Categories
free trade & free markets ideological culture

What the Trillionaire Can’t Do

Elon Musk, trillionaire, billionaire, debt, interest, spending

When Elon Musk took SpaceX public, last week, the value of his stock in the company was said to amount to about $866 billion, which — added to other holdings — makes the “world’s richest man” now a trillionaire.

Capitalism’s first. 

So of course nearly every left-of-center journalist, blogger, and social media warrior decried the enormity of the record.

While “it’s hard to even imagine a trillion dollars” is an honest reaction — it is difficult, just as it is to imagine the projected 2026 federal “budget” ($7.4 trillion), deficit ($1.9 trillion), and the ever-increasing debt — immediately moving from awe to anger is less than honest.

Mr. Musk, Metro UK’s Brooke Davies mused, “could give every single person in the United States a share of his cash, with everyone receiving $2,917.32,” while, if he set his sites a little wider, he could “give every person on the planet a gift, they would receive $121.80.”

What’s less than honest? Elon Musk could not do this. 

Mr. Musk’s wealth is in the company that just took on new investors, driving up his shares. If he started selling his shares, the value of the stock would plummet before he found enough buyers. It is Mr. Musk’s managerial genius and technological vision that is responsible for the company’s success, so any step back from control — even by relinquishing stock — would almost certainly spell disaster. 

And if he vanished off the face of the Earth, our global civilization would feel it.

What Elon Musk’s envious haters do not seem to understand is that Musk succeeds by developing products that people, businesses, and governments are willing to pay big bucks for.

He isn’t exploitative in the negative sense, either. “In total, more than 4,400 current and former SpaceX employees” — “from execs to even welders,” says Fortune — “are expected to become millionaires in the IPO.”

Were Elon’s critics a tiny bit consistent, they’d suggest that Space X’s nouveaux riche welders also cough up unearned wealth. Contribute, evil magnates!

This is Common Sense. I’m Paul Jacob.

Further Reading:

PDF for printing

Illustration created with Nano Banana

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
Thought

Stigler

A famous theorem in economics states that a competitive enterprise economy will produce the largest possible income from a given stock of resources. No real economy meets the exact conditions of the theorem, and all real economies will fall short of the ideal economy — a difference called “market failure.” In my view, however, the degree of “market failure” for the American economy is much smaller than the “political failure” arising from the imperfections of economic policies found in real political systems. The merits of laissez-faire rest less on its famous theoretical foundations than on its advantages over the actual performance of rival forms of economic organization.

George J. Stigler, entry on Monopoly in Concise Encyclopedia of Economics.
Categories
Today

Pig War!

The Oregon Treaty, signed June 15, 1846, established the boundary between Great Britain’s Canadian territory and the United States of America, from the Rocky Mountains to the Strait of Juan de Fuca, using the 49th Parallel as the handy marker. However, the treaty was not exactly clear on the territorial status of the San Juan Islands, so exactly 13 years later, to the day, a war erupted . . . over a shot pig.

An American farmer shot a pig rooting through his garden. The pig belonged to an Irishman. The two did not agree upon compensation, so “the authorities” were called in, with infantry mustering from the south and the Governor of Vancouver Island instructing marines to land on San Juan Island — though the rear admiral in charge refused to comply with the order, on the reasonable grounds that war over a pig was not worth it. Local troops from both sides lined up against each other, each commanded to defend themselves only, not shoot first. All that resulted? Insults. It turned out to be a bloodless war, discounting the pig, so it might qualify as the best war in American history.

Categories
Update

…and then suddenly….

As the federal government’s debt climbs up to $40 trillion, it is time, once again, to mark our place on the march to insolvency, especially as it regards to the one program upon which the most number of Americans rely, Social Security. As the U.S. Debt Clock shows, there are over 63 million Americans retired on the program, over 8 million on the disabled prong of the program, nearly 65 million enrolled in Medicare, and over 88 million people getting Medicaid benefits.

That is a lot of people to support! But are these programs really in financial danger?

Reason magazine helps:

Ernest Hemingway once wrote that there are two ways to go bankrupt: “gradually and then suddenly.”

For Social Security, the “gradually” phase is coming to an end. According to the latest report from the trustees who oversee Social Security, the program will hit insolvency in late 2032 — and, at that point, benefits will be cut by about 22 percent. That moment of crisis is no longer some distant problem to be worried about in the future. Senators elected later this year will be serving their terms when the “suddenly” arrives. 

Eric Boehm, “Social Security Is Going Bankrupt Because Its Benefits Are Too Generous,” Reason (June 11, 2026).

Take a look at the 2026 Trustees’ Report linked to in the Reason article:

Trustees Scott Bessent, Robert F. Kennedy, Jr., Keith E. Sonderling, and Frank J. Bisignano.

