Elon Musk has received billions in subsidies
While receiving subsidies is nothing new for the Forbes 400 or even multi-hundred millionaire pikers like Mitt Romney, a recent story in the Los Angeles Times (via Good Jobs First) shows that Elon Musk (#34 in the Forbes 400) is a champion at getting subsidies for his companies. According to the Times article, Musk’s three companies, Tesla, Solar City, and SpaceX, have received a total of $4.9 billion (nominal value) in subsidies over the years. The article says that Tesla and Solar City stand out in the importance of the subsidies relative to the size of the company.
While SpaceX has received only $20 million, both Tesla and Solar City have received over $2 billion each, if you count the value of the subsidies their customers have received for buying Tesla vehicles and Solar City installations. This is more significant in the case of Solar City (about $1 billion) than for Tesla (about $321 million). Even without these sums, the companies have directly received about $3.5 billion, most notably for the new Gigafactory in Nevada and for a solar panel facility in Buffalo, New York.
Regular readers will remember that I have long argued in my books and elsewhere that these subsidies represent a transfer from average taxpayers to the much wealthier owners of the companies involved, worsening the already substantial inequality in the United States. These investment incentives have to be offset by higher taxes on others, reduced government services, or higher levels of government debt. While they are not the biggest driver of inequality, they do their part. Moreover, location subsidies reduce the country’s economic efficiency: It may well have made more economic sense to locate the battery Gigafactory as close as possible to Tesla’s assembly plant in Fremont, California.
While Musk refused to be interviewed for the Times story, he responded the next day on CNBC. Among other things, he argued that it was wrong to report a single figure for subsidies, which makes it seem like he received one big check. This is right as far as it goes. However, I think it would make more sense to give a single present value for the subsidies rather than the nominal value, which overstates the value of multi-year subsidies such as those for Tesla. Moreover, as Good Jobs First points out, it is perfectly necessary for taxpayers to know what their long-term liabilities are for multi-year subsidies in order to properly assess the impact on government finances.
Musk also defended the Tesla subsidies as merely necessary to make the project happen faster, rather than necessary to happen at all. Yet it conducted a multi-state auction in an all-too-common use of its location decision for rent-seeking. As I analyzed at the time, the deal was below average in terms of cost per job and aid intensity compared to other automobile facilities, and it is 13 times larger than Nevada’s previously largest incentive package.
Ultimately, the Musk story is far too familiar on a number of dimensions. Most importantly, it is a tale of rent-seeking and the policy/political drivers of inequality.
Cross-posted from Middle Class Political Economist.
We should ramp up a revenue neutral carbon tax over time to level the playing field and phase out alternative (and conventional) energy subsidies. It just makes economic and social justice sense!
Let me say this in the man’s defence — did Musk take financial risks which might have wiped him out with Tesla and SpaceX. Oh boy, did he! Like in classical novels about risk-taking entrepreneurs, not like Gawker posts about Gen-X “visionaries” with advertising-based dedicated search apps conceived in their parents’ basements.
it takes Big Money to start a modern technological enterprise. More than a quick Kickstarter campaign, more even than a consortium of Silicon Valley venture capitalists is going to hand over — SpaceX and Tesla aren’t anything at all like an Apple App.
Do we need more technology these days than we get on our iPhones or laptops? I’d say so. Are we getting it from Ford or General Motors or Philco or Lockheed Aircraft or Bell Laboratories or Sears Roebuck or any other of the traditional innovative powerhouses that we were raised to love and respect as avatars of capitalism. not so long ago. I’d say not. Does our economy or our overall society benefit more from large scale enterprises that profit while giving decent wages to thousands of employees rather than vest pocket-sized firms lucky enough to give billion dollar stock options to a dozen or so developers? An open issue, perhaps, but I’d say Yes.
Maybe Ayn Rand-style capitalism, with business totally isolated from the state, is over. It doesn’t fit environmentalism, after all. Or modern notions of hiring equality or adequate pensions or low carbon release standards or NIMBY-based appearances of buildings. Maybe from demands of scale or sheer liberal idealism we’re sliding back to an era of mercantilism, where business and state are welded at the hip and all the capitalists in sight are cronies. We’ve been here before, and it sort of worked out — all the 13 original American colonies were put in place before Adam Smith wrote The Wealth of Nations.
