Friday, May 13, 2016


By Allan McNew

Part One

Part Two

Part Three

The Republican Party is a proponent of buzzwords like “free trade” and
the counter term “isolationism” without explaining which of the various
definitions of those words are being used. The following is a discussion
of “free trade” domestically and internationally.

Investor owned energy utilities, by realistic nature, are monopolies due
to the prohibitively expensive nature of constructing competing plant
structure, not to mention acquiring parallel right of ways. Utilities
are capital intensive as opposed to labor intensive.

Utilities tend to be heavily regulated. There are ways utilities manage
to gouge ratepayers, but most methods are not those most ratepayers,
activists and politicians are prone to believe.

Some years ago, California legislators who didn't understand the energy
market in the least, in a bid to reduce electrical rates to the consumer
embarked on “deregulation”, which essentially required utilities to sell
off their generation facilities and buy the bulk of, if not all of their
generated energy from “free market” third parties.

The way it worked before deregulation, utilities would utilize the
cheapest power available from the grid, which figured in their own
generation facilities. Let's hypothetically say that power could be
purchased out of the northwest for two cents a kilowatt hour while the
utility could generate for three cents a KWH. If the seller raised the
price to 3 cents or more per KWH, the utility would fire up it's own
generation and not purchase remotely generated power, whereupon the
seller would drop back down to two cents. The utilities would negotiate
what is essentially a cost plus return from the rate payers with a
regulatory entity, which in California is the Public Utilities

After California “deregulation” became a legislated fact, out of state
carpetbaggers bought up much of the generation facilities in addition to
constructing new facilities, then proceeded to game the market in a
manner which would shame a sociopathic loan shark.

The utilities were subject to stratospherically high free market prices
without being able to pass the costs on to the consumer, which would
have raised such a negative public reaction that then current
legislators would never have had a political future afterwards. But,
legislators in Sacramento seemed to be rather gleeful about the
situation, perhaps thinking they were going to break the utilities. The
left probably anticipated being able to exploit one capitalist entity
destroying another capitalist entity in terms of progressive-socialist
propaganda and eventually seizing collapsed corporate service providers
to be converted to government owned and administered public services.
The right was probably all over the map from economic Darwinism to
economic protectionism.

However, what the utilities did entirely stopped the Sacramento high
fiving and wiped the grins off of legislative faces. If I remember
right, PG&E filed for bankruptcy, SCE funneled its cash into non
regulated, legally separate sister companies and informed Sacramento to
the effect, if not directly stated, that if Sacramento didn't pick up
the overage cost Southern California would go in the dark. I don't
remember what SDG&E might have done, and being a municipality LADWP was
exempt from “deregulation”.

“Deregulation” “free trade” damage financially knocked the California
state government to its knees, and the only good thing I see that came
from it is as part of associated turmoil the utilities were forced to do
much of the maintenance they were already paid to do through the rate
base but were not doing.

The state, and therefore taxpayers, wound up paying for the economic
evil Sacramento had wrought. With the exception of Enron, I believe most
of the carpet bag, highway robbers got away free and clear.

As well, all manner of subsidization of "green energy", through the tax
base, through the rate base and through financially punitive measures
designed to force energy usage change has resulted in California having,
if not the highest, among the highest energy costs in the nation. Which
takes away monetary resources on all levels and of all types which would
otherwise be going to profits, higher wages, greater employment, and
cheaper costs of necessities and luxuries. The dollar would go further
and the economy would expand.

International “free trade” advocates leave out some inconvenient facts
concerning “free trade” in theory as opposed to “free trade” practice.
Adam Smith's “Invisible Hand” doesn't apply to the current practice of
“free trade”.

“Free trade” advocates tell us it is in the consumer's interest to have
only a Hobsen's choice of which shoddily manufactured, prone to early
failure, foreign sweat shop derived product is available for domestic
purchase. They will us that consumers want inexpensive products and that
they are doing the public a favor by providing them.

What they don't tell us: the trade dollar income needs to be greater
than the trade dollar outgo, otherwise it's a losing transaction. There
has to be a national profit in addition to international corporate
trading profit.

Of course there is no profit for anyone in the “isolationist” hacienda
model of business, but a household which has less income than
expenditures will soon find itself not being able to afford essentials,
much less shoddy, cheap goods.

So, if we export money and jobs while importing only cheap labor –
skilled and unskilled, we're done. Eventually it will be over and the
lights will go out. No one ever profited by spending more than they took

This has negatively affected the public, and corporateers and
politicians on both sides of the isle profiting from the status quo
think the American people are too stupid to figure it out.

Then Trump showed up, talking about trade imbalance, the American people
getting screwed with foreign trade, deportation of jobs and importation
of foreigners which either suck up domestic jobs or consume public

Trump became the front runner.

-- Political Pistachio Conservative News and Commentary

No comments: