Pare The Trough

Tesla has a serious brand problem. For a company like Tesla, which in ways is similar to Apple in that a significant part of the stock price is puffed up by the brand, this can be very worrisome. I’d hazard a guess that no other major company on earth has a stock price so bloated by its brand identity as Tesla.

 Many years ago, I predicted that the then-new Prius would significantly outsell the Honda Civic Hybrid because the Prius was its own thing whereas the hybrid Civic looked almost identical to the gas Civic. But people wanted to be seen driving hybrids as a lifestyle statement and only the Prius delivered on that. The Prius trounced the Civic in sales and the Honda was significantly redesigned for its next iteration with unique styling.

 The Tesla delivered in a similar way. It has been an “elite” club with membership dues = 1 Tesla. Having owned 2 Teslas myself, the notion that the Y or the 3 are “luxury” vehicles is a joke. Build quality can be spotty. But make no mistake, I loved my Teslas, and, like many others, also liked how it felt being seen to drive one in a way no other EV could deliver.

 Until it started delivering something undesirable…

 When people start calling your whip a “swasticar” it’s like a giant permanent bad hair day. And the only real cure is to ditch it or avoid buying one in the first place.

 Tesla, if one is to go by the value of its stock, is worth more than Toyota, General Motors, Ford, Porsche and Ferrari. Combined. Here’s a look at their sales numbers in vehicles sold:

 So, the other 5 companies sell more than 10x the number of vehicles, but their combined value is lower? I would say, on what planet could that make any kind of sense to anyone, but it turns out it’s this one. Of course, what it really says is that Tesla sits on a huge stock bubble. I’d hate to be heavy in that stock when the music stops playing… —Oh, wait, Elon Musk is $150B heavy into it and the music has definitely developed a stutter.

Well, what does your local billionaire do when his investments are under threat? Let’s look at a gameplan:

·      Buy a social media company and use it to pump out “information” that tends to be good for you and bad for competitors or anyone that disagrees with you or is in your way.

·      Spend $270M electing a President.

·      Get government contracts and/or sway how the rulebook is written.

·      Be allowed unfettered access to the government payment system where information about your competitors is held, amongst other things.

·      Be allowed broad latitude in reconfiguring the agencies that have regulatory authority over the industry segments that your companies operate in.

 Already, in the month since Musk was unleashed in Washington, the State Department has put in an order for $400M in Cyber Trucks. That’s Elon’s investment returned with interest right there. But Musk has also been looking into “waste” at NASA and into contracts that other competitors have with the government. Could I be overstepping when I say that seems like a conflict of interest? 

Party Time

 And now Jeff Bezos wants in to the party.

 If indeed “Democracy dies in Darkness,” then someone just turned out all the lights and drew the blinds at The Washington Post. When Bezos bought the Post in 2013, he waxed grandiloquent about the reporters and editors having the freedom to “follow the story” without interference.

Last week he announced that, henceforth, the Post would stand on “two pillars: personal liberty and free markets.” That is billionaire-speak for “promoting the idea that my rapaciousness should go unchecked.”

It would sadly appear that The Washington Post has departed the lofty ideals of Graham, Bradlee, Bernstein and Woodward and decided that the Watergate burglars were, in fact, on the path of righteousness.

Hang Together or Hang Apart

 It is easy to feel powerless against such brazen corruption and power.  And the truth is you are powerless. —As a one.  But as a many? 

The United States, more than ever, is a nation of consumption. Our economy is dependent on you buying unending amounts of made-to-break crap made in China.  (And let’s be clear, those Chinese factories are quite capable of turning out high-quality long-lasting merchandise, but the economics of durable quality would not help keep the billionaire feeding troughs slopping over.) As I mentioned in my last post, until Ronald Reagan we were a nation that made things. Now we are a nation that buys things – mostly made elsewhere. And mostly junk.

 But there is power in that fact. You can decide what you will buy and from whom. Or not buy at all. (That’s like paying yourself to protest.) As a one, you won’t cause too much pain. But as a many..? I am in no way suggesting what you might choose to do in following your beliefs.

Me? I sold my Tesla Y at a loss, last August because I thought Musk was someone that I did not wish to any longer be associated with. (His behavior then seems quaint and cuddly by comparison to now.) I recently cancelled my Prime and my Washington Post subscriptions. I had previously deleted all Facebook related apps. Facebook, Instagram, WhatsApp. (Full disclosure: I think Zuckerberg should be in jail for the destruction of a generation of children’s mental health.) For additional privacy and control of my data I moved from G-Mail to Proton for e-mail and from Google to Duck-duck-go for search.

 As Malcom X eloquently said, “The man who stands for nothing will fall for anything.” It felt to me that continued business with these companies felt like I was falling for something, and I didn’t like the way that felt. So, I chose to cut my ties. And I have to say, it does feel better.

 Such choices may come with inconveniences. That Prime shipping was an addiction. But I assure you that the delamination of Medicaid and Social Security will be decidedly more inconvenient. Unless we tell the billionaires pulling the levers that there will be consequences to their actions - and then follow through – they will just keep pulling the levers in a way that benefits only them. Do you want to pay them to get the world that they want, or not pay them and work toward a world that is fair to you? Consider it an investment in the long-term future of the US. 

Act in Haste, Repent at Leisure

 Before the election, when I realized how it would go, I made a few predictions. (And for those blaming other people for their voting decisions, I ask you to remember that the Democratic Party failed to hold primaries where iron-sharpens-iron and the best, most likely candidate can emerge. The Dems need new leadership; if nothing changes, nothing changes.)

My predictions were:

1.        Ukraine will be sold out.

2.        Taiwan will see their future come into true clarity.

3.        All of our “friends” will know that their relationships with the US will henceforth be transactional.

4.        China will start looking like a stable partner to other nations.

5.        De-dollarization will begin.

 Since talking with a long-time friend who is an expert on international trade, I am pulling back a little on full de-dollarization, but already, countries are increasingly striking direct deals in their own currencies. That is not good for the US. Having the dollar be the reserve currency for the planet has given us huge advantages.

 The fulcrum I am keeping an eye out for is Australia turning from the US toward China. It would have been unimaginable not long ago. But when the US turns 180 degrees from election to election to election (or even day to day) and friends are sold out and treated like enemies, no one can afford to believe it will not happen to them. Chaos is not a strategy on which to build partnerships, it is the game-plan of a nation pursuing a zero-sum enterprise. I think many countries will look to make their own deals with China to avoid the risk of being sold out by the US. I’m sure Taiwan is wondering if they should move quickly before they get asked to hand over half of their chip-making capabilities now with “security guarantees to be worked out later.” (AKA “The Ukraine Plan”)

 If this were people instead of countries, what would Carolyn Hax say? I imagine, “cut ties with your abuser and move on…”

 Like destroying a great brand, trading partnerships, national relations and reputations, once lost, are not easily resuscitated. If you’d like to send a message to the billionaires that are feasting on your future, stop giving them your money and your data. They’ll take notice…