Texas electric firm files for bankruptcy citing $1.8B in claims • Hacker News Board

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#161

Post by imtringued » Mon, Mar 01, 2021, 1:48 PM UTC

yourapostasy wrote: post #124

snidane wrote: post #104

Earlier quoted context omitted.

That's actually land monopoly problem. Ie. whoever came first to claim the land has exclusive use rights on it forever, or as long as his descendants go. It's yet another monopoly problem even though it doesn't look like it at first glance. Each house basically sits on a piece of mlonopoly for the parcel below it, preventing others from use. It's not much of a big deal in general, but in congested big cities, it is a…

> You pay yearly percentage of the market value. Establishing "market value" is the rub. Texas for example, does not make real estate sales prices public. This has a lot of perverse effects, one of which is deep-pocketed commercial interests have pummeled public assessors until commercial property is tacitly way undervalued for tax purposes, yet is openly sold for much more than the purported tax basis. I've heard of…

Isn't it possible to just make assessments for the entire block? Count the population density, commercial density, foot and car traffic and base the land value tax on those indicators.

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#162

Post by disgruntledphd2 » Mon, Mar 01, 2021, 1:50 PM UTC

rayiner wrote: post #160

snidane wrote: post #94

Earlier quoted context omitted.

It's actually well understood that privatisation for platform industries is bad, privatisation for businesses running on top of platforms is good. Networks and infrastructure = little to no competition. Eg. networks naturally settle in a optimal geographical location and utilize economy of scale then. Can't compete with that. So don't privatise platforms. Rather - make them monopolistic and make them share the revenu…

> It's actually well understood that privatisation for platform industries is bad, privatisation for businesses running on top of platforms is good That’s not “well understood” at all. Folks don’t remember how dysfunctional and sclerotic nationalized industries were in the 1950s and 1960s. There is a reason nearly every developed country got rid of them.

Yeah, mostly driven by the ideas of Milton Friedman.

Fortunately, we can see that 40 years later there were no unpleasant side effects from introducing markets into almost every business and service /s.

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#163

Post by maxerickson » Mon, Mar 01, 2021, 1:50 PM UTC

CydeWeys wrote: post #156

maxerickson wrote: post #119

Earlier quoted context omitted.

The regulator set prices at $9000 with the idea that the high price would reduce the shortage.

And it did. Plenty of Texans were reducing their power usage to the absolute bare minimum once they got word of how expensive power had just become.

Why would retail customers (with fixed rates) worry about it?

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#164

Post by [deleted] » Mon, Mar 01, 2021, 1:51 PM UTC

eqvinox wrote: post #137

rocqua wrote: post #120

Earlier quoted context omitted.

Its an interesting example, subways seem to have some minor room for competition, so the argument against privatization based on "there cannot be competition" does not quite apply. Even here though, there is a coordination problem to ensure various companies remain mutually compatible.

Competition on public transport is limited by the fact that you often need a cohesive network to get from A to B via C & D. If multiple companies cooperate on crossover ticketing and align their schedules, yes, it can work. Even more likely to work is a model where a central authority opens tenders for specific services, and transport companies can compete on that. Then again, I don't think it's viable to build subwa…

[deleted]

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#165

Post by confidantlake » Mon, Mar 01, 2021, 1:52 PM UTC

volta83 wrote: post #73

jonplackett wrote: post #41

This is the side of privatisation that gets ignored. When private companies screw up, who gets left with the bill? Private companies have no incentive to be ready for really big problems because they know they’ll get bailed out, or just not have to pay. Privatise the profit, socialise the losses.

> . When private companies screw up, who gets left with the bill? The share holders (which often includes the leadership). Their shares drop relatively quickly to close zero. I think, however, that this is not enough. Share holders of a company should be liable as individuals for the damages the company causes in case the company cannot pay. This would strongly encourage share holders to pressure the CEO (which is al…

I have non voting shares in 500+ companies due to index funds. I really don't think making me personally financially liable makes sense.

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#166

Post by SilasX » Mon, Mar 01, 2021, 1:54 PM UTC

adrianN wrote: post #132

bko wrote: post #112

Earlier quoted context omitted.

I don't know if NYC infrastructure is a good example. The second avenue subway was the most expensive subway in the world on a per mile basis. Considerably more expensive than Paris or Tokyo > The estimated cost of the Long Island Rail Road project, known as “East Side Access,” has ballooned to $12 billion, or nearly $3.5 billion for each new mile of track — seven times the average elsewhere in the world Similarly, t…

I don't understand why so many people assume that public transport needs to cover cost with fares. It provides immense public utility, even to the people who don't use it. It makes perfect sense to subsidize it. And it's not like taxes on cars pay for all their externalities.

Right, the better estimate of how economical transit lines are would be fares + gain in property value from the presence of the lines. (Or, to get the units right, fares/year + gain in locational rental value/year.)

