This was an extremely interesting read. The consequences of this activity, the complicity of society allowing and reinforcing the conditions that make this activity possible, and the math that...
This was an extremely interesting read.
The consequences of this activity, the complicity of society allowing and reinforcing the conditions that make this activity possible, and the math that just doesn't add up.
It's high time for investment in regulatory capacity: the laws of the land aren't worth the paper they're written on if people aren't held to account.
These should be easy wins in Congress. If the two parties can't agree on enforcing their laws, or make law enforcement for companies and regulations of business, for rules-based and fair playing fields, then we might as well pack up.
I have a fairly pessimistic view of the future. From the article: Diversified is not the only company who "helps" craft bills that allows them to profit off of pollution. There is a sickness in...
I have a fairly pessimistic view of the future. From the article:
In West Virginia there’s an additional benefit. Last year the legislature cut the severance tax on the lowest-producing wells in half. Diversified, by far the biggest beneficiary of the cut, told investors it “engaged with state regulators in West Virginia to help craft” the bill, which also directs revenue toward plugging orphaned wells.
Diversified is not the only company who "helps" craft bills that allows them to profit off of pollution. There is a sickness in politics that cares not for our future and has no incentive to heal.
Democracy is inherently short-sighted because future peoples' interests are very hard (impossible?) to represent. That's not to say we shouldn't try -- this article has a decent overview on the...
Democracy is inherently short-sighted because future peoples' interests are very hard (impossible?) to represent. That's not to say we shouldn't try -- this article has a decent overview on the problem although I'm not sure if their proposed solution goes far enough [pdf].
Democracy is prone to what may be called presentism—a bias in the laws in favour of present over
future generations. I identify the characteristics of democracies that lead to presentism, and examine
the reasons that make it a serious problem. Then I consider why conventional theories are not
adequate to deal with it, and develop a more satisfactory alternative approach, which I call democratic
trusteeship. Present generations can represent future generations by acting as trustees of the democratic
process. The general principle is that present generations should act to protect the democratic process
itself over time. They should try to make sure that future citizens continue to have competent control
over their collective decision making.
Matt Levine explains the financial aspects of this trick in his column, using a hypothetical example: […]
Matt Levine explains the financial aspects of this trick in his column, using a hypothetical example:
You borrow $100 to buy an asset worth $100. You use it for a while, it makes widgets that you sell for a profit. It depreciates, it gets old, it produces fewer widgets. Now it’s worth $50. You still owe $100 on the loan. The asset plus the loan are worth negative $50. If you sell them together — the asset and the loan — a buyer should be willing to pay you negative $50 for them. That is, you’d have to pay the buyer to take on the asset plus the loan.
But what if you find a buyer with terrible, terrible credit? The buyer will say “I can buy this asset and it will generate $50 of profits for me, which I will spend. Then I will have to pay off this $100 loan, but — and here's the trick — I won’t do that.” Eventually the lender will sue the buyer for the money, the buyer will turn their pockets inside out and gesture comically to their lack of money, and the lender will get, you know, nothing.
How much will that buyer pay you for the asset plus the liability? I dunno, probably not $50, but more than negative $50. Maybe they’ll pay you $5 for it, which is $55 more than it’s worth to you. Maybe they’ll value the package at $25 (or $50?) on their books, reporting an immediate gain of $20. Everybody wins! Except, to be clear, the lender. The lender loses $100.
[…]
If you can offer a service like “we will take your liabilities off your hands and then defer them by 50 years,” that is a valuable service and you can make a nice profit from it. But it is not a value-creating service. It is a value-shifting service. You take the value from the creditors and split it up among the buyer and seller. Here the “creditors” are environmental regulators; ultimately the value is taken from the environment.
This was an extremely interesting read.
The consequences of this activity, the complicity of society allowing and reinforcing the conditions that make this activity possible, and the math that just doesn't add up.
It's high time for investment in regulatory capacity: the laws of the land aren't worth the paper they're written on if people aren't held to account.
These should be easy wins in Congress. If the two parties can't agree on enforcing their laws, or make law enforcement for companies and regulations of business, for rules-based and fair playing fields, then we might as well pack up.
I have a fairly pessimistic view of the future. From the article:
Diversified is not the only company who "helps" craft bills that allows them to profit off of pollution. There is a sickness in politics that cares not for our future and has no incentive to heal.
Democracy is inherently short-sighted because future peoples' interests are very hard (impossible?) to represent. That's not to say we shouldn't try -- this article has a decent overview on the problem although I'm not sure if their proposed solution goes far enough [pdf].
Matt Levine explains the financial aspects of this trick in his column, using a hypothetical example:
[…]