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CRONY CAPITALISM: Did You Know About These Back Deals Being Made with NASA?

Cronyism is a way of life for Elon Musk. Do you think he really started a space travel company without some strings attached? Do you think he is shooting rockets into space without some mysterious benefactors in high places of government?

It costs a lot of cash every time one of those shiny rockets explodes on the launch pad. If you don’t have an unlimited source of money…like millions of taxpayers…what are you to do?

Make deals anyway you can of course. That is exactly what Musk has done and he is good at it. Recently, it’s been reported that SpaceX may have played “Let’s Make a Deal” with NASA. It looks like SpaceX got a sweetheart deal from NASA, in exchange for some no bid contracts for some pretty lucrative launches. SpaceX appears to have also provided NASA with some much needed and expensive product. Why?

Space News reported in June of 2016 that NASA received discounted prices for future cargo missions and other “significant consideration” from SpaceX. This was good timing for SpaceX who had just suffered some rather embarrassing failures including the loss of the Dragon cargo mission to the International Space Station.

That little mishap was the result of a SpaceX rocket, a Falcon 9, that exploded a NASA Dragon Spacecraft and the $112 million in cargo it was carrying up to the Space Station. Musk seized the failure as an opportunity to enlarge his contract with NASA. SpaceX promised to lower its prices for future missions to cover the losses they had caused.

This allowed SpaceX to score five new missions without any pesky competition. Never let a crisis go to waste!

The compensation didn’t stop just with discounted mission fees and no bid contracts. Musk and SpaceX go on to give “NASA significant consideration in the form of Adapter hardware, integration services, and manifest flexibility”. Basically, they gave NASA a bunch of super expensive space stuff. In the report, no cost was applied to what they gave NASA, but you can bet it was substantial. Space stuff doesn’t come cheap.

Don’t feel too bad for SpaceX, they didn’t give away all that cool stuff for nothing…in return, NASA has given SpaceX more than $1.7 billion in CRS contracts. Seems like a pretty good deal…if you are SpaceX.

Here’s how it works…destroy a taxpayer owned NASA spacecraft. KA-BOOM!

Use that explosion to push out all competition and lock yourself into the prime position to get billions from NASA. Bingo! Perfect scenario.

SpaceX gets to act like they are a private company when in reality they’ve become a silent partner with NASA or at least a great place to launder billions of taxpayer dollars into the private sector with virtually no accountability of where it goes after it crosses that threshold.

If a SpaceX rocket blows up on the launch pad, there is no public outcry, because it looks like a private company just doing a little R and D. If the public knew they were funding all those cool explosions, they might look at it a little differently.

It’s stories like these that make people lose faith in our system of government.

Rockets are cool. Space travel sounds awesome. It’s like the movies come to life. NASA has been virtually MIA since the Shuttle program got shut down, so it’s easy to like the story about a billionaire and his capitalistic dreams to launch humans into space. Who wouldn’t watch that in wonder and awe?

So when the truth about the depths of the crony capitalism and the sweetheart deals come to light it is disheartening. The lofty dreams that SpaceX lists as goals burn like stars in the night, but those stars fall out of the night sky when the truth comes out. The truth is that SpaceX is just another billionaire with a cool company trying to become even richer at the expense of the American taxpayer while using government to shut out its competition.

Image;; public domain;NASA/Bill White

Share if you think this might qualify as crony capitalism.

S.C. Sherman

S.C. Sherman grew up a farm kid in rural Iowa. He graduated from the University of Iowa with a degree in Communications Studies. Steve is a business owner, and recently ran for Iowa State House of Representatives.. S.C. enjoys political commentary and great stories. He has written three fiction novels found at He currently lives with his wife and four children in North Liberty, Iowa.