The New Barnum

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The Latin proverb audentes Fortuna iuvat is usually translated into English as “Fortune favors the bold.” It has been used by a variety a martial organizations in the West over the centuries. For example, it appears on the regimental insignia of the 3rd Marine Regiment. The British SAS uses “who dares wins” as their motto. The American idiom, “he who hesitates is lost”, is a mistranslation of Cato, but again, the appeal is obvious so it’s easy to see why it has become common.

The point being is that acting boldly has always been seen as a benefit. We associate it with the successful. It’s why mothers tell their sons to stand up straight. It’s why fathers teach their sons to have a firm handshake. The confident guy, who bounds into a room and takes charge will get little push back, because people naturally pick up on his confidence. Boldness is an essential element of leadership. Men will follow a leader who is confident, even if they have their private doubts about the plan.

Boldness is also a good way to rob people.

Victor Lustig was a confidence man living in Paris after the Great War. He read in the newspaper that the city was having trouble maintaining the Eiffel Tower. Lustig came up with an outlandish scheme where he would use that story to sell the Eiffel Tower for scrap iron. He forged some documents and cooked up an elaborate story about how he had been tasked to secretly find some buyers. He found some interested parties, had them picked up in limousines for a tour of the Tower and then convinced one of them, Andre Poisson, to make a bid.

That sounds quite ballsy, but he went further. Poisson’s wife suspected that Lustig may not have been on the level. Lustig decided to use this to his advantage so he met with the couple and confessed that he was actually a government employee, not an agent hired by the city. He made it clear that he was not paid well and was hoping to improve on that by finding the right buyer. In other words, he wanted a bribe. This sealed the deal and Andre Poisson, not only bought the Eiffel Tower, he paid Lustig a bribe to do it.

Every time I see a story about Elon Musk, I think of Victor Lustig. The reason for that is Musk often turns up in the news attached to some bold new scheme to do something most people see as futuristic or massively complicated. He’s sort of a Phileas Fogg, that is always announcing some grand new adventure. The publicity stunts have no real bearing on his alleged project, but he puts a lot of effort into getting public notice for them. There is a P.T. Barnum quality to it that does not quite square with the official story.

The tunneling under Los Angeles story is a good example. There’s nothing new about this idea. The Crossrail is a giant rail tunnel under the city of London that was done using boring machines. It is a 26-mile tunnel that was threaded between the exiting tunnels under the city. There was a recent documentary on it, which is probably where Musk got the idea. The London tunnel is an amazing bit of engineering because there’s a ton of stuff under the city that the tunnelers had to dodge as they dug the thing.

That’s not to say doing such a thing under Los Angeles would be easy, but it is hardly a brilliant futuristic idea. In fact, people have suggested this in the past, but such a project would require tens of billions in tax money. More important, there’s no real reason to do it, other than the fact California is a failed state so building roads and bridges the old way is impossible. Musk is levering that reality to propose his futuristic “solution” for the transport problems of Los Angeles. What a guy!

That’s probably the point of the hype. Tesla, Musk’s one big “successful” scheme is entirely dependent on tax dollars. Take away the subsidies and it goes bust. The same is true of the battery schemes, the solar plant, the space program. According to the LA Times, Musk has netted close to $5 Billion in government money. Not all of it is tax money, of course. A lot of it comes in the form of grants for research and credits for doing government approved projects, like making solar panels. It’s not unreasonable to say the Musk is a tax sink.

There’s also a good chance that like Lustig, Musk works both sides of the street. He gets a bunch of attention for some new project, like digging a tunnel under Los Angeles. He then gets investors lined up, promising tax schemes that will multiply their investment, in addition to getting government support for the project. Since Musk appears to have skin in the game and is wildly confident his plan will work, investors line up. Once it all comes together, Musk is a minority share holder, but in full control of the project.

The formula is to use the media to promote the idea to the public. He then gets some other billionaires to back it on condition that Musk can get the government invested. That is used to pure the state into the scheme, which seals the deal with the private equity guys. From there it is just a churn as Musk and his buddies get their seed money out with interests as new investors demand to get in on the action. Since these projects take decades, the risk of it unraveling in the short term in minimal.

The best part of a scheme like this is he can get his seed money out early and still have equity in the new project. The investors and the government are on the hook and they will keep putting money into it no matter how many times a Space X rocket explodes or a Tesla bursts into flames. That’s not to say Musk is a con man like Lustig. The main difference is that Lustig was breaking the law, while Musk is well within the law. In fact, his innovation is to make the law his partner.

