The Wrongologist – Page 200 – Geopolitics, Power and Political Economy

Sunday Cartoon Blogging – January 17, 2016

Another jam-packed news week: David Bowie stepped through the door, the Dow fell through the floor, the SOTU had the lowest ratings ever, the Republicans debated, and you didn’t win Powerball.

So, something to cheer you up at the start your week:

COW Foxes

Gonna miss ol’ Ziggy:

COW Bowie2

Wall Street longs for yesterday:

COW Lost Pet

The GOP debate followed the usual script:

COW Big Tent

Republicans are beginning to rationalize about the probable primary winner:

COW Satan for Prez

In this primary season it has become clear that facts don’t matter. How you feel matters. Other people don’t matter. How you relate to your tribe matters. Irresponsible tax policies, silly monetary policies (gold!), destructive foreign policy, no climate policy, no healthcare policy, no infrastructure policy, charter schools as an education policy, these all matter. Except for militarism, do they have any public policy positions?

The Clintons begin to understand the threat:

COW First Word

Evangelical Voters Have Big Influence on Primaries

As we continue our deep dive into American demographics and its impact on politics, today, let’s consider the role of evangelical Christians in our primaries. In Iowa, evangelical and born-again Christians account for 60% of those who attend Republican caucuses. Last fall, The Economist published a chart showing the percentage of evangelicals by state, and each state’s power at the Republican Party convention:

Evangical Voters

The Republican candidates are trying hard to court evangelicals. Nationally, Ted Cruz has a 64% favorable rating among evangelicals, according to Public Policy Polling (PPP), behind Ben Carson, who has a 69% rating. Marco Rubio and The Donald are at 54%.

Blog readers may remember our review of “One Nation Under God” by Kevin Kruse. In that book, Kruse shows how Rev. Billy Graham influenced our politics for 50 years. He believed that our way of life and our economic system were ordained not just by God, but by the Christian God.

Billy Graham said during the 1952 presidential campaign:

The Christian people of America will not sit idly by…They are going to vote as a bloc for the man with the strongest moral and spiritual platform, regardless of his views on other matters.

Well, Billy’s son, Franklin Graham, has a group called Decision America that is conducting a 50-state tour to energize Christians to vote. From his website:

I’m going to every state in our country to challenge Christians to live out their faith at home, in public and at the ballot box…

Franklin Graham has been involved in politics before. He supported Romney. He has backed ballot initiatives opposing gay marriage; he led prayers at the first inauguration of President George W. Bush.

Like many evangelicals, he sees a pattern of bullying by secular forces and their allies in government. He worries about Christian employers having to fund health insurance that covers birth-control, and wonders if religious colleges will one day have to admit gay students (like they don’t already!).

As Kevin Kruse shows, the history of American Christianity is full of prayer meetings in which the faithful bewail a nation adrift, and vow—like the tribes of Israel before them—to stand fast in the face of tyrannical rulers. At his kick-off meeting in Des Moines, IA, Franklin noted that:

…an estimated 20 to 30 million Christians stayed home in the 2012 election.

He wondered what our country would look like if city councils, school boards and mayor seats were filled by believers in the next two or three elections. And he urged Christians to not only vote in next year’s elections but to run for office at every level of public office. Franklin Graham will not be supporting any specific candidates or parties. He says that he left the Republican Party in late 2015 in favor of an independent status.

Gee, political enlightenment came just a few months ago.

But today, most American politicians are already believers. HuffPo says that 92% of 114th Congress are Christian. Compare that to the 73% of American adults who are Christian, according to Pew Forum. A full 99% of Republicans in Congress are Christian, compared to (only) 81% of the Democrats.

And Graham’s not being a member of a political party is a fiction. His agenda is supported by just one party, the one that his 97 year-old father affiliated with back in 1952. The party that already has 99% of its Congress people affiliated with the Christian religions. And it takes a fair amount of cognitive dissonance for a religious group that already has a supermajority of Congress and takes an absolutely important part in our politics to claim persecution at the hands of the government.