Think about this, please. I’m trying not to be trolliish.
Mike:
Scanning my book of trolls. Nope, you are not listed. Hard to believe a company can not make a go of it in the largest consumer market globally without government stimuli.
Subsidized!
Small private money was at risk until NASA “hired” Spacex in 2006, now they are at the NASA and USAF troughs, like Boeing and Lockheed.
A $100 million investment to get in the US government trough grows to $875M. That is not subsidy? In a monopsony where the buyer is the US government and has no history of its suppliers ever losing profits?
“By March 2006, Musk had invested US$100 million of his own money into the company.[19]”
“On August 4, 2008, SpaceX accepted a further $20 million investment from Founders Fund.[20] ”
“In early 2012, approximately two-thirds of the company was owned by its founder[21] and his 70 million shares were then estimated to be worth $875 million on private markets,[22] which roughly valued SpaceX at $1.3 billion as of February 2012.[23]”
“After the COTS 2+ flight in May 2012, the company private equity valuation nearly doubled to $2.4 billion.[24][25]”
It seems to me SpaceX Falcon was developed on “contract” with NASA.
“SpaceX’s achievements include the first privately funded, liquid-propellant rocket (Falcon 1) to reach orbit on 28 September 2008;[6] the first privately funded company to successfully launch, orbit and recover a spacecraft (Dragon) on 9 December 2010; and the first private company to send a spacecraft (Dragon) to the ISS on 25 May 2012.[7] ”
“In 2006, NASA awarded the company a Commercial Orbital Transportation Services (COTS) contract to design and demonstrate a launch system to resupply cargo to the International Space Station (ISS). ”
The NASA contract paid a good part of the detailed design but US G has no rights to the design.
USAF certification was another guaranteed revenue stream in a process that would be risky.
Lockheed and Boeing ineptitude were also favorable to Musk, a result of 70 years of subsidies………
” if you count the value of the subsidies their customers have received for buying Tesla vehicles and Solar City installations”
Well yeah, but why would we? A local government utility gives a subsidy for installing solar. Okay sure that might induce a customer to buy solar and if the choice falls on Solar City that might well help make a sale. And every sale of course contributes to reducing fixed costs per unit sold and so some monetary benefit flows back to Solar City, certainly in an accounting sense. But did the company actually get DIRECT funds for every dollar of subsidy sent to the customer? Not dollar for dollar.
Society has an interest in reducing carbon footprints, utilities have an interest in reducing peak demand requirements, and as a result incentives are put in place to induce citizens and customers to change behavior, including buying choices, in ways that advance those interests. And product suppliers who are in the business of supply to those newly preferred uses have an advantage over suppliers of legacy products. But that doesn’t translate dollar for dollar into money into Musk’s back pocket.
Using this logic every penny spent on airports is a subsidy to Boeing. No airports, no market for their product. I don’t buy it.
“Hard to believe a company can not make a go of it in the largest consumer market globally without government stimuli.”
Absolutely. Because Boeing would have been a roaring success if it hadn’t landed the exclusive contract for Air Mail back in the day, and certainly didn’t launch their post-war dominance of commercial airplanes because of the huge jump they got by supplying thousands and thousands of military aircraft during WWII. And I am pretty sure that all subsequent generations of jumbo jets would have simply rolled off the lines without the technology cross-over afforded by Boeing’s Space division. Which in turn didn’t need any of the Atlas, Gemini, or Apollo programs and the contracts that went with them to thrive.
This is silly. Whole sectors of American manufacturing were leveraged off government contracts and subsidized investments. You think the steel industry wouldn’t have taken off without the subsidies given to build the transcontinental railroads? Not just in supplying customers for their steel rails, but transport back from newly opened mines in the West?
And please God don’t get me started on the role of the Oil Depletion Allowance in getting American Big Oil off the ground and into its own stratosphere over the last seven or eight decades. Lock down mineral rights for pennies and acre and if you struck oil actually get to amortize the MARKET value of that oil against your tax burden. Because boohoo, the land you bought for $1000 that ended up worth $10,000,000 loses value by every $10,000 in oil you extract. Because it is getting “depleted”.
