CFI.co Blog

Displaying an unsurprising anarchic streak, Elon Musk today defied a county lockdown order to reopen his flagship car assembly plant in Fremont, California. The enfant terrible of the US manufacturing industry dared the local sheriff to arrest him and said that he would be onsite orchestrating the start-up of production lines idle since mid-March.

Mr Musk, infamous for lacing his tweets and comments with four-letter expletives, has leveraged his fearsome reputation to drive up the share price of the company in which he retains a 51 percent stake. Since he first vented his anger at the stay-at-home order issued by Alameda County on 29 April and set to expire on 31 May, Tesla shares have gained 35 percent in value, recovering most of the terrain lost when the market pulled back in March. Interestingly, Tesla shares were already on a downward slope when the pandemic reached US shores, retreating from their February peak of almost $970 to settle around $860.

Today, in early morning trading, Tesla shares advanced steadily and tacked another 3.6 percent to their winning streak. Bucking the overall trend of the market, investors in Tesla have seen their holdings double in value so far this year. Over the past 12 months, Tesla stock gained a staggering 262 percent.

Mr Musk is a hook-or-crook kind of guy used to getting his way. He has friends in high places too. Over the weekend, he lambasted county authorities in a series of tweets, threatening to up sticks and move to a more welcoming and pliant jurisdiction. He is on the same page as President Donald Trump and considers the lockdown a ‘power grab by fascists’. Tesla’s battery plant in New York has also been shuttered by these unspecified forces of evil.

Last week, during an earnings call with fund managers and major investors, Mr Musk questioned the constitutional legality of the stay-in-place order decreed by the six counties of San Francisco’s Bay Area as it imprisons people and deprives them of their basic rights. He also feels that his personal freedom to make money has been curtailed.

Tesla manufactures flashy, fast, and often faulty vehicles. The company was not amused when Netflix posted a new batch of episodes of its Fastest Car series. In one memorable episode, a Tesla Model S was pitted against a 1990 Nissan 300SX and a 1989 Ford Mustang souped up by bearded amateur grease monkeys. The car was soundly beaten on the quarter mile by both wheeled rust buckets. Though undeniably fast, the Tesla barely managed to outpace a heavily modified Toyota pickup truck, also partaking in the challenge.

Cabbies in Europe and North America also have a thing or two to report on the build quality and maintenance requirements of their Tesla cars.

All this is not to say that Mr Musk is pursuing his glory without guts, vision, or perseverance. He is in many ways a genius which almost inevitably results in a social deficit. However, as long as he sticks to the rules, all may be forgiven. The trouble is, Mr Musk doesn’t particularly care for rules.

Just about the last thing Europe needs is for Berlin and Brussels to clash. The EU is, to say the least, not amused by a ruling of the German Constitutional Court in Karlsruhe that could force the Deutsche Bundesbank to drop out of any future support initiatives by the European Central Bank (ECB).

The German judges seem to have overruled the European Court of Justice (ECJ) which in 2018 okayed the various ECB bond-buying programmes that sustain the continent’s sagging economy. European Commission chief Ursula von der Leyen, incidentally a former German defence minister, immediately threatened the country with sanctions and penalties should it allow national courts to forget their legal standing.

It is a well-established and perfectly logic legal principle – one against which in the UK Brexiters rebelled – that supranational courts such as the ECJ trump domestic ones. Should judges in all of the 27 EU member states be able to question EU law, the union would instantly cease to function. Anyone with a beef against the union may, however, approach the ECJ in Luxembourg for a ruling.

Earlier today, Chancellor Angela Merkel stepped in to re-establish order. She did so by stating that surely a compromise solution can be found and that she sees no need for heated argument or, indeed, threats.

The surprise ruling of the German court was promptly welcomed by Polish Prime Minister Mateusz Morawiecki who dislikes all things European and makes a habit out of ignoring his own country’s recent and more distant past.