Franklin Graham may be a bit more subtle in 2016 than he was in 2012, but you have to wonder if his ultimate goal is to impose his own version of Christianity on the entire nation.

The Old Time Religion of both Billy and Franklin Graham has a deep, visceral attachment to the Republican Party from the marriage of capitalism to Christianity in the 1930’s that promoted religious hostility to the New Deal, to convincing Eisenhower to add “In God We Trust” to our currency, and “Under God” to our pledge of allegiance.

That Old Time Religion is still at work for the GOP, even if Franklin Graham says he is non-partisan.

Angry Men Now a Political Force

The spin after the SOTU was about how angry voters are, and the political opening that creates, despite the genuine good news on the economy. Here is Mr. Obama from the SOTU:

Most of all, democracy breaks down when the average person feels their voice doesn’t matter; that the system is rigged in favor of the rich or the powerful or some narrow interest.

We can’t change the fact that some people are angry, but this article from the Washington Monthly by Andrew Yarrow points to some stunning facts about how men in particular have been left by the wayside of American life:

At least 20% of the nation’s 90 million white men have been pushed to the sidelines, either retreating or storming out of the mainstream of American life. They are not the men you see at work, who play with their children, go out with their wives or partners, are involved in their communities, and earn a living to save for their children’s education and their own retirement. What they do doesn’t register in…the gross domestic product…

Yarrow continues:

We know that they are out there. But they don’t fit old stereotypes of failure, so we’ve had trouble coming to grips with who they are or naming the problem. Parts of their stories have garnered significant attention, but we don’t see that what have been treated as separate problems are closely related.

Here are a few statistics from the article that merit your attention:

• Today, fewer than seven out of ten American men work; in the 1950s, nine out of ten worked.
• Since the 1970s, inflation-adjusted incomes for the bottom 80% of men have fallen, with the most dramatic declines occurring among the bottom 40%, most of whom do not have a college education.
• Today, just half of men are husbands; in 1960, three-fourths of men were married.
• As Barack Obama leaves office, only two out of three children live with their fathers; when John Kennedy was elected President, nine out of ten children lived with their fathers.
• Today, 43% of 18-to-34-year-old American men live with their parents (compared to 36% of millennial women); in 1960, about 28% lived at home.
• There are 36% more women in college than men, whereas in 1970, there were about 35% more men than women in college.
• Men are 50% less likely to trust government than women.
• In recent years, there has been a roughly 20-point gender voting gap, with white men being much more likely not only to vote for Republicans but to express disillusionment and anger toward government; until about 1980, men and women voted roughly evenly for Democrats and Republicans.

The point is that a lot has gone wrong for many white men, a demographic that once was the epitome of privilege and high expectations. And while politicians discuss stagnant wages, broken families and inequality, few notice, much less talk about the probable linkages between these issues and the impact of angry males on our politics.

Some may be thinking that this is a manufactured issue. After all, men still out-earn women, and they still hold most of the CEO and board–level jobs. And none of this white male angst should obscure the continuing struggles of women and people of color, including men of color. African-American and Latino men have had it worse than white men for a very long time.

But we ignore any group’s anger at our peril. The Bundy Brigade’s antics in Utah and Oregon is just one recent example. Many men are mad as hell, and their anger is often turned on scapegoats: Government in the case of the Bundys; Muslims, immigrants, African Americans, and Latinos in the case of others.

In 2016 we are seeing several presidential candidates feeding from the trough of this anger. Playing to the inchoate anger of a sizable minority of white men who have been benched economically, or who simply left the field, is a dangerous demagoguery, one that only benefits the demagogues.

Can You Trust Your Local Government?

Citizens are supposed to be able to trust their elected governments, local, state and national. But, surveys show that Americans have very little trust in government. In fact, an October 2015 Pew Study shows that only 19% trust the federal government “all or most” of the time.

