By I. Am. Verboten
The Keely Motor Company shouldn't be unfamiliar to the aspiring investor. It's a cautionary tale of genius, promises, fraud, and financing. A young inventor, 1870's Philly, enjoying the benefits of deep pockets willing to fund his research.An entirely new form of motive power aptly named... "vaporic" and in the more esoteric circles branded "etheric"...vibratory sympathy.
Big words being thrown around with grand pomposity by famous experts. Well known scientist and engineers fawning over the same investors. There are spectacular demonstrations of the elements of the force in practical application.
Always in controlled conditions and so suggestive of something amazing. Certified by professionals as clean results from honest experiment. After all, technology investors aren't dumb like those commodity exchange goons, and they want to make sure they put their money on the right horse.
Stripping the process of all technical terms, it is simply this: I take water and air, two mediums of different specific gravity, and produces from them by generation an effect under vibrations that liberates from the air and water an inter atomic ether. The energy of this ether is boundless and can hardly be comprehended. The specific gravity of the ether is about four times lighter than that of hydrogen gas, the lightest gas so far discovered.
- New York Times, 22 September 1884
In 1872, John Ernst Worrell Keely, started KMC with the modern equivalent of about 100 million dollars. Keely died of pneumonia in 1898. For the entire 26 years...through ups and downs, lawsuits, and challenges, he claimed to be on the edge of breakthrough without ever bringing the product to market.
When challenged he was always able to give a convincing demonstration of elements in principal that would win another round of investment from his wealthy patrons. To the very end he claimed to be an honest man and his friends and colleagues would seem to agree. People liked him.
Yet, he was a fraud. His engine, upon independent review was designed to deceive while maintaining the illusion of authenticity. He really was a genius and brilliant engineer. However, his " Keely Engine" ran on nothing more impressive than compressed air. The tubes of which were hidden in the walls of his demonstration spaces along with wires to signal machines set up beyond view.
He was a magician and he played the best trick there is...to convince the audience that the impossible was possible and they paid him handsomely for it.
The interesting thing about Keely's engine is that so much of it was real. Just not the bit that really mattered. Consider for just a brief moment how Steve Jobs was high order bit. A concept he often talked about. A real producer with countless top selling products across multiple companies to his credit. The market judged Mr. Jobs and he measured well.
I'm suggesting Musk could be like Keely. Low order bit. Maybe even a little envious of a better man. It is possible that someone genuinely successful at something (innovating a stable way to send money through email for example) might be willing to leverage his own reputation in a similar "Keely Scheme" rather than bravely face competition in the marketplace of ideas.
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Focusing on projects we all dream about. Like an affordable electric car. Subsidized with tax dollars he ends up giving us a roadster only the rich want and so called "better technology" no-one can really use...yet...always yet...great demonstrations and almost there but...it's been 10 years. It took 5 just to get a first model and still none of the Tesla cars are affordable as promised.
Nothing impressive about expensive electric cars. Nothing new about them, either. But man do they look sleek at those government luncheons where the bureaucrats celebrate another Musky achievement. It took 16 years to get a reusable rocket to work properly and everyone knows rockets cost money, they don't make money. So when the car doesn't impress...it's the battery, then the panel.
Solar City reminds me of a place with a yellow brick road.
Elon is milking the tax payer by using the government as a sort of massive paywall for social dream projects that would get done in natural course anyway by the private sector. Is he making Keely promises, well aware that he never needs to deliver? So long as he keeps pushing elements forward that please the political audience he's really playing to. Just like Keely ignored real customers and his responsibility of authentic market production in favour of patron investors.
Musk has discovered a way to monetize taxes for his private benefit by coupling it to political will. Why does a man with 20 billion dollars need to use 5 billion in government subsidization to fund his projects? Because he can't make enough profit legitimately like Apple or Disney or a million other smaller productions had to. Nor is there a better way to establish a de facto monopoly than with a government partnership.
SpaceX has little or no commercial value, (but everything he does is historic!) and even if it reduces long term costs with a reusable rocket it's so far in the debt hole it'll take an entire private space industry just to present enough volume of activity to get ahead of it. Which will require so much further investment from the private sector it makes his vanity projects look like peanuts.
As the years go by, Elon drops new distractions, hyping relatively minor achievements as...better than. Why fuel just a car when a battery wall can fuel a civilization...and boom we're back in the trolley system. But... but... the electricity is from a battery now. Good grief, Snoopy. Then comes another predictable round of AI hype. A new AI threat group. Nothing is more vaporware than AI, but he's gotta maintain those tech credentials by having a public opinion on something vague and complicated.
Anything to get those investment dollars rolling in while promising the biggest things imaginable...just around the corner. Elon Musk is very clever, there are way too many parts in motion for this to be an accident and it's far from honest.
Is a man who pretended to be a Canadian so he can exploit a quicker path to US citizenship beyond reproach?
I think he plays the tax payer for fools, knowing the political class does the same thing. He may even believe that his version of exploitation is for the greater good. Well...governments say that, too.
Instead of food stamps for votes, it's solar panels for the progressives. Flame throwers for the conservatives. AI for the nerds. Hyperloops for the engineers. A half dozen companies, wrapped in other peoples dreams, enjoying the benefits of being too big to fail. Massive government investment shielding his private sector activity from the reality of accountable returns.
Diversified to protect self interested investment rather than capitalist production
Will he actually deliver and did he ever intend to? Will he ever have the balls to face the market again without the government stacking the deck in his favour? I doubt it. He has 20+ billion reasons to keep this game going and like Keely he may never be forced to produce a significant product capable of market sustainability. Anything he sells, sells because he's Elon Musk. Just another reality-star/celebrity pushing war bonds for "the man".
Will the expensive battery...the expensive solar panels...the expensive rocket ships....the expensive underground tubes make his promises and lack of market accountability worthwhile in the end? The press eats it up with a gravy spoon and if nothing else it sells a ton of copy.
Yet, I can't help thinking of all those good people who's names we'll never know because they couldn't get started in a world where Elon is so eclipsing. Just like all those genuine producers in Keely's time who never got the funding they needed because he'd illegitimately diverted it with fraud.
Keely's record for sustained illusion stands at 26 years. Amazing Musk is sitting at 16 years on the social currency if we start in 2002 when he sold his Paypal stock to Ebay...
...just as the dotcom bubble burst. Come to think of it...maybe we should look a little more into that, too.
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