With his usual holier-than-thou attitude that bespeaks of an innocence personified, Mr Morawieski appeared elated by the news from Karlsruhe and called it ‘one of the most important rulings in the history of the European Union’. He should know for Poland was one of the last countries to join the EU (in 2004).

The country has benefitted massively from Brussels’ generosity, receiving in excess of €17 billion annually for its €3.5 billion membership fee. Poland also profited from hundreds of billions in private investment that helped transform the country into one of the EU’s success stories.

Then again, Mr Morawieski doesn’t quite like the terms of EU membership and strongly objects to its insistence on judicial independence and the rule of law. Without enjoying the UK’s undeniable heft – and little good did that do – Poland, or at least its government, would like nothing better than to reduce the common market to a dumping ground for its unemployed and a source of cheap credit and juicy grants.

Mr Morawieski, isolated in Europe for his recalcitrance, has now found some allies in Karlsruhe. However, he is in for a surprise. The ruling of the constitutional court is by no means the last word on the matter. Chancellor Merkel knows that Mrs Von der Leyen is right when she upholds the supremacy of the ECJ. A face-saving solution is already now in the works, one that upholds the established order of legal things whilst preserving the dignity of the German Constitutional Court. However, the Polish prime minister may not be so lucky. His brother in arms over in Hungary, Viktor Orbán, proved much smarter and wisely refrained from commenting or grandstanding.

It is not just the Chinese government that mistrusts its people and thinks they cannot handle the truth. Today, it transpired that even the UK government fears public scrutiny and prefers to cloak its knowledge and actions with a shroud of mystery – or, somewhat less poetically, employ a black marker pen to blot out key parts of documents drawn up by the Scientific Advisory Group on Emergencies (Sage).

Interestingly, the behavioural scientists of the Sage subcommittee that in early April advised the cabinet on the likely public response to the lockdown measures under consideration noted that only the critical parts of their report had been heavily redacted. At least one of the advisers considers stepping down in protest against the government’s secretive approach that, he fears, may undermine public trust.

The collective of psychologists, epidemiologists, and anthropologists had warned the cabinet that the proposed lockdown measures, including stiff penalties for those failing to abide by them, could cause a public backlash. A suggestion to use smartphones to track people’s movements was also rejected by the subcommittee.

Though the government did listen to the scientists and toned down most of the draconian proposals submitted to the subcommittee, the cabinet apparently does not want the public to know how far it was prepared to go in restricting movement.

The scientists deplore the UK government’s unwillingness to accept criticism. This bespeaks of a misplaced lack in self-confidence. Most people would readily agree that the scope of the pandemic justifies some early mistakes. Going into the crisis, few within government had any experience in handling a pandemic. There was no tried and tested protocol to fall back on and a response had to be found quickly as the outbreak unfolded.

That the government of China does not believe in transparency is a given, considering its now resurfaced communist nature. Elsewhere, and particularly in Europe, one would hope that those elected to rule over us know plenty better. In the UK, now the epicentre of the pandemic in Europe, that seems not the case.

When asking a great sacrifice in the name of a common good, most will immediately respond positively. Asking is always better than demanding. Now more than ever before in living memory, people need to be able to trust their government and believe it is honest and forthright in all dealings. Transparency is without doubt the greatest weapon in the fight against the novel virus. Without it, the battle is lost. UK Prime Minister Boris Johnson, a victim of covid-19, should know this better than most.

And now for something completely different… Florian Schneider has passed away. French synthesiser virtuoso Jean-Michelle Jarre wished him Godspeed on eternity’s autobahn. Gary Kemp of Spandau Ballet acknowledged his debt to the architect and builder of music’s new Metropolis.

In 1970, Florian Schneider founded the German electro pop group Kraftwerk which grandfathered most, if not nearly all, that followed. However, the band’s music, though outwardly beguilingly simple in structure and texture, proved impossible to replicate. Iconic British 1980s groups such as Joy Division and its reincarnated-self New Order tried very hard and drew oodles of inspiration from the German Meister Gesellschaft, but never came close to the original mesmerising Kraftwerk sound.

