Category Archives: political economy

The Judge Got It Wrong

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Matthew Whitaker, former Acting US Attorney General, disagrees with a Puerto Rico bankruptcy judge’s ruling regarding the Puerto Rico Electric Power Authority’s bankruptcy and the subsequent handling of the utility’s creditors. He wrote in his Fox Business op-ed that

[US District Judge Laura Taylor] Swain…concluded that special revenue bondholders do not hold a secured claim on current and future net revenues. As The Wall Street Journal explained in March, “A federal judge curbed Puerto Rico bondholders’ rights to the electric revenue generated by its public power utility.”
Furthermore, the ruling stated that the original legal obligation of the borrowers is not the face value of the debt, but rather what the borrower (in this case “PREPA”) can feasibly repay.

This is wrong. Whitaker is right. The borrower committed to repay what it borrowed, not what it might feel like repaying be able to repay in some speculative future.

This judicial error, though, has much broader implications than just the damage done PREPA’s creditors. Her ruling sets the ugly precedent that no borrower is liable for what he borrows, only for what he might be able to repay. That drastically altered risk terrain can only mean that lenders will be more reluctant to lend, particularly to lower income (and so with higher debt risk) folks and businesses, and that those lenders that do lend will do so only at markedly higher interest to account for the risk the amount they lend will not be recoverable in any guise, especially in the public—municipal—arena.

We’re the Government, and We’re Here to…Help

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Not some government personnel saying they’re from the government; they are the government. The People’s Republic of China plans to form a new government entity whose purpose, ostensibly, is to help out the PRC’s economic private sector.

[The PRC’s] National Development and Reform Commission, the country’s top economic planner, said Monday that it would set up a bureau to coordinate policies across different government bodies and help development of the private economy, the source of most of the new jobs and economic dynamism in the country.

This says it all, though:

The new bureau will be tasked with monitoring the country’s private economy and establishing channels for regular communication with private enterprises….

Those channels will become channels of control. “This is what you ought to do to increase performance. Be too bad if you don’t do these things.”

The NDRC’s claim is this:

Unlike the recently formed national data bureau, which also falls under the NDRC’s umbrella, the new department announced Monday won’t hold a vice-ministerial rank, suggesting it is unlikely to be a policy heavyweight in a vast government bureaucracy that has long favored the country’s powerful state-owned enterprises.

That won’t last. The new department will increasingly gain power as its controls strengthen. That’s not particularly unique to the PRC; all governments are populated by bureaucrats whose primary personal imperative is to hold onto/increase their power as part of their justification for their jobs. It’s just a stronger imperative for the bureaucrats of the PRC government, and especially for Emperor President Xi Jinping.

Thus, this is the government of the People’s Republic of China extending its control over the nation’s economy through a back window. I don’t write “the nation’s private economy” because that term in the PRC is a cynical euphemism for government-controlled businesses that are nominally privately owned. Mainland Chinese companies, along with those on Hong Kong and Macau, are too beholden to the PRC’s intelligence community’s “information” demands and to the PRC’s newly enacted “report on your friends’ and neighbors’ suspicious espionage activities” law.

Then Don’t Do That

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Senate Majority Leader Chuck Schumer says he wants to avoid brinksmanship and the risk of a government shutdown in the upcoming talks as Congress get back to work after its August month back home.

We cannot afford the brinkmanship or hostage-taking we saw from House Republicans earlier this year when they pushed our country to the brink of default to appease the most extreme members of their party.

If Schumer were serious, though, he’d cut out his obstructionism and work with Republicans to pass spending bills that represent true spending cuts; and he’d work with Republicans to make permanent the tax cuts enacted in 2017 and to further reduce tax rates; and he’d work with Republicans to pass legislation that would seal our southern border; and he’d work with Republicans on the sole rational spending increase, that for rebuilding our Navy and the rest of our military establishment.

Instead, he’s bent on his brinkmanship and on his decision to try to hold our economy hostage for his personal and his Party’s political gain. He’s pushing for another Schumer shutdown.

Buying Battery-Operated Cars

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My then-new gasoline-powered 2022 Ford Escape and my wife’s new 2023 Ford Maverick hybrid, each one level down from Ford’s top tier, each cost in the low- to mid-$30 thousands. Joanna Stern, The Wall Street Journal‘s Senior Personal Technology Columnist, evaluated a number of battery-operated cars under $60,000 to see which one of those she liked best. The ones she looked into were the Ford Mustang Mach-E, Tesla Model Y, Hyundai Ioniq 5, Kia EV6, and Volkswagen ID.4.

The prices of these, as tested, were—oh, wait; she didn’t discuss equipage in any detail, nor did she name the price of those cars as tested. Accordingly, here are the prices I found after an arduous five minute Bing search. All prices, save Tesla, are via Edmunds; Tesla’s prices are per Tesla.

  • Mach-E: $42,500-$60,000, depending on how gussied up you want it
  • Model Y: $52,900-$66,000, depending….
  • Ioniq 5: $47,700-$59,400, depending….
  • EV6: $45,900-$60,200, depending….
  • 4: $40,300-$56,500, depending….

Assume, arguendo, that Stern’s evaluations are reasonable (noting that some of her criteria are matters of taste), and truncate the gussying to Stern’s $60,000 cap. This is the cost of transportation that the Progressive-Democrat Biden administration is trying to force us to pay in the name if its—and the Left’s—climate funding industry and related artificial hysteria.

This is just to get into the car, too; the comparison elides questions of range; the availability of charging stations outside the home garage; the long time to charge to the battery-operated cars’ 300-ish miles range (my Escape reaches 400+ miles on a tank of gas, and the tank fills in three minutes, or so); and of special importance to the Left (except when inconvenient to them); the environmental damage done by mining the raw materials and disposing of the spent batteries.

Electrifying Transportation

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A Wall Street Journal editorial centered on California’s idiotic push to fully electrify cars and trucks—yes, including heavy duty freight trucks—within the next dozen years, has this tidbit, which is canonical in exemplifying such foolishness anywhere in the US:

One trucking company wanted to install charging stations for 30 trucks at a terminal in Joliet, Illinois, only to be told by local officials they would draw more power than the entire city.

And this, specific to California and its already existing green ideology:

In January northern California utility PG&E told a charging provider that one of its large fleet customers couldn’t charge its trucks on summer afternoons owing to a power crunch.

A power crunch which PG&E knew six months in advance was going to occur. It’s clear: neither facts nor the fiscal or quality of life costs of ignoring them matter to the mainstream Left. They’re right, and if you have questions about that, they’ll enthusiastically disabuse you of your questions. Never mind that

[a] Southern California Edison executive recently said some fleets are powering chargers using diesel generators so electric trucks don’t go unused.

Pay no attention to the zealot behind the door.