This brings us to Flint Michigan. Flint’s citizens have been drinking, cooking and bathing in poisonous water.

The decision to expose Flint residents to known risks of lead poisoning were made by an unaccountable “emergency manager” who was installed by the governor, Republican Rick Snyder, in order to solve the fiscal problems created by the city’s declining tax base.

In April 2014, Flint’s emergency manager, in order to save money, directed the water company to begin drawing water from the Flint River rather than from Detroit’s water system, which was deemed too costly ($1.5 million/month). But the river’s water was high in salt, which helped corrode Flint’s aging lead water pipes, leaching lead into the water supply.

Problems were apparent almost immediately: The water started to smell like rotten eggs. Engineers responded to that problem by increasing the chlorine level. GM discovered that city water was corroding engines at their Flint factory and switched sources.

Then children and others started getting rashes and falling sick. Marc Edwards, a Virginia Tech environmental-engineering professor, found that the water had nearly 900 times the recommend EPA limit for lead particles. Yet as late as February 2015, even after tests showed dangerous lead levels, officials were telling residents there was no threat.

But in September 2015, two independent studies found that the lead levels in Flint’s water were absurdly high, and in October, 2015, Flint once again began buying water from Detroit.

On January 5th, 2016, Governor Rick Snyder declared a state of emergency due to lead in the water supply. The same day, the US Department of Justice announced that it is investigating what went wrong in the city. Several top officials have resigned, and Snyder apologized. But that’s cold comfort for Flint residents, particularly children, who are being poisoned by lead, which can cause irreversible brain damage and affect physical health.

And it could cost $1.5 billion to fix the problem, a staggering sum for a city struggling financially like Flint. Worse, six months ago, Rick Snyder’s Chief of Staff knew about it and expressed concern:

These folks are scared and worried about the health impacts and they are basically getting blown off by us (as a state we’re just not sympathizing with their plight).

So, the Flint story is hands down one of the worst abuses of government power in a long time. Money took precedence over people’s health. An unaccountable emergency manager who in a possibly well-intended effort to save the city $1.5 million a month in water fees, changes the source to the Flint River. In December 2014, a city employee tested the water of a woman whose son had gotten a rash after swimming in a pool.

He found that the lead level in her water was 104 parts per billion, about seven times greater than the lead level the EPA deems “actionable.”

BTW, Michigan voters repealed the Emergency Manager Law in 2012, but the Republican-controlled state legislature then passed a more far-reaching, emergency-manager law, one that could not be repealed.

So, what conclusions can we draw? Could the failure in Flint be used by conservatives to say?

See? You can’t even trust government to provide you with clean water anymore. We need to privatize the water company right now!

Or, the really damning take away is the emergency manager tried to save some money in a way that actually requires more money be spent, but did it anyway, apparently after being told about the problem, which poisoned people!.

OTOH, the fine citizens of Michigan re-elected Mr. Snyder, who took away the democratically elected team in Flint, and granted power to his appointed Publican. But the voters are not to blame. It is one thing to accept some right-wing economic BS, or to be too lazy to vote.

The penalty for either of those shouldn’t be that your government poisons you and your children.

St. Ronnie told us government was the problem, not the solution. And Rick Snyder’s cost-cutting steps seem to prove Ronnie was right (at least if government is run by the GOP).

It is hard to care about “Islamic terrorism” when your government knowingly poisons your city’s water supply in order to save money (in the short term).

And what is the criminal penalty for 10,000 cases of child endangerment?

Misinformed vs. Uninformed (Cont.)

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” (Mark Twain)

Yesterday, we linked to an article describing the difference between being misinformed and being uninformed. Uninformed people have no information about a subject, while those who are misinformed have information that conflicts with the best evidence and expert opinion.

How are so many people getting misinformed, and staying that way? Why does it work?