Frankly I have a hard time putting Musk in the same category as the Railroad Barons or J.D. Rockefeller when it comes to direct and indirect subsidies from the government. I mean where would Bechtel be today if it hadn’t landed the contract for Hoover Dam.
Bruce,
The Boeing 707 was derived from the USAF funded KC 135 design.
It would have been identical airframe, but………..
McDonald Douglas came out with the DC 8 which was wide enough for one more seat across (six instead of five) and had larger wing surfaces which gave it better range and fuel efficiency. Flying gas stations (KC 135) did not need long endurance because once they did their job, fueling strategic strike bombers, the world was ending.
So B707 took some more money than USAF money but not that much.
This was on TV some years ago, one of those discovery specials about airplanes in history.
While the B747 was a USAF design until it lost the prototype flyoff competition to Lockheed Martin with its C 5 which became the largest military development fumblefest yet.
The only difference between government support for industry and welfare is welfare recipients don’t have enough profits left over after feeding themselves to buy congress.
Thanks Ilsm. I knew some of that. Which is why the cries of agony Boeing puts up because of Airbus government subsidies are hysterical. As in laughing hysterically. And that even before we consider the Ex-Im Bank of which Boeing is disproportionately the biggest benefactor.
And just because I was thinking about this yesterday. Equally hysterical are U.S. complaints about Chinese industrial spying. Because while we openly admit that the NSA and the CIA have openly AND LEGALLY been snooping on and breaking into foreign communication and computer networks for decades and gathering every bit and byte they can, we still try to claim the high ground because we are not doing industrial spying. Oh no. Because OUR defense industries are not direct State enterprises.
Yep no cross fertilization between NASA, its contractors and the Defense Space Agency. Nope. And I am really really sure that anything the CIA learns about the radar signatures of Chinese and Russian aircraft are not shared with Lockheed-Martin or General Dynamics or whoever is designing the avionics of next generation fighters. Nope there is a Chinese Wall. Made of the finest rice paper.
Keerist, Eisenhower knew that this was all a seamless structure all the way back in 1960 when he warned us about the Military-Industrial Complex.
Boeing certainly benefited form its involvement in designing military aircraft in WWII, but its commercial jet aircraft success primarily dates to the Boeing 307, which was designed as a military transport aircraft and was manufactured in plants paid for by the US government. That said, its modern subsidies pale in comparison to the underwriting of Airbus developments by Eurozone governments.
The US and Soviet governments took all of the risk in developing early space transport systems. Those risks were much too large for private corporations to take on. It’s hardly surprising that governments are underwriting much of the risk in space transport being taken on by the likes of SpaceX. The question is whether taxpayers and consumers will eventually be well served by this subsidized commercial approach to space transport?
I don’t mind the subsidies all that much. Throughout history, nations get the industries they subsidize. Look at 19th & 20th century England or US. Look at modern China or Japan. Our problem is that we don’t demand enough in return. Our corporate taxes are WAY too low. If the government was grabbing 50% of the profits off of every company in the solar panel, battery, electric car or space launch business, I’d say let the money flow.
“That said, its modern subsidies pale in comparison to the underwriting of Airbus developments by Eurozone governments.”
Well it would be interesting to see numbers on that. But even at that you might have a hard time teasing out the cross subsidies to the commercial airline side from the space and military side. As your own example suggests a lot of r&d can happen on the military side while developing new airframes and avionics which seamlessly transits over to commercial. We may not even be able to quantify how much expertise developed and funded say in the course of building and deploying the Space Shuttle that years later is showing up in the 787 Dreamliner. Maybe nothing, the Shuttle was pretty old tech. On the other hand much of the advance of the Dreamliner is in its carbon composite construction. And you wonder how much of the materials science that went into that might have come from the Space and Military side.
Bruce @ 8:54: I think it’s dubious, too. That’s why I flagged it and subtracted the subsidies to electric car buyers and home solar installations. But I did want to present what the article did as well.
