Trade in Places: Nissan v Tesla

    Aside from politicized malfeasance, the last few days have also seen 2 contrasts in trade and business.

    Elon Musk announced his intent to vote on merging his Tesla car company with SolarCity new energy, once again mesmerizing us with his audacity in rolling out new concepts and prototypes - Hyperloop, Gigafactory, and of course SpaceX. But it's not all hoops and mirrors - Tesla turned its first profit this quarter, despite all the risks. Amazon in comparison has taken years to turn eyeballs/user base into a profit, despite pioneering cloud computing and other distribution breakthroughs.

    More importantly, trade doesn't occur in a vacuum. Elon Musk exists in that bubble called Silicon Valley, where innovation is cultivated at every step, but that's just part of the story. Musk lives on subsidies, and actively pursues them to make his dreams come alive. Some think this exploitive, relying on government largesse, others think that's just the cost of doing business at a large scale.

    Which brings me to my main discussion - Nissan, and Brexit, and trade, oh my. A good portion of this year's campaign has been over trade policy, TPP, the negative effects of trade deals and the trouble the average Joe and Jane have in surviving a commodity, fastest-to-the-bottom consumer society, especially outside the city centers.

    See, folks who hate trade deals likely hate the EU, which is one massive trade deal on bovine growth hormone. The hatred towards the putative Nazi-thugs in Brussels is palpable, driving half of Britons en masse to the polls to regain their hard-earned freedoms, including the right to do things the old way.

    And just what was that old way? Well, aside from rank colonialism towards the brown and black skinned folk around the world, plus the blighted decaying industrial landscape of the 70's that inspired Bowie's dystopian "5 Years", it's that famed backroom deal, with the new factory coming to town and the fat back capitalist lording it over the community. If you know the Pink Floyd "Pigs", or some of the balloons from "The Wall", that's the one.

    And what did Theresa May give us this week, but a nice fat production agreement with Nissan - provided of course they stay in the UK creating lots of jobs, then they can get rock-bottom £0 tariffs for moving cars and equipment in and out of Blighty. "Now wait a second", you might think, "Brexit was to regain that slice for the common man, the one who's been excluded from the last few decades of profits and progress". Righty-o, old chap - but first the powers that be need their cut. So Nissan will get its tax-free divvy, some workers will get a factory job, and the UK government will get zilch - which for such programs as their famous National Health Service might be a problem - socialized medicine doesn't run on fumes or wafts of £1000 bills.

    [N.B. All that Google & Apple cash being essentially laundered through Cork holding companies didn't make Ireland rich, and the windfall promised by leaving the EU have already been reneged on, along with the new losses of the cratering Pound and businesses & banks exiting the UK.]

    This is the backdrop for our modern economy - just like the Internet came out of government-supplied DARPA research, our highway system was a major government initiative in the 50's till now, much of our new tech has come out of both NASA and NIH funding, and probably the much-despised but game-changing fracking probably came of age in Halliburton's huge war profits from the Iraq War (though its origins lie much earlier).

    The European Union has leveraged free trade and free movement to create a more and more openness in government and every day transactions. It's not perfect, of course, but it levels the playing field immensely, allowing producers in Romania to get to market in London and Paris with very few hurdles, and in the opposite direction as well, as many UK producers will tell you.

    But where's the tape cutting ceremonies in that? Instead, government gets its plaudits from opening the much delayed Chunnel (that didn't quite offer driving under the Sleeve as an option), or fighting off hordes of barbarian immigrants banging on the Gates of Calais.

    Trump is of this old world, Hillary of this new. Trump is out figuring out ways to game the system, get another undeserved tax break, find out who to pay off in the market he's trying to enter, screaming, complaining, wheedling, pandering... (Comey like the corrupt beat cop is just one more example of the corrupt cogs that's always existed in the political part of the system - cf. the Bush Years). It's everything about business we find despicable.

    Hillary is out getting investments, finding donors, pushing causes like health care and vaccinations and poverty relief and environmental protection. It's a model like Musk's - he doesn't expect to build the Hyperloop, so he opensourced the design so someone else can take it to its next stage. But it all costs money - Musk receives huge state and federal subsidies at every stage of his intriguing game. The folks thinking money will exit politics and business itself are deluded - the levers of production and progress *ARE* money, not a few factory workers, and the only improvement will be in distributing its control and benefit in some benign fashion to the masses.

    TPP isn't perfect, and should be improved, but the basic premise of trade agreements like universal health care is sound and progressive, if enacted with care and oversight and adjusted over the years. They all take money - lots of it - but it's a different kind of money in the end, even if that new money can be corrupted and requires vigilance same as the old. 

    Meanwhile, the left's nostalgic version of "Leave It to Beaver/Dobie Gillis" 50's utopia is hardly as sustainable as the right's. As interesting as they were, the 50's largely sucked and where they didn't, it was from unique circumstances after half the world had been gutted from mass murder and ruthless bombings, and we were the sole stable refuge, a messy anarchic vision that looks good for a small segment, but full of static for the 99%, or maybe then the 70%.

    We can't take that exception to the bank forever. But we can use the examples of Brexit vs. Bremain, Nissan vs. Tesla, next-gen EU/US economy over old school 2008 crash & 2003 Halliburton, as concrete examples of what obstructive, destructive business looks like, and what more constructive, encompassing social-good capitalism looks like, and the more "meh" Ubers in between. Even Hillary's famed transcripts from Goldman Sachs shows an effort to separate the Deplorables from the Admirable, along with the majority "just going to work in the morning doing my job". Even Pope Francis is getting into the act of what makes an ethical economy, and what's its antithesis.

    Most business folks aren't looking to tuck their kids in bed at night saying, "yes, honey, I'm a vulture capitalist, and one day you can be too". Finding a way to funnel business activity and business ambition into the new more socially-focused economy is one of our higher callings - I wouldn't trade it for anything, certainly not a quick buck.

    PS to add: Innovation is by its nature destructive as well as constructive. Getting rid of fossil fuels will *hurt* people, potentially as much as it helps. Lowering disease in Africa worsens its overpopulation problem. Part of our ongoing task is to limit the downsides of change while enhancing the upsides. Too many discussions are simply about the "right" way to do things without acknowledging the constant guessing and tradeoffs in good and bad effects.

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    I am in love with Elon Musk. Has any one looked at his roofs?  I hope this guy is protected from the GOP gang.


    It's a sin to kill a mockingbird. Even a billionaire mockngbird.


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