You probably have never heard of Robert Proctor, from Stanford, who wrote a book about ignorance, in which he tries to answer the question: What keeps ignorance alive, or allows it to be used as a political instrument? He calls this “Agnotology” (the study of ignorance). Proctor’s point is that ignorance has a political geography, and there are things people will work hard to keep you from knowing.

Apparently, his work started with the tobacco industry, who at some point used the slogan: “Doubt is our product“.

Proctor explains that ignorance can be propagated under the guise of balanced debate. For example, the common media approach that there are two opposing views does not always result in a rational conclusion to readers or viewers. This was how tobacco firms used science to make their products look harmless. It is still used today by climate change deniers to argue against the scientific evidence.

Procter, from the BBC:

This ‘balance routine’ has allowed the cigarette men, or climate deniers today, to claim that there are two sides to every story, that ‘experts disagree’ – creating a false picture of the truth, hence ignorance…We live in a world of radical ignorance, and the marvel is that any kind of truth cuts through the noise…Even though knowledge is ‘accessible’, it does not mean it is accessed.

Sound familiar?

In a December focus group with Trump supporters, David Frum, long-time Republican pollster, found that when negative information about Trump was presented, it strengthened the group’s support for him. Participants in the group held on more confidently to their misinformation as the session progressed.

We know that this is a symptom of the culture of American anti-intellectualism. Conspiracy theories have the same clout as legitimate science; the opinions of non-experts are just as credible as those of the experts; and ideology takes precedence over the cold hard facts. In this world, Trump is merely a symptom of that ethos and an industry dedicated to propagating doubt.

We all remember Stephen Colbert saying: “reality has a well-known liberal bias.”

And consider a 2012 study that found when people are prompted to use their critical faculties, they become less likely to affirm religious statements. They found that there’s a causal link between “analytical thinking” and religious disbelief.

Perhaps the worst (best?) example was the Republican Party of Texas rejecting critical thinking in its 2012 platform:

We oppose the teaching of Higher Order Thinking Skills (HOTS) (values clarification), critical thinking skills and similar programs [that] have the purpose of challenging the student’s fixed beliefs.

Hmmm. Teaching HOTS can give you the HOTS? Doubtful.

Perhaps it’s a better thing to not know the facts, instead of knowing a few pretend facts. At least, the uninformed person is persuadable by evidence.

The right-wing noise machine has fed hatred, bigotry, fear and loathing to its base supporters for decades, and Trump is the logical outcome. Most people aren’t all that logical when it comes to politics or political issues, since most of us tend to be ruled more by emotions. But the right-wing propaganda juggernaut has brainwashed some of its followers to the point that they are completely impervious to facts.

The Republicans are not going to laugh the Donald off their stage. They are not going to dissuade his core supporters, the only question is will his supporters vote in the Republican primaries.

If they do turn out, it will be The Donald vs. The Hill in 2016.

News you can’t use – January 11, 2016

Powerball vs. Trump’o Rama:

COW Powerball

“They say the odds of winning are one in two-hundred and ninety-two million,just slightly better than the chance Donald Trump makes America great again.”

More political news you can’t use:

Trump supporters appear to be misinformed, not uninformed. (538) Americans who have incorrect information can be divided into two groups: the misinformed and the uninformed. Trump’s backers show signs of being misinformed. The difference between the two is stark. Uninformed citizens don’t have any information at all, while those who are misinformed have information that conflicts with the best evidence and expert opinion. Political science research has shown that the behavior of misinformed citizens is different from those who are uninformed, and this difference may explain Trump’s staying power. 538 quotes political researchers as saying the most misinformed citizens tend to be the most confident in their views and are also the strongest partisans.

The towns that love Donald Trump the most. (WaPo) Trump is increasingly holding rallies in cities that rarely see presidential candidates in the primary season. They are also often places that are struggling. They lag behind the country (and their home states) on a number of economic measures. Their median household incomes are lower, and they often have lower rates of home ownership or residents with college degrees. Even though most of these cities have sizable minority populations, the crowds at Trump’s rallies are nearly entirely white. Is Trump planning a third-party run?

