No, Tesla Was Not "Worse Than Solyndra". For Crying Out Loud.

I like Slate. I really do. It's been around a long time, and it has given us some great political and pop-cultural columns.

I've never gotten the idea that Slate was intentionally trying to create controversy to drive clicks. Until yesterday.

Yesterday, Scott Wooley wrote an article on Slate that was so fundamentally wrong-headed that I have to imagine that he was trolling his readership.

Well, I guess I'll take the bait.

After all, Tesla is the "Apple of the Auto Industry" - a California-based tech company, using component parts from all around the world, that develops drop-dead beautiful, high-tech, high-end "luxury" goods. 

Both Apple and Tesla create objects of desire, on which they make huge per-unit margins. Both companies are trying to fundamentally change entire markets - music, cell phones, computing, and so on with Apple, and for Tesla, it's automobiles.

Tesla's original Roadsters were converted Lotus two-seaters. All-electric super-cars. I first saw one on the Eisenhower Expressway here in Chicago and almost lost it.

I wasn't alone. Every other driver on the road was trying to get a better look. It was like seeing a Ford GT or a Shelby Cobra in the wild. It's not every day you see technology that is literally jaw-dropping. That was one of those moments.

I mean, look at it.

Anyway, back to Scott Wooley's article.

The article, titled "Tesla is Worse than Solyndra: How the Government's Investment in the Car Company Cost Taxpayers at least $1 Billion", is wrong.

Wrong, wrong, wrong. Wooley works in wrongness here the way great Renaissance artists worked in oils or marble. And as of this morning, this mess of an article is still one of Slate's headline articles, just squatting there, reveling in its wrongness.

It's so wrong that I don't believe that Scott Wooley actually believes his thesis. He's trolling for clicks. But it's also mind-poison for people in his readership who look for reasons to hate the government.  

This article is wrong on many levels, the first of which is the idea that the Tesla loan "cost" taxpayers a dime.

The U.S. government made a very large loan (well, not in government terms, but in objective terms, $528 million is a TON of cash) at well-below-market rates -- a loan that Tesla (very famously) paid the U.S. government back 9 years early, with interest.

Wooley conflates "cost to the taxpayer" with the nebulous idea of lost opportunity costs - i.e., what a private investor putting a half-billion into a tech company would expect in return if - as  here - the tech company got real profitable real quick.

In sum, Wooley says that since the government was taking a risk in making a below-market loan, and the risk paid off, the government should have made a bigger profit than the $12M in interest it received.

After all, Tesla is worth $12 BILLION dollars nowadays. Heck, Elon Musk (Tesla's own Steve Jobs) managed to convert the $38M Tesla owed him into stock worth $1.4 billion today.

But while he bemoans the intangible stock option windfall that the U.S. government DIDN'T realize, Wooley completely ignores the very substantial, very tangible benefits that the U.S. taxpayers WILL realize by virtue of having THE transformational electric automaker, on our shores and paying U.S. taxes, in 2013.

The U.S. wasn't "playing the markets" with its loans to Tesla (or its bailout of GM). It wasn't a "get rich quick" scheme. The intent of the Tesla loan (and other loans to green tech startups) was to arrive at our current status quo - the arrival of a billion-dollar tech company, making electric cars cool. 

Tesla's runaway success - fueled, in large part, by the government's timely injection of capital - means that Tesla is going to be paying corporate taxes.  Tesla's employees are going to be paying income taxes. Tesla's employees are not going to be drawing unemployment.

Tesla is going to continue to expand, purchasing equipment, components, buildings. Their suppliers will profit, and THEY'LL be paying more taxes. This is a multi-billion dollar U.S. manufacturing company, which arose from nothing, and which is and will be an engine for economic activity for the foreseeable future. 

This is awesome. 

This is not "worse than" a company getting a loan and immediately going bankrupt. That is a stupid argument. 

So stupid, in fact, that I don't believe that Wooley believes in it - and I can't believe that Slate published it.

Slate posted a "counterpoint" article last night, calling Wooley's piece "provocative", and explaining how it's largely full of crap.

That doesn't exonerate Slate for publishing the original piece - the original, irresponsible, utterly wrong piece. If this click-trolling is Slate's new philosophy, then Slate should be ashamed.


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