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Dangerous Foreign Credit Dependency

by Richard Lewis

Electrical deregulation was touted as a means of decreasing electrical cost by creating competition like the break up of Ma Bell. But deregulation has accomplished its real purpose, "dramatically increasing the cost electricity and natural gas" and "it has made U.S. utilities more attractive to foreign investors". The recent purchase of LG&E, Louisville Gas and Electric, by a British firm is one example.

Next as a result of public outcry over high energy cost Congress or the President will act, "high energy cost will continue" but the lower cost, low sulfur coal in Utah will replace the higher cost imported Indonesian low sulfur coal and that will create more profit for the utility companies operating in the United States.

If you think of Congress as a board of Directors that is supposed to represent the interest of their stockholders..... "their constituents" how would the board..... Congress justify enhancing the profits of utility companies at the expense of their stockholders...../constituents? Remember electrical production is a security issue during time of war!

The U.S. is either financially desperate and Congress is unable to think of other means or Congress is hellbent on destroying our Constitution, "robbing the stockholders" and remaking our political process.

If you would like to know more about U.S. foreign credit dependency read: Buying Into America by Martin and Susan Tolchin, Selling Our Security by Martin and Susan Tolchin, Who Will Tell The People by David Grieder, One World Ready or Not by David Grieder and Beyond Our Means. There are many excellent books on this topic.

(Editor’s note:  When two parties freely decide to enter into business relationships, they do so because they both believe themselves to be better off as a result.  This is true whether the parties involved live across the street from each other, in different states, or in different countries.  When governments restrict such free exchanges, preventing their citizens from doing what they think is most beneficial to them, they prevent these mutually beneficial transactions and thereby impoverish their country.  In our own country, we have seen that protectionist measures in the 1800’s crippled the southern states, provoking the civil war, and protectionist measures deepened the great depression of the 1930’s.  Free trade creates jobs, and consumers benefit from lower prices on the products they buy.  Free trade is a win-win proposition, benefiting all the parties involved. 

Capital investment is good for our economy, whether the capital is home grown, or whether it comes from people who live in some other country.  When Toyota built a factory in Kentucky, it benefited the workers and consumers of Kentucky as well as the Japanese owners.  When foreigners choose to invest in the U.S., it is generally an indication that we are doing something right, making our country an attractive place to invest.  As long as governments stick to enforcing contracts and protecting private property and do not skew the free market, such as by bailing out lenders, or by guaranteeing prices or profits, we can expect that people acting freely will, on the whole, use investments and trade to improve their own well-being in a manner that benefits society as a whole.  Imagine what life would be like if Governor Patton put up barriers to trade and restricted us to buying only products made in Kentucky.  Prices would skyrocket, and our productivity would greatly decrease. In most cases, when people are complaining about deregulation of an industry, the real problems stem from the failure to really deregulate.  For example, the energy problems in California are due to government interference in the market, not due to deregulation.  Our complaints should not be with deregulation of the market, which improves productivity, but rather with government interference in the market, which creates shortages, inefficiencies, and misallocation of resources.)

Light side:  You know that indestructible black box that is used on airplanes? Why don't they make the whole plane out of that stuff?