Sanders outperforming Clinton in general-election match-ups. (NBC News) Sanders outperforms Clinton in hypothetical general-election match-ups in NH and Iowa. In Iowa:

• Clinton leads Trump by eight points among registered voters (48% to 40%), but Sanders is ahead of him by 13 (51% to 38%)
• Cruz tops Clinton by four points (47% to 43%), while Sanders beats him by five (47% to 42%)
• Rubio is up by five points over Clinton (47% to 42%), but he’s tied with Sanders (44% each)

In New Hampshire:

• Clinton leads Trump by one point (45% to 44%), but Sanders tops him by 19 points (56% to 37%)
• Cruz beats Clinton by four points (48% to 44%), but Sanders leads him by another 19 points (55% to 36%)
• Rubio bests Clinton by 12 points (52% to 40%), while Sanders leads him by nine points (50% to 41%)

The primary reason why Sanders tests better in these general-election match-ups is due to his stronger performance with independent voters.

Other news you can’t use:

Who owns US business? How much tax do they pay? (NEBR) Pass-through entities, partnerships, tax code subchapter S corporations and sole proprietorships, are not subject to corporate income tax. Their income passes directly to their owners and is taxed under whatever tax rules those owners face. In 1980, pass-through entities accounted for 20.7% of US business income; by 2011, they represented 54.2%. Over the same period, the income share of the top 1% of income earners doubled. The growth of income from pass-through entities accounted for 41% of the rise in the income of the top 1%. By linking 2011 partnership and S corporation tax returns with federal individual income tax returns researchers find that over 66% of pass-through business income received by individuals goes to the top 1%.

Last fall, a 7-inch well pipe ruptured 500 feet below the surface of Los Angeles. It was 60 years old. The resulting methane leak is now being called one of the largest environmental disasters since the BP oil spill has pushed thousands of people out of their homes. (Vox) But it’s not the first time this well sprang a leak, and Southern California Gas Company (So Cal Gas), which owns and operates the well, knew it. Will heads roll?

Licensed gun owners can now bring their firearms into Texas’ 10 state psychiatric hospitals. (American-Statesman) Until this year, guns were banned at Texas’s state-run psychiatric facilities. The new Texas open carry law allows gun license holders to openly carry their firearms, including inside the psych hospitals. A second Texas law fines state agencies for wrongly hanging “no guns” signs. Yet hospital employees are prohibited from bringing guns to work.

Sunday Cartoon Blogging – January 10, 2016

Quite the week. You thought that the Saudi/Iran blow-up would dominate the news, until North Korea’s claim of a Hydrogen Bomb test took over the front page, but then, global stock markets melted down, following China’s markets into the crapper. And for relief, we had the President’s Executive Order on Gunz, the Bundy Brigade in Oregon, and the presidential candidates.

Some Asian explosions look alike:

COW H Bomb

Trump’s idea on North Korea’s new toy:

COW Trump Strategy

Between Lil’ Kim and Trump, the Donald having his finger on the button is a LOT mo scary!

Obama’s tears were not the only ones last week:

COW Tears The logical conclusion of 2nd Amendment Absolutism:

Clay Bennett, Chattanooga Times Free Press

Bundy Brigade take over causes momentary outrage:

COW Bundys Boys Saudi Arabia vs. Iran: Make sure we have no skin in their game:

COW Saudi Iran issue

Are the Bundys America’s Y’all Qaeda?

Off Topic: Here is your last Santa photo of the season. Santa dodges tear gas in Bethlehem, 2015:

Santa in Bethlehem

Source: The Economist

Everyone is following the story of the standoff in Oregon’s Malheur National Wildlife Refuge, waiting for the next ugly shoe to drop: Will the authorities shut down the Ammon Bundy crew? Will bullets fly? Will they wait them out? As Josh Marshall said: (emphasis by the Wrongologist)

…we just confirmed from Oregon State police the Ammon Bundy and his crew, who appear to be running low on supplies (Fritos, beef jerky, pizza, etc.) are actually free to come and go as they please. So if they need more food they can just leave the standoff, drive off to the nearest grocery store on a food run and come back and keep up the historic siege.