Don, I am with Bruce @ 11:43. While I have not looked at the Boeing vs. Airbus disputes as much as I would like to someday, the fact is that for the Dreamliner Boeing got $2 billion in present value of tax breaks (in terms of EU state aid policy for its own firms, this would be considered the “gross grant equivalent”) from Washington state and local governments, in addition to whatever value accrued from the cross-subsidies. By contrast, launch aid to Airbus is in the form of loans, so the grant equivalent is much lower than the numbers the US Trade Rep’s office throws around. At the same time, there is also risk reduction from the launch aid, and that is where I really need to take the time to get into the weeds.
Another example of subsidies that have gone wrong.
Ivanpah is a solar farm. It was built with a $1.6b soft loan from the Federal Financing Bank. The loans are guaranteed by the Department of Energy.
Ivanpah is headed to be another Solyndra. It is completed, but only producing 40% of the energy that was promised. It is also killing 3,500 birds a year.
http://www.wsj.com/articles/high-tech-solar-projects-fail-to-deliver-1434138485?mod=trending_now_2
http://www.brightsourceenergy.com/ivanpah-and-the-doe-loan-guarantee-program#.VX1jp6byq2w
Krasting what percentage of overall loans does that represent either from the “Federal Financing Bank” or as guaranteed by the Department of Energy? How does this compare say with the record of Venture Capitalists throwing money at startups in Silicon Valley? After all if any given venture is a sure bet 100% thing they wouldn’t need any kind of subsidy or venture capital (the whole word ‘venture’ implies risk) they would just get conventional financing through GE Capital or something.
Solyndra is a bullshit right wing talking point. It is deployed without context of the program within it was enabled and almost always with snide insinuations that it was only funded because of political connections/contributions of its founder. All buffalo chip smoke and no real fire. You can pick through any portfolio and find losers, that is not how you measure fund performance. I’ll check out your links but frankly this smells. Not atypically but still nasty.
And since when does anyone on the Right give a shit about birds? That too is just a typical bullshit rhetorical move along the lines of “Gee I thought liberals cared about the Third World and here you are destroying jobs in sweatshops that are these peoples only work options”. Even as ‘Free Traders’ resist any efforts to crack down on slavery in Malaysia. There is nothing more tired than these incessent attempts at Liberal guilt tripping.
Krasting once again the WSJ article is behind a paywall and the brightsourceenergy article is not only a defense of Ivanpah but is also three years old.
I did actually track down an article that brings all your points about the ‘Federal Financing Bank’ and ‘Solyndra’ together and wonder why you didn’t cite it:
http://www.foxbusiness.com/markets/2011/09/28/government-bank-financing-more-solyndras/
Maybe because it was Fox Business and included such gems as this. After ranting about the off the books nature of the FFB and its scandalous lack of any requirement to hold reserves we get:
“Not booking loan loss reserves would get any other bank in trouble with federal bank regulators such as the Federal Deposit Insurance Corp., the Federal Reserve and the Securities and Exchange Commission.
Why can the FFB get away with this?
Because the KPMG report says the bank told it in true Pollyannish fashion that “no future credit-related losses are expected,” even though Solyndra clearly disputes that optimistic bureaucratic resolve. (The bank did earn $449.5 million for the fiscal year ended September 30, 2010, up slightly from $444.2 million in fiscal 2009.)”
Which is to say that the bank is on the whole banking earnings of close to a half billion a year despite the fact that not every loan worked (Unlike every other lending institution in history ever – I mean never).
I have to admit I never heard of the FFB until now, but I hunted up their audited financial report and everything seems to be on the up and up, at least I am not seeing a whole bunch of booked losses on bad loans.
http://www.treasury.gov/ffb/financial-statements/Federal%20Financing%20Bank_Financial_Statements_FY2014_and_FY2013.pdf
So really all I am seeing here is the equivalent of “Solyndra!” “Benghazi!!” “Acorn!!”. Perhaps you can re-present this in a narrative that makes some actual sense using real numbers.
