Rivian Gets $6.6B DOE Loan Commitment for Georgia Plant Construction

[Bullwinkle]

Don’t take this as me picking on you because 5 years ago I would have written something almost identical to what you just did. Respectfully you have it backwards, the more free the society the more rules it needs to keep it that way. I know this sounds paradoxical so let me explain.

The goal of a free society should be to let people do whatever they want while not being able to restrict those same choices for other people. Agree with me so far, probably right? The problem is never with the do whatever you want, it’s with the restrict the rights of others part. With money comes influence and with influence comes the ability to pass rules that benefit you to the detriment of others.

The USA started out with minimal rules and the understanding that people would operate on the basis of the principle of common interest. The problem came from individuals who took advantage of those free markets to attempt to change the rules to their benefit at the expense of the majority. Take anti trust laws for example, they were introduced because Standard oil figured out that if they acquired all the oil produced they could charge whatever they wanted for it and no one could do anything about it.

Obviously this restricts the choices of the majority to benefit the few so society thought it best to grant the government power to make sure any one individual or group of individuals couldn’t get together to screw over anyone else. The market became more regulated but also became more free.

Another example is Sarbanes- Oxley. This was passed in response to things like Enron. Enron was a company that used fuzzy math and obscured accounting to fool investors into thinking their company was solvent when it wasn’t, screwing over many people to their own benefit. They also punished people who tried to bring it to the attention of the public by firing or blackballing them.

Sarbanes prevents retaliation to whistleblowers and requires publicly traded companies to follow GAAP or Generally Accepted Accounting Practices. That way we know the public data is calculated using math that shows an accurate picture of a company’s health. This is another example of a law making the market more free.

It’s not as simple as saying more laws equal less free markets because sometimes a law is needed to make sure everyone is playing fairly. Laws by themselves aren’t bad or good, they are just words. A law that protects the public from bad actors makes us all MORE free not less. Laws can be corrupted too, I’m not saying all laws are good either.

Atlas Shrugged is myopic because it takes the overly simplistic approach that government is bad and private sector is good when bad actors are found everywhere. The best policy is a government designed to protect the rights of all, even and especially from the other parties involved in the market.

I’m sure you could point to studies showing less regulation was better for market growth but there are just as many examples of a lack of regulation stifling innovation and freedom. In the inverse I showed two examples of regulation stepping up to protect freedom and the integrity of the market from free market actors intent on restricting freedom to their own benefit.

We need people like you. We need you to scrutinize laws and make sure the laws we have only protect freedom not infringe on it. The thing is, the law itself isn’t automatically bad because it’s a law and we need more laws than you’d think. It’s a balance.

Well put.

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[Bullwinkle]

The cash that is given to them that they have to pay back comes from the taxpayers and adds to our debt. If Rivian pays it back, eventually the debt will be removed. However, until then, we have a bigger hole to fill. And what if Rivian goes bankrupt? Then what happens to the debt they owe?

The bankruptcy process will determine which debts they have to pay back and how much, and I imagine the Federal loan will take priority over all other debts. But that is just my assumption. Is that true? And will they really be able to pay all of it back? Then it becomes a permanent hit on the debt the taxpayers have to cover.

The lower than market rate on the loan is a subsidy that adds to our debt anyway.



Atlas Shrugged is my textbook.

But seriously, some markets are more free, and some are less free. Sure, there are a lot of markets that are very much not free. That does not mean it is a good thing. I guess you want the government to control every single decision you make as a consumer? I hope not.

I hope you want some freedom to make your own decisions. Personally, I like freedom of choice, and a free market provides that. Get government out of the way and everyone will prosper more. That is my opinion, and I think the data supports it.

In a hypothetical, free market world, laissez faire is an admirable ideal. The problem is this is not a free market world…and it is dogmatic to act as if it were. China is coming after our tech and they will cheat and subsidize to win. The taxpayers that can’t afford Rivians really can’t afford a world where the US has no participation in cutting edge technology. I loved Atlas Shrugged and the Fountainhead too, but it is old school, dogmatic, shortsighted and even foolish to lose your kid’s country by pretending we are operating in a sociological/ecconomic worldwide utopia.

 

[mkhuffman]

Don’t take this as me picking on you because 5 years ago I would have written something almost identical to what you just did. Respectfully you have it backwards, the more free the society the more rules it needs to keep it that way. I know this sounds paradoxical so let me explain.