Who Has the Answer For 2016?

We have entered the presidential election year, but we, the people, really do not see any candidate as the answer to our problems. Voters on both sides of the aisle think the country needs to turn a page. We are frightened and angry, and increasingly feel that the two parties have no answers to our questions about tomorrow.

The Democrats say the choice is Hillary or Bernie.

The Republicans say we should choose between Trump, Marco, Ted or Jeb!

Consider what Tom Friedman said in Wednesday’s NYT: (emphasis by the Wrongologist)

The agenda that could actually make America great again would combine the best ideas of the extreme left and the extreme right. This year is probably too soon for such a radical platform, but by 2020 — after more extreme weather, after machines replace more middle-class jobs, after more mass shootings and after much more global disorder — voters will realize that our stale left-right parties can’t produce the needed answers for our postindustrial era.

Ok, agreed! Friedman argues that it’s time for an extremist, a nonpartisan, whose platform draws ideas from both sides. To give Friedman his due, he outlines a fairly radical agenda that includes universal health care, a form of income guarantee for low wage earners, increased military spending along with some unintelligible tax reform:

Slash all corporate taxes, income taxes, personal deductions and corporate subsidies and replace them with a carbon tax, a value-added consumption tax (except on groceries and other necessities), a tax on bullets and a tax on all sugary drinks — with offsets for the lowest-income earners.

A Value-added Tax? Instead of a progressive income tax? That’s the icing on Tom’s pro-business cake.

So he has some good ideas, and some that won’t work. That makes him the same as our two political parties. Much of the problem can be traced to the Democratic Party walking away from its intellectual base in the New Deal and the Great Society, and failing to offer better choices. As Sam Smith says:

It’s [the Democrats] failure to come up with alternatives, [while following] an agenda that appealed to comfortable and more upscale liberals rather than to ordinary Americans.

Bernie Sanders is a New Deal Democrat in “democratic socialist” clothing. He is the first democrat in decades to look outside the box for solutions to the problems our current economy visits on average people. It is unlikely that he will beat the Clinton political machine in 2016.

Hillary Clinton leads in the primary polls, but is she electable in the general election? No one should enter the 2016 general election thinking that HRC isn’t a vulnerable candidate. Democrats seem to forget that in 2008, she lost to a little known black guy with a minimal political record.

If voters are looking for a political savior, Hillary is more of the same middle of the road economics with a slight tinge of social liberalism that Mr. Obama offered.

The question is, has the country moved past that kind of “political triangulation” that Bill Clinton perfected in the 1990s? In 2008, Mr. Obama won as a new breed of politician. By 2012, with staunch legislative opposition from the GOP, he was triangulating to win a 2nd term. Can triangulation work again for Hillary?

Sam Smith points us to the age issue:

Nobody’s talking about this, in part because Donald Trump and Hillary Clinton would each be the oldest presidents except for Ronald Reagan. But what if Clinton at 68 faces Rubio or Cruz, both in the mid-forties? It makes the image of a new future considerably harder to project.

He might add that Bernie Sanders is 74 now. Ronald Reagan was 78 at the end of his 2nd term.

So what’s the alternative? It is too late for 2016. Partly due to the strength of Hillary’s resume, the Democrats have no viable alternatives. If Ms. Clinton stumbles, the Democrats would be trying to win with Bernie Sanders, who might do well, but who could also make the George McGovern 1972 shellacking seem like a win. This is indicative of a huge problem for Democrats: It has no viable bench.