Musk is a modern incarnation of P.T. Barnum, pitching the attractions of the technocratic state via public-private partnerships. Barnum would find exotic acts to put inside his act, while Musk finds big technology projects. Instead of getting the public to buy a ticket to see the bearded lady or wolf boy, Musk gets the public to support the expenditure of public funds for his latest whiz bang idea. In the process, he and his associates get an exclusive investment opportunity and make millions from schemes that tend not to result in much of anything, other than hype.

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99 Comments on "The New Barnum"

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King George III
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I have always failed to understand why people single out Elon Musk for selling, of all things, hype. The man created a line of electric cars that totally outclass the competition, and compete extremely favorably with petroleum-fueled cars, and, oh yeah, started the first successful car company since god-knows-when to do so. The man single-handedly reinvigorated space as a thing. Think of it: since the Space Shuttle was retired half-a-decade ago, if America wanted to get into space, we called up Russia and politely asked them for a ride aboard one of their Soyuz rockets. And paid—handsomely, probably—for the privilege.… Read more »
Member
Because of this: http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html It’s not unique to Musk. Lockheed, Boeing, and other large military/industrial companies do the same thing. The difference is that Musk is an actual person, so he’s easier to “single out”. That being said, I have only limited issues with what Musk does. This is actually one of those things that the Government should be doing. Like interstate highways and developing space orbital infrastructure. But NOT like the ITER in France which is a government-run boondoggle. There are just some things that individuals and startups cannot accomplish, but which are a net good for society. The… Read more »
notsothoreau
Guest

How many Teslas do you see on the road? I actually saw one yesterday and it’s the first one I’ve seen. How to you expect people to charge these cars, when we aren’t building new power plants to generate the electricity? And how do you deal with the issue of the batteries? Not many folks want to spend thousands of dollars to replace all the batteries in the car.

I like internal combustion engines. it’s a proven technology.

Member
I saw a Tesla the other day. It was a dark, cold, wet day and it was doing 55 mph on a stretch where everyone else was doing 75, probably so he could conserve power to keep his lights, wipers, and defrosters on. I researched this the last time this came up and if memory serves me well, gasoline has 40 times the energy density of the best batteries. And while gas tanks do blow up, they don’t seem to do so with anything like the frequency of Li ion batteries. And while I concede that Hokoda’s argument has merit,… Read more »
LetsPlay
Member

I think it could be done, except for the “green weenies” that seem to be allowed to hold everything up.

Member
It’ll take time, but the “iPhone” nature of the Tesla and similar vehicles will make them broadly appealing. If we tried to put 1,000,000 of those suckers on the power grid next month, it wouldn’t work. But over a decade or two the infrastructure will meet the need. A lot of new construction today (homes) is done with things like fiber and wireless in mind (just like my current house has a lot of late 90’s IT infrastructure built into it…eithernet the main example). IC vehicles aren’t going anywhere anytime soon. But Tesla is ramping up to put 1/2 million… Read more »
King George III
Guest

There are half a dozen within a 3-ish block radius, and I see at least 2 or 3 on the way to the grocery store and back.

LetsPlay
Member

You mean you don’t order online and have grocery delivery right to your door? Oh, the shame!

Sam J.
Guest

The charging issue is a non-issue. Most all the time people charge in the evening. We don’t need any new plants. Actually the large load differences during the day require turning on extra generators during the day. More costly than base load generators. With more charging at night it would even out the load lowering electricity prices.

Member

Charging is a non-issue until you want to drive from Boston to Baltimore or LA to San Fran.

I’m not convinced that you would not need more generating capacity. Utilities are always taking generators and boilers off line for maintenance. If you run the existing ones all day, you still need to build more capacity to acount for increased wear and tear and increased maintenance requirements.

Member

True, however, I was booking a trip to Orlando this summer and the hotel we’re looking at advertises its supercharger charging stations on the hotel property. If you’re driving from LA to San Fran, you’re probably going to stop for coffee and a sandwich along the way. Plenty of time to recharge the car and use the free wifi at the attached restaurant.

LetsPlay
Member

Where does this idea that most people don’t drive 200-300 miles per day? Even if the average number says that is true, the others that do make that kind of trip daily will have a huge hit in delays and other productivity costs waiting for charge time. Yes, the charging issue is a non-issue. We have consensus. It is fact.