BTW for others. The Ivanpah solar farm is using what I think is a totally flawed approach to solar that would only appeal to people that like things that flash and or go boom. It essentially turns a whole huge chunk of desert into a solar oven so as to drive a steam turbine to generate electricity. Which thing of course has to be transported by grid. It would not surprise me a bit if like any number of other hugely capital intensive projects that look impressive on the cover of a corporate report that it doesn’t really produce the same value for money that say distributed solar would. That is it is more like your typical Defense contract or World Bank funded mega-development than anything. But that seems to have little to do with any subsidies program as such. Not everything is a winner and lots of public and private dollars are thrown at these kind of projects that maybe don’t entirely pan out.
“
For those interested in solar here is a pretty good article that covers both the specific financing issues brought up by BK and the reasons, or lets be honest, EXCUSES, the private investors are using to explain a here to date underpar performance.
More Problems for CSP: Ivanpah Solar Plant Falling Short of Expected Electricity Production
Growing pains or chronic problems for the landmark concentrating solar power plant?
https://www.greentechmedia.com/articles/read/ivanpah-solar-plant-falling-short-of-expected-electricity-production
But specifically as to subsidies.
“Some might point to Ivanpah’s struggles as another potential black eye for the U.S. Department of Energy loan guarantee program, but losses in the DOE portfolio have been small, well under what was budgeted for the program by Congress. ”
Which is not to say that this project is not struggling a bit with that loan and maybe is having to rob Uncle Sam-Peter to repay Uncle Sam-Paul
“On September 29, the Platts trade newsletter Megawatt Daily explored Ivanpah’s status, but its article was and remains hidden behind a very pricey paywall. The article noted that the trio of Ivanpah owners had sought extensions on repaying their loans as they waited to receive a cash grant from the U.S. Treasury worth 30 percent of the plant’s cost (news first reported in the Wall Street Journal). Such grants were made available as an alternative to the federal renewable energy Investment Tax Credit through an Obama stimulus provision known as the 1603 program.”
So it is not like this project is a good Poster Child for subsidies. But neither is it justification for full scale Cherry Picking.
FFB has $7b of “recoverable” loans related to energy. So Ivanpah is a big chunk of that. FFB has a total of $70B outstanding. The sun farms are about 10% of the total.
The info is at the bottom of the following in the balance sheet report.
Please take some time and scroll down this long report. Look at who got money, and at what rates, in just the month of May.
http://www.treasury.gov/ffb/press_releases/2015/05-2015.shtml
Oh. If you care, google Soyndra, Bruce Krasting. You will see that I called that it go BK before it happened. And you will see that I was the only one in the press who had an insider of the company giving me info.
My first piece where I said what would happen next:
http://brucekrasting.com/government-investment-disaster-in-the-works/
Krasting you have any evidence that the loan to will actually under perform or default?
And in the scheme of things was Solyndra really a big deal? Congrats on calling it first. But at the time there were a lot of people insisting that every bit of bailout from the banks to AIG to auto makers to yes energy were ALL going to go tits up. Because ‘subsidies’ and how the government couldn’t do anything right. Well on balance the industrial subsidies worked out okay, with some losers mixed in. And in the context of such things as money looted by Afghani warlords of the $25 billion invested to date in training the Iraqi Army so they can run away a loss of $500 million on Solyndra is not make or break for the country. Certainly it was no “government investment disaster”. Not compared to the money laid out to rescue your old friends in finance.
BK I checked your article out.
You called the BK one day in advance. On your own admission based on “an insider of the company giving me info”. Nice analytical skills bro.
Krasting I also went down that list of loans. Which by the way were made in April and not May. And I looked at how got loans and at what rates. But also looked at the maturities. Loans maturing in 2037 and 2046 were at rates over 2%, loans maturing this year at rates at 0.5% and less. Hmm, if this really out of line with current short vs loan loan rates from anyone else? You may have heard the buzzwords “zero lower bound” or about the Fed trying everything they can to get inflation back up to 2%.
Can you pick out a specific loan that is troubling you? One that is actually out of line with the rest?
Webb- You ask what loans I question. How about these? This adds up to a significant amount of money. Yes, they are short term roll overs – but 0.02%?? Recall that the Fed is paying 0.25% on reserves, so these loans are out of whack. This from the 10/14 report:
http://www.treasury.gov/ffb/press_releases/2014/10-2014.shtml
Brazos Electric #917 9/30 $220,868.70 12/31/14 0.020% Qtr.