Assuming that Clinton is the Democrats’ choice, her liabilities could be lessened by treating the campaign more like a struggle between opposing parties instead of one between political celebrities. The argument becomes: if you want to retain Constitutional freedoms that are under attack by a conservative Supreme Court, if you want to keep Social Security, Medicare, food stamps and other social programs, if you want less foreign adventurism, then you have to vote Democratic regardless of what you think of Hillary Clinton.

Despite the fact that many of us are desperate for something shiny and new, this contest is not a “Survivor” or “American Idol” TV series.

It’s the 2016 presidential election.

Pacific Gas Gooses Prices: Why?

Pacific Gas and Electric is America’s largest electric utility and the second largest gas utility measured by number of customers. You may remember that their gas pipeline exploded in 2010 in San Bruno CA, just south of San Francisco, killing 8, injuring 66, and burning down 38 homes. The legal fallout is still in the courts, with the trial scheduled to begin on March 8 in US District Court in San Francisco.

PG&E announced a price increase on December 30, when few would be paying attention. SF Gate carried the customer-friendly part of the announcement:

We want our customers and their families to know that we are here to help them make smart energy choices and save money whenever possible…

That’s corporate-speak for turn down the heater, put on another fleece, buy more efficient appliances, and find subsidies available to low-income households.

The increase was effective two days later, on January 1st. It will hike natural gas rates for the average residential customer by 4.0% and electricity rates by a stunning 8.5%, for a combined rate increase of 7%, the steepest since 2006.

Utilities raise prices all the time. But maybe a few things about PG&E’s price increase are worth a look:

• Natural gas prices have fallen steadily since 2008, much of the power PG&E distributes is generated by natural gas. In fact, in its third quarter financial statement, PG&E says its cost of electricity over the first nine months of 2015 dropped 8.8% year-over-year, and its cost of natural gas plunged 36%.
• The California Public Utilities Commission (PUC) agreed in 2014 to let PG&E collect an extra $2.37 billion in revenue from its customers over three years, through the end of 2016. The additional money will pay for maintenance and upgrades to PG&E’s sprawling electricity grid and natural gas pipeline network.
• PG&E pays quarterly dividends of $0.455 per common share. With 489 million shares outstanding, dividends for a year would amount to $890 million.So for the three-year period in question (2014-2016), this amounts to about $2.7 billion, which would have paid for the maintenance and upgrades of its system.

There’s more: In September, PG&E asked the PUC for another $2.7 billion in revenue increases for the three-year period of 2017-2019. That particular amount of money would be used ostensibly to prepare for natural disasters. But, as Wolf Richter reports, over the same period, PG&E would pay out another $2.7 billion in dividends.

The PUC, already under federal grand-jury investigation for its ties to PG&E about the San Bruno disaster, hasn’t voted on this increase. If PG&E had a real regulator, it would be forced to pay for maintenance and upgrades with funds it sourced from something other than rate increases. Particularly when its fuel costs are plunging, and it’s paying out an $890 million annual dividend.

PG&E’s is following the “maximize profits and shareholder value” dictates of a modern market-driven corporation. But in the case of private utilities, the state regulator is supposed to review rate applications and ensure the company is not reaping excessive profits and is charging fair prices.

That the CA PUC allowed these price increases perhaps demonstrates incompetence, or excessive favoritism. Help may be on the way: SF Gate reports that Gov. Jerry Brown shook up the five-member utilities commission, nominating one of his former top advisers, Michael Picker, to be its new president. He also nominated Liane Randolph from the state’s Natural Resources Agency to join the commission. So, perhaps the back-room deals are over, but Californians will have to wait and see.

Capitalism, like any game, needs referees who are beyond influence. The clear operating strategy of the “free market capitalists” is to have regulators of all stripes squeezed by lower funding and by packing the regulatory boards with industry insiders. Far too many of the referees (regulatory agencies) are insiders in the industry game.

Maybe there is help on the way in California. If not, maybe it’s time to put a few corporate heads up on pikes in the California sun!