a player on the field. So generally, government should just try to get out of the way and not impede progress. I think there’s a general problem, not just in the U.S., but in most countries, where the rules and regulations keep increasing every year.

Rules and regulations are immortal. They don’t die. Occasionally you see a law with a sunset provision, but really, otherwise, the vast majority of rules and regulations live forever. And so if more rules and regulations are applied every year and it just keeps growing and growing, eventually it just takes longer and longer and it’s harder to do things.

And there’s not really an effective garbage collection system for removing rules and regulations. And so gradually this hardens the arteries of civilization, where you’re able to do less and less over time. So I think governments should be really trying hard to get rid of rules and regulations that perhaps had some merit at some point but don’t have merit currently. But there’s very little effort in this direction. This is a big problem.

    . . .

Joanna Stern

And I also want to come back to later, I know that you do have some other stance on AI and the rules and regulations we should have on that. But right now you’re sitting in a Tesla factory, how are you spending your time these days? Between the split between Space X and Tesla?

Elon Musk

Yeah, it’s about even between Space X and Tesla. It depends on what is the crisis of the moment. So some weeks will be more Tesla, more Space X. But I work a lot. I work seven days a week and put in some pretty crazy hours. But it really depends on where I’m needed most.

I basically just triage the tasks and try to do things that are most useful or where I’m most needed. It varies from one week to the next.

But just going back to that infrastructure bill for a second, because sometimes the criticism of Tesla is like, “Hey, Tesla gets all these subsidies.” But it’s worth noting that for the vehicle purchase tax credit, the $7,500, Tesla stopped getting that, like, two years ago. Whereas everyone else, I think, except for GM, still gets the $7,500 tax credit. So all of our sales this year and I think last year had nothing to do with the tax credit because we were no longer eligible because we had made so many electric cars.

Tesla has made roughly two-thirds of all the electric cars in the United States. I’m not sure most people are aware of that. So, yeah. So Tesla’s made basically twice as many electric vehicles as the rest of [the] industry combined. And we don’t need the $7,500 tax credit. I would say honestly, I would just can this whole bill. Don’t pass it. That’s my recommendation.

Joanna Stern

What about the support though for the charging network? I mean, there are parts of this bill…

Elon Musk

Unnecessary.

Joanna Stern

No?

Elon Musk

No. I mean, do we need support for gas stations? We don’t. So there’s no need for support for a charging network. I would delete it. Delete.

Joanna Stern

Okay. All right.

Elon Musk

I’m literally saying get rid of all subsidies.

Joanna Stern

And…

Elon Musk

But also for oil and gas.

Joanna Stern

If you think about how this affects your competitors, does that impact some of your view on this?

Elon Musk

I mean, maybe they need it. I don’t know. But I think just generally I’m in favor of deleting subsidies. I mean, when we started Tesla, there were no EV subsidies at all. And gasoline was super cheap. We did not anticipate any subsidies. That came later. And the $7,500 tax credit came as a result, not of Tesla activity, but of General Motors lobbying for it. So I would just say just delete [th]em all.

Joanna Stern

All right. But there are some other good things in this bill that some would argue. I mean, a lot of money earmarked for R&D. Would you want to put that towards something?

Elon Musk

No.

Joanna Stern

Okay. All right. We’re going to move on from the bill, because I think we get what you’re saying…

Elon Musk

Seriously, we shouldn’t…

Joanna Stern

…on it…

Elon Musk

Pass it. In general, if we don’t cut government spending, something really bad’s going to happen. This is crazy. Our spending is so far in excess of revenue, it’s insane. Like, you could zero out all billionaires in the country.

There’s all this anti-billionaire B.S. Well, if you zeroed out all the billionaires, you still wouldn’t solve the deficit.

Joanna Stern

All right, I’ll ask you another question around the billionaire B.S. Say tomorrow you get the phone call from President Biden. Next day, actually, we elect you to Congress. Somehow this happens. You’re now working on tax bills. You’re working on tax policy. How do you tax someone like you? How do you tax billionaires?

Elon Musk

First of all, I pay a lot of tax. I mean, my marginal tax rate is, like, 53%. So that’s not trivial. And then obviously there’s asset-based taxes. The sales tax and everything else. There’s also the estate tax. And generally, I think the estate tax is a good tax.

Like, if you think of assets beyond a certain level that are far beyond, let’s say, somebody’s ability to consume, then at a certain point, really what you’re doing is capital allocation. So it’s not money for personal expenditures, what you’re doing is capital allocation.

And it does not make sense to take the job of capital allocation away from people who have demonstrated great skill in capital allocation and give it to an entity that has demonstrated very poor skill in capital allocation, which is the government. I mean, you could think of the government essentially as a corporation. The government is simply the biggest corporation with the monopoly on violence. And where you have no recourse. So how much money do you want to…

For the full transcript of the Musk interview see:

“Elon Musk on EV Subsidies, Corporate Titles and China: The Full Transcript.” wsj.com Posted: Weds., Dec. 8, 2021. URL: https://www.wsj.com/articles/elon-musk-on-ev-subsidies-corporate-titles-and-china-the-full-transcript-11639012832?mod=Searchresults_pos3&page=1

(Note: the ellipsis in bold was added; the other ellipses were in the original.)

Leave a Reply

Your email address will not be published.