An editorial, worth reading
California, the Picture and Prime Example of Socialist-Capitalism
The entire country has watched, as large areas of California lost electricity. Once again, the Santa Anas blew, necessitating the black-out. What does the one thing have to do with other you might ask—the connecting factor is Socialist-Stakeholder-Capitalism.
Pay attention America, for this is what the left of the Democratic Party has in store for you. Allysia Finlay opines in the Wall Street Journal Tuesday, October 22, 2019 that PG&E, the perfect corporate socialistically imbued citizen, is lambasted by Gov. Gavin Newsom and other Democrats for shutting off power. Why the shut-off? The blackouts are put in place to avoid more electrical fires, for an aging electrical grid has not been properly maintained. Why not, you might rightly ask? Here is Finlay’s analysis.
“PG&E exemplifies the left’s “stakeholder” model according to which businesses are accountable not only to their shareholders but also their workers, the environment and local communities, and society at large. In practice that means to serve their political overlords.”
That model flies in the face of capitalist business law, which predicates that business has two functions. One obligation is to create wealth. The second obligation is to create profit for their shareholders. In order to keep being a high wealth producer, all aspects of the business must be maintained at top functionality and productivity, requiring large amounts of investment. So, when PG&G became one of the most heavily regulated businesses in California—its profits are set by the California Public Utilities Commission and the Federal Energy Regulatory Commission—it became poor.
Every three years the utility must submit funding plans to the CPUC that are then analyzed during public hearings with “stakeholders” that are composed of customers, environmentalists and other activist Groups. At this point one must ask what stake, other than controlling the utility, do these activists and customers have in the business? Being a shareholder in business parlance means you have invested something of value into the business entity. PG&E receives nothing of value from its new “stakeholders” but constant pressure on how to run the business. Thus, state law requires utilities to obtain 60% of their power from “renewable sources by 2030.” Furthermore, the commission has ordered the utilities to buy energy from homeowners with solar panels. They must pay them a higher rate than wholesale power providers get.
The utility has not kept detailed records on the age or condition of its transmission towers and wires, but, notes Findlay, “it knows that 1.2% of its workforce is American Indian and 0.6% Native Hawaiian or Pacific Islanders.” These are a few statistics PG&E records well. The utility was forced to install 7500 electric car changing stations at apartment buildings and work places, it donates hundreds of thousands of dollars to liberal advocacy groups such as Black Women Organized for Political Action, for the LGBTQ Victory Fund and the labor-affiliated group “Building and Protecting a Strong California,” and of course, in 2018 it contributed $208,000 to Gov. Newsom’s campaign.
What is the result of such societal largess? In January PG&E filed for chapter 11 bankruptcy, for it needed to restructure tens of billions of dollars in liabilities. In the end, the consumers will pay much, much more for their electricity. Findlay believes that consumers might turn against the state’s climate goals when they find out how the high price is for green energy mandates, and social programs.
We all owe a debt to Ms. Allysia Finlay for her in-depth Research.