The goal of a free society should be to let people do whatever they want while not being able to restrict those same choices for other people. Agree with me so far, probably right? The problem is never with the do whatever you want, it’s with the restrict the rights of others part. With money comes influence and with influence comes the ability to pass rules that benefit you to the detriment of others.

The USA started out with minimal rules and the understanding that people would operate on the basis of the principle of common interest. The problem came from individuals who took advantage of those free markets to attempt to change the rules to their benefit at the expense of the majority. Take anti trust laws for example, they were introduced because Standard oil figured out that if they acquired all the oil produced they could charge whatever they wanted for it and no one could do anything about it.

Obviously this restricts the choices of the majority to benefit the few so society thought it best to grant the government power to make sure any one individual or group of individuals couldn’t get together to screw over anyone else. The market became more regulated but also became more free.

Another example is Sarbanes- Oxley. This was passed in response to things like Enron. Enron was a company that used fuzzy math and obscured accounting to fool investors into thinking their company was solvent when it wasn’t, screwing over many people to their own benefit. They also punished people who tried to bring it to the attention of the public by firing or blackballing them.

Sarbanes prevents retaliation to whistleblowers and requires publicly traded companies to follow GAAP or Generally Accepted Accounting Practices. That way we know the public data is calculated using math that shows an accurate picture of a company’s health. This is another example of a law making the market more free.

It’s not as simple as saying more laws equal less free markets because sometimes a law is needed to make sure everyone is playing fairly. Laws by themselves aren’t bad or good, they are just words. A law that protects the public from bad actors makes us all MORE free not less. Laws can be corrupted too, I’m not saying all laws are good either.

Atlas Shrugged is myopic because it takes the overly simplistic approach that government is bad and private sector is good when bad actors are found everywhere. The best policy is a government designed to protect the rights of all, even and especially from the other parties involved in the market.

I’m sure you could point to studies showing less regulation was better for market growth but there are just as many examples of a lack of regulation stifling innovation and freedom. In the inverse I showed two examples of regulation stepping up to protect freedom and the integrity of the market from free market actors intent on restricting freedom to their own benefit.

We need people like you. We need you to scrutinize laws and make sure the laws we have only protect freedom not infringe on it. The thing is, the law itself isn’t automatically bad because it’s a law and we need more laws than you’d think. It’s a balance.

Thanks Donald. This is a very reasonable position, and reminds me of the famous quote from James Madison:

"If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions."

I hope everyone has a great day today!

 

[vandy1981]

Well-regulated capitalism brings prosperity for all -- but poorly-regulated capitalism eventually brings calls for reform (or even revolution) from those whom it leaves behind.

Even Ayn Rand cashed her social security checks and used Medicare. She twisted herself into a pretzel trying to justify her hypocrisy like every other moral absolutist out there.

Musk is probably twisting himself into a pretzel trying to justify his criticism of IRA/NEVI subsidies after Tesla was saved from oblivion by similar government programs.

 

[mkhuffman]

Even Ayn Rand cashed her social security checks and used Medicare. She twisted herself into a pretzel trying to justify her hypocrisy like every other moral absolutist out there.

Musk is probably twisting himself into a pretzel trying to justify his criticism of IRA/NEVI subsidies after Tesla was saved from oblivion by similar government programs.

If the government is taking money from you and then giving it back to you, why wouldn't you take it? It is better if they didn't take it from you in the first place, but they do.

Personally, I don't see apposing that process as hypocrisy when it is the law, and we are forced to participate in at least part of the process (the part where they take from you). I have been contributing to Social Security for many years and I am definitely going to get back at least some of what I put in, plus compound interest.

Is it time to eat turkey yet?

 

[TripleB]

Does this loan have a union labor requirement?

 

[savethemanual]

To those who are upset the Fed is wasting money on a loan to Rivian, how about directing your focus to the hundreds of billions wasted in military contractor spending....it's insane.

https://www.motherjones.com/politic...tagon-defense-audits-waste-wasteful-spending/

 

[Donald Stanfield]

To those who are upset the Fed is wasting money on a loan to Rivian, how about directing your focus to the hundreds of billions wasted in military contractor spending....it's insane.

https://www.motherjones.com/politic...tagon-defense-audits-waste-wasteful-spending/

This is whataboutism, and that's a poor argument. You discuss a policy for its merit not because something else is worse. Murder is worse than theft, but theft is still wrong. Murder being worse doesn't negate the fact that theft is wrong.