Member

75% (ish) of drivers commute less than 50 miles (round trip) each day. You’re going to see more and more companies with charging stations in their parking garages (as the kinds of people who will buy EVs likely are upper middle class and higher types). Charging is a non issue for a huge percentage of people’s annual mileage.

http://www.statisticbrain.com/commute-statistics/

Sam J.
Guest
I agree with you King George and Leonard. The tax breaks are because we as a society think that these type technologies are good for the country. They had these before Musk got into it. I think they are a bargain for Defense compared to $1 trillion for the F35. (I must say I don’t believe all the tech in the E35 is a loser. The electronics seem to be very advanced. It’s the idea of making one plane do a bunch of stuff that screws the whole plane up.) Let’s not even talk about how Boeing is ripping us… Read more »
LetsPlay
Member
Yeah, right! All thanks to his good buddy Barry. He practically kills the US auto industry while wasting resources (firing CEO’s, bailouts and Cash-4-Clunkers), transforms NASA into some Muslim “who knows what” while killing space exploration, and sends billions of tax payer dollars to failed “green” energy projects. The fact that Elon could acquire technologies and designs on the cheap, (he’s a marketing shyster and I’m sure he didn’t design all that SpaceX stuff with his own research and money; the taxpayers paid for most of it via NASA). You think he is great, go ahead, invest your own money… Read more »
Ken
Guest

Your Majesty, you sir, are a sucker.

Joan Of Argghh!
Guest

This way to the Egress…

Member

A+!

George Orwell
Guest

Always thought it was telling; while progs passionately hate corporate welfare, when it comes to Top Welfare Queen Musk, suddenly they discover a hero. Feeding from the public tax trough is okay, so long as you shit out shiny eco-toys priced for the 1%. Progs love the rich and the poor, but detest the tax-paying middle. They must be made to pay for exploding rockets and rich men’s virtue-signaling status rides.

Solomon Honeypickle IV
Guest
Solomon Honeypickle IV

bitter much? Teslas are available to far more than the “1%” especially used.

Al from da Nort
Guest
Z Man; I don’t get the Eiffel Tower Con. Ordinarily, the mark (M Poisson) is enticed by the lure of easy money at somebody else’s expense, sometimes even (supposedly) the con artist’s (Lustig). That’s why it’s hard to cheat an honest man: He doesn’t think that way. So, how was M Poisson going to turn owning the Eiffel Tower into easy money_? Admissions_? Scrap doesn’t pay much and the demolition would have been dangerous and expensive. Surely Poisson would know this. The Brooklyn Bridge Con’s connection between owning the bridge and easy money is obvious: I.e. charge tolls on a… Read more »
Guest-to-Guest
Guest
Musk is obviously brilliant, and next to him Lustig would feel justified in his last official job description, “salesman apprentice”. Just some of the ways that stand out for me: – Appropriated the name of a true genius, Nikola Tesla, to gain credibility by association; – Has the physiognomy and the body language of a TV-evangelist; – Uses enormous, emotionally moving applications for his projects that capture public imagination the same way high-profile stock IPOs do (regardless of their company viability); – Masterfully plays on people’s motivations: the government employees involved in his projects will never scrap them as a… Read more »
Sam J.
Guest
“…he is living life all the while keeping others, who believe that life is a series of problems to be solved, believing that is is actually solving their problems…” The guy works like 100 hours a week. After selling paypal he could have sat on his ass for life but he bet most all the money he had on solar power for houses, electric cars and rocket ships. You people have some serious mental issues with Musk that I don’t understand. I don’t get the Mars thing but I’m very pro space program and he’s moving it along at wide… Read more »
Buckaroo Banzai
Guest

“The guy works like 100 hours a week.” We’ve pretty much established that this guy is a first-class parasite. So you’re arguing that hard-working parasites aren’t really parasites? Funny logic indeed. This is the same logic that Wall Street bankers love to apply to themselves to justify their gigantic compensation. “Look how unbelievably hard we work, look how hard we compete with each other!” they never complete the sentence, which goes, “…in order to loot the productive part of the economy as thoroughly as we possibly can.”