Called the ‘Beatles of electronic dance music’ (by The New York Times), Kraftwerk showed that accoutrements deemed essential to pop music, such as drums and guitars, could easily be replaced by new-fangled synthetic instruments. At a time when the music charts were dominated by glam rock bands such as Slade, Roxy Music, and the rather lazily-named The Glitter Band, Kraftwerk burst onto the boring scene with Autobahn, a 23-minute long hypnotic ode to high-speed driving on Germany’s fabulous freeways.

In a highly fruitful cross fertilisation, Kraftwerk paid careful attention to David Bowie’s Station to Station for its own ground-breaking Trans-Europe Express album, and saw the favour promptly returned on Heroes, the equally revolutionary LP Bowie released in 1977 and which paid tribute to the Kraftwerk leadman with its track V2 Schneider.

Mr Schneider once remarked that Kraftwerk was not so much a band as a concept: a meeting of man and machine, and a vehicle for the expression of ideas. Long before computers became ubiquitous, Kraftwerk had already incorporated the digital realm its music.

Taking great care to cultivate a meticulously crafted image and preserve their undeniable mystique – a quality not usually considered a key element of German culture – Mr Schneider and his three fellow band members operated a machine running with clockwork precision, projecting a uniform yet somehow always novel image.

After a 17-year hiatus, Kraftwerk in 2003 released its final studio album Tour de France Soundtracks, incidentally the musical backdrop to the writing of this journal entry.

Florian Schneider, born April 7, 1947, died last week from cancer. He was 73 years old.

Look and read, but please don’t tell. This is, believe it or not, a defence of US President Donald Trump as he stumbles, trips, and bluffs his way through the corona pandemic whilst its centre of gravity shifts towards the United States. It is easy, almost gratuitously so, to deride the present occupant of the White House: He regularly makes a right old fool of himself with outlandish performances, blessing the nation with his peculiar out-of-the-box thinking and novel approaches to virology and immunology.

If anything, President Trump is as much at a loss as everybody else. Regrettably, he has much experience in being rather clueless but has nearly always managed to bluff his way out of a corner. Except, of course, for the four times that businesses he owned were forced to file for bankruptcy. Even so, Chapter 11 can be used as a clever stratagem to offload debt. Mr Trump is a smart, if not overly successful or trustworthy, businessman.

As commander in chief he is now expected to plot a course through uncharted waters. Like many of his counterparts elsewhere in the world, President Trump proved slow on the uptake. He was by no means the only one needing some time to let the true scale of the pandemic sink in. Being the greatest president, negotiator, and businessman ever to have walked the face of the earth, Mr Trump just had to insist that he was aware of the corona virus’ spread and impact long before anyone else.

Mr Trump tried to make the best of a bad situation in the only way he knew how to: proffering a white lie a New York minute – the Washington Post has now tabulated well over 18,000 alt-truths and false claims – whilst hoping that his ignorance would not show and, when it did, swooping doubters aside with an overpowering display of self-confidence.

It is of little use to blame President Trump for the thousands of deaths that might possibly have been prevented had he managed to live up to his self-aggrandisement. It is not as if Mr Trump suffered a sudden change in personality when he assumed the presidency. The man is who he is and has most certainly not fooled voters into believing him to be someone else.

In that sense, President Trump he been true to himself from his first day in office and has been scrupulously honest.

Initiatives such as the ‘death clock’ unveiled yesterday are, however poignant, slightly misplaced. The clock aims to track the number of corona fatalities directly attributable to the Trump Administration’s failings. Next time, US voters may perhaps want to be a bit less flippant and a bit more discerning when selecting their chief. In 2016, Americans wanted a showman as their president and that is exactly what they got.