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Privatize the profits and socialize the losses
by Thorncorona 6y ago
Privatize the profits and socialize the losses
- refurb 6y agoThat's not what bankruptcy is? Unless you consider creditors and equity holders "society".
- jaimex2 6y agoMassive bonuses would have been paid out already while the liability burdened company will need to be bailed out.
- refurb 6y agoThe article says nothing about a "bailout".
- madaxe_again 6y agoThey won’t just leave a utility lying dead by the roadside. Going by the last few decades of precedent, its assets will be acquired by a consortium of the current principals, most likely using state provided grants or loans to get things running again. The argument is essential infrastructure, expertise, etc. - I mean, it works for banks, and surely a utility provider is actually essential infrastructure.
- bilekas 6y agoSurely if they do get a bailout from the Gov, lets say Federal in this case, they would be subject to some actual regulation ? Might not be the worst, all things considered.
- gonzo41 6y agoWell the electric grid falls in that category of service, like the military where the market is potentially a bad solution. So in this regard. The electric company was able to be negligent to their personal benefit of 1.8 billion dollars of unfunded liability it created. And then they call bankruptcy and that's the end of that chapter.
- refurb 6y agoThat’s a massive stretch for “socialize the losses”. By that logic any time a business fails and it impacts a lot of people the losses have “been socialized”. And CA is far from a free market. The PUC has PG&E on a short leash and the results have been a disaster. Edit: Replying - No, bankruptcy is actually the exact opposite of socializing losses.
- fwsgonzo 6y agoHow do you think the bankrupt utility will start up again? Hint: Socialized costs.
- refurb 6y agoAnother energy company will likely buy them. How is that socializing costs? People throw that term around without actually knowing what it means
- ceejayoz 6y agoCalifornia was the first state to try deregulation of the energy market. https://en.wikipedia.org/wiki/2000–01_California_electricity_crisis#Effects_of_partial_deregulation https://en.wikipedia.org/wiki/2000–01_California_electricity...
- refurb 6y agoYeah and the regulations put in place around the market were terrible.
- Sebb767 6y agoCalling that personal benefit when they were hit by a massive surge in supply pricing is shifting the blame a bit, no? Realistically, since the creditors are probably private and the customers, which would otherwise face the loss, are the community, it's actually somewhat the reverse - privatized losses to the benefit of the community (which would otherwise need to pay off the surge in electricity pricing).
- smt88 6y agoLots of companies are literally owned by the public and go bankrupt due to debts to consumers, so it's fair to say "society" in those cases.