Sam J.
Guest
Your response is completely disingenuous and a huge huckster propped up straw man. You know that what I was establishing was that the criticism of him ““…he is living life..” was foolish. As he “had the life” already. He was already a multi, multi-millionaire. He had to do nothing. He bet multi-millions of dollars on these businesses. NASA didn’t give him a dime until he was successfully launching rockets. He only got solar and electric car money when he sold them. Not before. “…So you’re arguing that hard-working parasites aren’t really parasites?…” You know that that’s another straw man as… Read more »
Lorenzo
Guest

This is the best analysis of Musk’s operation I’ve ever read.

Jay
Guest

Part of it too is he offers different things to different people. Tesla does nothing for me, solarcity too. Spacex and his lure of going to mars does it for me though and if the other two parts fall off down goes spacex. I am kind of forced to support all the myriad parts.

Member
This goes a little bit along with the talk about narcissists and sociopaths the other day. I stumbled across a text I made to someone that had this in it:https://voxday.blogspot.com/2016/08/mailvox-how-can-you-tell.html?=1 Less pertinent to today, but I thought worth posting. I, too think Musk is a bit of a grifter, but a very talented one who may be filling a void that needed to be filled by someone. If that void was going to be filled, better him than T. Boone Pickens, who wanted to cover the face of the country with windmills and transmission centers in a public-private partnership that… Read more »
Guest
Guest

Excellent ZeroHedge article on the con perpetrated against the taxpayer with the blessing of the US government:

http://www.zerohedge.com/news/2016-09-06/how-elon-musk-used-broken-marketplace-play-us-all

Brief summary of start-up finances for Tesla:
$500MM required
Musk: $38MM in VC funding generates $1.4BB payout for Musk
USG: $465MM loan generates $12MM in interest for taxpayers.

Funds from Tesla and prepayment funds from SpaceX were used to bail out SolarCity.

In a sane world Musk would have been indicted. He’s really an example of what Z refers to when he asserts there are no repercussions for the Cloud People.

YIH
Guest

You’re not the only one saying Musk is a (albeit within the law) con artist: http://ericpetersautos.com/2017/01/28/elons-carbon-con-elections-consequences-part-deux/
With Tesla cars his main gambit is pushing ”carbon credits” (on Internal combustion cars) that can be ”offset” with his cars, particularly effective in CA – not to mention the subsidies on every vehicle he sells. The linked article also points out the shell game he’s playing to keep his ‘solar city’ project out of bankruptcy. Will Trump play along or not? I’m not confident he won’t.

LetsPlay
Member

Musk is probably part of the James Baker, who made an appearance today pushing a ‘carbon tax’ scheme, and Al Gore Carbon Tax Scam. These people need to be jailed for outright lies, collusion and false advertising. Grifter is the correct description.

notsothoreau
Guest

Maybe he read PT Barnum’s “The Art of Money Getting” (free on Amazon Kindle). It’s an interesting book

Member

The Musk enterprises are the epitome of crony capitalism. If the NY Times gushes over Musk (https://www.nytimes.com/2016/12/05/business/dealbook/manufacturing-jobs-donald-trump-elon-musk.html?_r=0) then you know he’s fraud.

Samuel Adams
Guest

Reminds me of the confidence game being run in the venture capital markets right now. Suddenly everybody is a “corporate VC”. And getting sold B and C rounds that let the smart guys get their money off the table, lock a profit and likely have all the good liquidation rights buried in their agreements. Won’t end well.

Chazz
Guest

Elon just took advantage of the much bigger con, that being the global warming hoax. When he saw how completely the politicians and their handmaidens, the money men, had been seduced by Algore, he stepped in to “save” Tesla thereby getting a nice free ride on the scam.

Joy
Guest

Waiting for 50 years for someone to take a can opener to the great crony con called “The D”. There is a very rich and savory stew to be exposed; rust belt city where the greatest concentration of wealth vanished without a trace.

Fuel Filter
Guest
These rich idiots who virtual-signal with Teslas or Prius’s have all been sucked into the greatest con ever played on us: GlowBull Warming. They never have the intellectual courage to even ask where all the electricity comes from. Of course, the UN has glommed onto to this fraud and used it as a proxy as the best method of subjugating the masses initially with Agenda 21 and now Agenda 2020 on their stated path to a one-world government.  Google those terms and read up. It’s some real scary shit. While you’re at it buy and read James Delingpole’s short book… Read more »
Buckaroo Banzai
Guest

In a sane world, Al Gore would be apprehended, given a fair trial, and a speedy execution.

Member

Given that civil servants and politicos are generally sluggish, low IQ, dunces any sensible con-man would target them first.

Besides, civil servants and politicos have very, very perverse incentives – the more tax dollars they are responsible for spending, the more they can rake-off, by way of a higher civil service rating, more salary, great expenses and travel, a bigger office and a zaftig new secretary with the big boobies.

Sam J.
Guest
You folks have some serious issues with Musk that I see as completely irrational. Look at just one program that he will save us an ass full of money. The Space Launch System that they haven’t so much as launched a basket of air with,”…SLS program has a projected development cost of $18 billion through 2017, with $10 billion for the SLS rocket, $6 billion for the Orion Multi-Purpose Crew Vehicle and $2 billion for upgrades to the launch pad and other facilities at Kennedy Space Center…” So they’ve spent at least $18 billion and have launched…nothing. Musk is building… Read more »
Lab Guy
Guest

Eric Peters likes to make fun of Musk as well. I don’t disagree Musk is a brilliant guy with some interesting ideas, but he needs to fund these science projects himself.

http://ericpetersautos.com/tag/tesla/

Tesla’s do have great styling but that battery thing is still an issue.

http://www.lowtechmagazine.com/electric-cars/

Too bad that electromechanical battery can’t be built yet, then it would be viable.

https://en.wikipedia.org/wiki/Flywheel_energy_storage

Sam J.
Guest
I agree completely with you on the flywheel storage. They can last decades or longer. Lithium batteries were already there and working. I think flywheels can be built but it would take a LOT of research to make it competitive. If carbon fiber or fused silica comes down it cost it help tremendously and they seem to be. There’s a new strong fiber from trees or brush or any plant stem materiel stem call nano crystalline cellulose that really strong and estimated to get down to a dollar a pound or so. Going to take a lot more production to… Read more »
A J
Guest

Tottaly agree. I’m short TSLA, and right now it’s hurting!

Buckaroo Banzai
Guest

Never go against people who have the capacity to loot the treasury, and have politicians in their pockets. Similar to the old Wall Street adage, “you never fight the Fed”.

NunyaBusiness
Guest
Explain how being paid for services rendered (or progress completed on large items still in construction) is a subsidy. When NASA has the Russians send up a payload, does it not pay them for this service? So what makes the same contractual relationship suddenly turn into a subsidy when the recipient of said payment is a US company? Your blind spot on this issue is the same as your blind spot on the automation/robots in MFG issue. You literally don’t have any idea how much you don’t know, so you assume that you know it all. The electric car and… Read more »
LetsPlay
Member
Forgive me for being skeptical. We have been subjected to so much crony capitalism and corruption these past years, even if Musk is the “real deal” it is hard to get past the defense mechanisms people have, like I do. However, I do see the ideas he is involved with as innovative approaches to problems. Maybe what gets lost here is his having made his initial fortune on PayPal and not being in a mode like Tesla of being the poor inventor using his last pennies scrounging materials to put together a “mock-up” for investors. Instead he has a bankroll,… Read more »
NunyaBusiness
Guest
Tesla and the solar deals might very well be as you say above, the chances and past experience with other companies in those fields say they likely are. However, SpaceX is different, in that instead of founding, getting funding, and then cashing his initial investment out, Musk has continued to add money into SpaceX. His current position is north of $100million right now, which is something like 25% of the entire nut so far. People keep talking about that $500million from NASA, but that’s the value of a contract, not a lump sum payment that they just got dumped in… Read more »
Ken
Guest

Amazing how many people here are making excuses for a con artist like Musk. Who cares that he’s selling snake oil, rockets are cool!! Teslas look cool and go fast!!! Besides it’s just gubmint money, everyone knows that just drops out of the sky like manna from Heaven, so nobody loses, plus did I mention, rockets!!!

Sam J.
Guest
You people are nuts. Whose making excuses. We need a Space program. It’s absolutely necessary for the defense of the nation. Boeing and Lockheed have been given 10’s of billions for new rockets and haven’t launched a damn thing. The only thing they do launch they charge us an arm and a leg for stuff we developed. Musk is doing the same thing at orders of magnitude cheaper. I don’t see any of you making logical arguments based on the needs of the country. If you believe that we should stop all of our space program then I could see… Read more »
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