What to do about the bad financing? Reason offers the obvious, if chilling, advice: cut benefits. “Benefits to most Social Security recipients could be cut significantly without pushing anyone into poverty. And that’s what should happen. Social Security is a safety net program, not one meant to finance a lavish retirement lifestyle.”

Careful readers might be tempted to note that this is not the usual way that Reason looks at Social Security. Usually libertarians and free-market economists emphasize the ill-designed nature of the program, and blame Congress for how it has handled this core welfare-state institution for nearly a century, in effect castigating politicians for the growing revenue-and-spending imbalances. And that is all very true. However, it is all water under the broken dike. Sunk costs, so to speak. We cannot do anything now about the past.

We have a program, many people rely upon it, many more people want it to carry on doing all the things it has been doing. But very soon some things just will not be possible: like paying retirees at the same rates and with the same consistency as in the past.

This is not magic. Somebody has to pay.

Categories
Thought

Churchill

Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time.

Winston Churchill, speech, House of Commons, November 11, 1947, can be found in Winston S. Churchill: His Complete Speeches, 1897–1963, ed. Robert Rhodes James, vol. 7, p. 7566 (1974).
Categories
Today

Stars & Stripes

On June 14, 1777, U.S. Congress adopted the Stars and Stripes as the United States Flag.

Categories
Update

“For some unexplained reason … this report has been suppressed.”

Greece Surprised, Greek, spending, crisis, debt, EU, collage, photomontage, Paul Jacob, http://cognitivebiasparade.prosite.com/, political, politics

A third tranche of disclosed UFO material was unleashed upon the world this week. But some of the material was of a more mundane interest. Government As Usual, you might say.

The year was 1949, and the U.S. was in the process of trying to rebuild Europe after the second world war. But things were not going well in Greece, as Robert S. Allen (MBS) explained to his superiors:

Secret Report: From time to time this program has related some shocking facts about the Greek Aid Program. This is costing the American taxpayer hundreds of millions of dollars. Disclosures about the incompetence, graft and obstructionism of the reactionary Greek government, and the incompetence, bungling and waste of U.S. officials in Greece — these disclosures have not set well with certain high authorities in the State Department and the Pentagon Building. There has been a lot of muttering. Tonight, this program can report a complete official confirmation of these shocking disclosures. This official confirmation is contained in the report in the hands of the Joint Congressional Committee on the Marshall Plan.

The latest war dot gov slash UFO tranche contains a lot of perfect material for anyone interested in history. And not just about the bizarre unidentified flying object problem. This particular report-within-a-file helps explain why those inhabiting the corridors of power keep secrets: it makes government look bad to tell the truth.

Categories
Thought

Stigler

I do not conceal my lack of admiration for a painfully long list of redistributive measures undertaken by modern governments. Many serve no ethically accepted purpose such as compassion for the needy; indeed, they serve only as recognition of which groups possess or lack political influence.


George Stigler, “The Effect of Government on Economic Efficiency,” Business Economics
 (1988): 7-13.
Continue reading “Stigler”
Categories
Today

A Rhode Island First

On June 13, 1774, Rhode Island became the first British colony in the Americas to prohibit the importation of slaves.

Categories
free trade & free markets litigation U.S. Constitution

Punish Energy Producers?

global warming, climate, hysteria, courts, litigation, lawsuit, socialism, government

The latest attempt to hamper our ability to do things? A series of lawsuits against oil companies for allegedly committing global warming. The plaintiffs want billions and billions to be extracted from these companies for fueling civilization.

Litigation before the Supreme Court, Suncor v. Boulder County, is “one of the most consequential energy cases in decades,” argue Michael Toth and Sarah Harbison in the New York Post. 

Boulder County is just one of many seeking to make oil and gas companies fork over massive damages. 

To whom? Entities like Boulder County.

The high court’s response will help determine the viability of future such litigation and “whether the United States remains an energy superpower.”

Energy superpower status is not what people trying to drive their cars and heat their homes at a reasonable cost are worried about. If the court accepts the plaintiffs’ reasoning, the sky’s the limit as far as the liability of the energy industry. 

And those new sky-high liability costs for gas and oil providers will result in new sky-high costs for you and me.

Looting all of us is fine with lawsuit supporters like David Bookbinder of Environmental Integrity Project. “This is a rather convoluted way to achieve the goals of a carbon tax,” Toth and Harbison claim. “The people who use the products pay for the damage that they cause.”

The Post’s authors urge the Supreme Court to “shut down” this attempt to circumvent the Constitution. And confirm that U.S. energy policy “can’t be dictated by local lawsuits.”

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with Nano Banana & Grok Imagine

See all recent commentary
(simplified and organized)
See recent popular posts