I'm not saying the Rivian loan is terrible; I agree with it. The whole point of my response is to illustrate that off-topic discussions don't do much to evaluate the Rivian loan on its merits.

 

[savethemanual]

I'm not trying to justify the Rivian Loan, but rather make a point about those who are soooo concerned about wasteful federal spending. The cost for this loan, when paid back, is a drop in the bucket and is actually beneficial to 'Merica.

 

[mkg3]

Every government department has a huge inefficiency and waste. Not just DOD.

The issue is, though, to be efficient means automation, using IT/AI, streamlining and so on. Just add your buzz word onto it. The result is a huge government workers being laid off.

I am all for small, non-intrusive government. Less is better. The only purposes for the government to exist is to provide common sense laws, national defense and provide safety net for those that need it. But what do you do with hundreds of thousands of people who gets laid off? The biggest challenge for the new DOGE.

Back to the federal loan for Rivian. I see no problem with the loan other than the union clause. While its not required that Rivian GA be a union shop, it does require Rivian not to discourage or in other words support unionization by being silent.

Tesla had a federal loan in its early days and they paid it back early with interest. Will Rivian do the same?

 

[emoore]

Every government department has a huge inefficiency and waste. Not just DOD.

The issue is, though, to be efficient means automation, using IT/AI, streamlining and so on. Just add your buzz word onto it. The result is a huge government workers being laid off.

I am all for small, non-intrusive government. Less is better. The only purposes for the government to exist is to provide common sense laws, national defense and provide safety net for those that need it. But what do you do with hundreds of thousands of people who gets laid off? The biggest challenge for the new DOGE.

Back to the federal loan for Rivian. I see no problem with the loan other than the union clause. While its not required that Rivian GA be a union shop, it does require Rivian not to discourage or in other words support unionization by being silent.

Tesla had a federal loan in its early days and they paid it back early with interest. Will Rivian do the same?

Hopefully Rivian survives and pays it back with interest. GM and Dodge did when they needed a loan during the financial recession.

 

[BigSkies]

Hopefully Rivian survives and pays it back with interest. GM and Dodge did when they needed a loan during the financial recession.

Don't forget the DOE loaned $2.5B to GM under this same program.

Ford is borrowing $9.2B from the DOE.

Here's a separate press release for $1.1B to GM and Stellantis as part of the IRA DOE grants.

This is a program that all the big US automakers are taking advantage of. The real question is why Rivian is getting singled out.

I'm a general supporter of the Inflation Reduction Act. It had a lot of these programs for a wide range of industries. Auto, electrification, and renewables get a lot of the press, but there are a huge amount of other industries impacted. Retrofitting steel plants is a big one.

If I'm going to raise my eyebrows at likely wasted spending, I'm going to start with the $1B going to the hydrogen sector. Although even then, I'd say it's still probably worth pursuing for some industrial sectors.

 

[Bullwinkle]

Don't forget the DOE loaned $2.5B to GM under this same program.

Ford is borrowing $9.2B from the DOE.

Here's a separate press release for $1.1B to GM and Stellantis as part of the IRA DOE grants.

This is a program that all the big US automakers are taking advantage of. The real question is why Rivian is getting singled out.

I'm a general supporter of the Inflation Reduction Act. It had a lot of these programs for a wide range of industries. Auto, electrification, and renewables get a lot of the press, but there are a huge amount of other industries impacted. Retrofitting steel plants is a big one.

If I'm going to raise my eyebrows at likely wasted spending, I'm going to start with the $1B going to the hydrogen sector. Although even then, I'd say it's still probably worth pursuing for some industrial sectors.

Also the oil and gas exploration subsidies

 

[Erik+]

I'll celebrate when it gets back to $115.

RJ exercised some options expiring in 2029, so maybe he thinks the stock is on the way back down.

https://finbold.com/monster-insider-trading-alert-for-rivian-stock/

 

[Bullwinkle]

RJ exercised some options expiring in 2029, so maybe he thinks the stock is on the way back down.

https://finbold.com/monster-insider-trading-alert-for-rivian-stock/

Options have windows and they are the backbone of his compensation…nothing to see here.

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