Friday, October 29, 2021

The benefits of procrastination

Andrew Gelman left this comment a few weeks ago:

I think there's something else going on here that lots of people _want_ these people to be non-frauds, in part for ideological reasons. I think about that when reflecting on all the support for Gladwell among various media elites. It's no surprise that the New Yorker supports Gladwell---he's one of their stars!---but it's not just the New Yorker. Or all the fans of Elon Musk. People like Musk in part because he symbolizes something good: the Heinlein-like entrepreneur who's actually building something, etc.

Anyway, I'm not sure but I feel like there's something going on here. The issue isn't just the frauds and bullshitters out there, it's also the respected elites who endorse them.


I was going to respond to the comment at the time, but I got distracted which was perhaps for the best, since I couldn't have come up with an example as good as this.

 First, we need to address something important but not directly related to the point of this post. While Musk didn't actually "attempt to take the company private" (see below), even if he had taken Tesla private, there is no reason to believe that it would now be worth a trillion dollars. That market cap is based on a P/E of around 350, compared to, for example, a P/E of around 20 for Ford, despite the fact that the F-150 Lightning will very probably beat the Cybertruck (so much for first mover advantage). You could tell the same story about pretty much all the major car makers, comparable tech (supported by much larger R&D budgets) and far greater revenue trading for a fraction of the price. 

Simply based on profits and assets, taking Tesla private at $420 wouldn't have been "the deal of the century." It might not have been a deal at all.

But all of this is moot since we know (and have known from nearly the beginning) that "funding secured" was nothing more than a transparent lie to facilitate a crude market manipulation. 

At the risk of hammering the obvious, the NYT's Aaron Ross Sorkin speaks for the establishment press and he is capable of, not just overlooking massive fraud but to actually doubling down on the lie behind it (something that Musk was "contractually forbidden" to do on his own). What's worse, this is more or less what we have come to expect.

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