*Brazos Electric #917 9/30 $71,223.14 12/31/14 0.020% Qtr.
*Brazos Electric #917 9/30 $51,691.00 12/31/14 0.020% Qtr.
*Brazos Electric #844 9/30 $3,949,590.07 12/31/14 0.020% Qtr.
*Brazos Electric #844 9/30 $3,949,590.07 12/31/14 0.020% Qtr.
*Brazos Electric #844 9/30 $3,595,091.76 12/31/14 0.020% Qtr.
*Brazos Electric #844 9/30 $4,055,697.72 12/31/14 0.020% Qtr.
*Brazos Electric #844 9/30 $4,055,697.72 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,111,398.07 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,111,398.07 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,111,398.07 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,111,398.07 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,111,398.07 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,659,858.57 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,144,408.00 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,144,408.00 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,144,408.00 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,144,408.00 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,144,408.00 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,144,408.00 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,144,408.00 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $234,573.51 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,175,899.45 12/31/14 0.020% Qtr.
*Brazos Electric #2307 9/30 $4,175,899.45 12/31/14 0.020% Qtr.
*Brazos Electric #2434 9/30 $40,540,890.33 12/31/14 0.020% Qtr.
*Brazos Electric #2434 9/30 $40,540,890.33 12/31/14 0.020% Qtr.
*Brazos Electric #2434 9/30 $40,540,890.33 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,302,879.40 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,302,879.40 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,302,879.40 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,302,879.40 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,302,879.40 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,302,879.40 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,302,879.40 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $22,902,299.57 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,302,879.40 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,302,879.40 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,946,226.35 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $10,406,882.65 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $22,682,453.85 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $12,474,966.18 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,936,853.09 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $18,989,599.45 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $28,584,468.67 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $16,905,306.08 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $26,367,023.64 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,675,564.45 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,675,564.45 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $21,868,626.67 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $4,655,100.18 12/31/14 0.020% Qtr.
*Brazos Electric #2608 9/30 $1,734,268.09 12/31/14 0.020% Qtr.
*Brazos Electric #2978 9/30 $10,756,475.61 12/31/14 0.020% Qtr.
*Brazos Electric #2978 9/30 $9,121,527.71 12/31/14 0.020% Qtr.
*Brazos Electric #2978 9/30 $10,216,221.03 12/31/14 0.020% Qtr.
*Brazos Electric #2978 9/30 $9,918,661.20 12/31/14 0.020% Qtr.
*Brazos Electric #2978 9/30 $9,918,661.20 12/31/14 0.020% Qtr.
Webb – You’ve spoken of your training/knowledge of accounting. Possibly you could clarify things for me.
The fiscal 2014 audited financials for FFB are attached. Page 11 has Net Income at $520m.
Now go below and see a loss of $540m from a “capital transaction”. So how much did FFB make? Was it $520M or -20m?
The answer is in footnote #5. And this gets to my question. Can you read this footnote and tell me just what did happen at FFB that results in a $540m loss?
http://www.treasury.gov/ffb/financial-statements/Federal%20Financing%20Bank_Financial_Statements_FY2014_and_FY2013.pdf
Webb – 30 years at a rate below 30 year treasuries?
Arkansas Baptist College $29,933,721.49 9/01/44 2.635%
Solar Partners 1-7 are Ivanpah. This is cheap money for a project that is running at 40% of projected results. Who owns Ivanpah? Google. Why would Google do that? The tax benefits made it a free investment.
Who stands to gain if this were to (miraculously) turn into a financial success? Google! Who stands to lose if this project goes wrong? The DOE – AKA the tax payers.
Me? I think this stuff is flaky.
*Solar Partners I 12/29 $111,015,529.43 6/29/15 0.480% S/A
*Solar Partners I 12/29 $24,058,574.01 6/29/15 0.480% S/A
*Solar Partners I 12/29 $16,871,054.56 6/29/15 0.480% S/A
Subsidies? I recall in one of my postings noting that we invested (land grants etc) in today’s dollars $4.5 trillion to get our railroad system to where it was at it’s heights. Sadly, we slowly scrapped it for highways, trucks and cars while the rest of the world was building on what they had.
That’s the ultimate waste.