Or to look at it another way: assume some genie offered to dismantle the NYC train/subway system for free. Assume you're the government and only care about maximizing revenue. Would that be a good deal? Of course not, even if the system wasn't self-sustaining from fares.

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#167

Post by devdas » Mon, Mar 01, 2021, 1:55 PM UTC

bko wrote: post #158

adrianN wrote: post #132

Earlier quoted context omitted.

I don't understand why so many people assume that public transport needs to cover cost with fares. It provides immense public utility, even to the people who don't use it. It makes perfect sense to subsidize it. And it's not like taxes on cars pay for all their externalities.

I don't understand why so many people assume that others should pay for the services they consume. Why should a relatively poor upstate new york taxpayer be paying 50% of the fare of some young finance bro going to work? Also removing prices removes information. For instance the ferry costs something like $15 per rider to operate compared to around $5 for subway. With both trips at the same price to the consumer, you…

After all, why should the city dweller pay for the roads being used by the upstate new yorker?

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#168

Post by imtringued » Mon, Mar 01, 2021, 1:56 PM UTC

hn_throwaway_99 wrote: post #103

snidane wrote: post #94

Earlier quoted context omitted.

It's actually well understood that privatisation for platform industries is bad, privatisation for businesses running on top of platforms is good. Networks and infrastructure = little to no competition. Eg. networks naturally settle in a optimal geographical location and utilize economy of scale then. Can't compete with that. So don't privatise platforms. Rather - make them monopolistic and make them share the revenu…

I wish our political systems would admit to this. So often I hear one side praying at the alter of free markets and deregulation, while the other condemns any profit making business as greedy. It just seems to me that free markets work absolutely fantastic in some areas and absolutely horrid in others (health care being probably the most notorious example).

Yes, this is important. Free markets are just a tool. If there is a more effective tool then you should use that instead. I think it is particularly telling that one side is constantly engaging in corporate welfare when they talk about deregulation. The other side is exhausted from faceless corporations screwing them over. What's needed is more people who are on both sides and understand the whole picture. The idea that only one side is right is simply wrong. You need a wide variety of strategies.

There is this mindset that capitalism is always wrong when the mindset should be capitalism is not always right, which is a completely different perspective. However, I am really disappointed that people don't think about how to make the system work for themselves. Corporate abuse doesn't necessarily have to be the rule. The political environment could be shifted to favor workers instead and to a certain degree this would benefit everyone, not just one side.

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#169

Post by fitchjo » Mon, Mar 01, 2021, 1:56 PM UTC

phire wrote: post #88

jonplackett wrote: post #41

This is the side of privatisation that gets ignored. When private companies screw up, who gets left with the bill? Private companies have no incentive to be ready for really big problems because they know they’ll get bailed out, or just not have to pay. Privatise the profit, socialise the losses.

> . When private companies screw up, who gets left with the bill? In theory, the company is meant to declare bankruptcy (or seek more investment from shareholders) as soon as their books say they are insolvent. A company is Insolvent when it's liabilities are higher than it's assets, even by a single dollar. The theory is that because the company is required to declare bankruptcy as soon as possible, it should only b…

As a couple other replies have mentioned, determining insolvency and when to file bankruptcy is a bit more complicated than this simple comparison. A quick counterpoint - you start a company on Day 1 and put $1 into the company; on Day 2, you borrow $10, but with the costs associated with borrowing, you only net $8 cash; at that point, you have outstanding debt (liabilities) of $10, but cash (assets) of $9; your new company is not insolvent, however - you can take that $9 and generate additional cash flows that allow you to repay the $10 debt in the future. While certainly not common, there are plenty of companies operating that have negative equity - it certainly is an indicator of a company having some challenges, but not an absolute that the company should be dissolved.

Re: Texas electric firm files for bankruptcy citing $1.8B in claims

#170

Post by pm215 » Mon, Mar 01, 2021, 1:57 PM UTC

m4rtink wrote: post #144

eqvinox wrote: post #98

Earlier quoted context omitted.

Road networks are a great example. Just assume the hypothetical position of a competitor. Where are you gonna build a competing road in, say, NYC? Each block only has 4 sides, and each of them already has a street. You could maybe compete on interstate highways or other long-area bits. Maybe. That's stretching it. Build a competing water supply network to each house? Another set of sewers? Electricity distribution? H…

Seems to work fine in Japan for railways - there are three different rail connections from Tokyo to the Narita International Airport for example, each run by a different company (at the same time, we have 0 rail/subway connections to the Prague Airport:P). Same thing in many other places - in Kyoto there is big and nicely build station by JR and, Transport Tycon style 200 meters from it another big station by IIRC Ki…

I feel like all these urban-Japan examples are more "only in the most densely populated places" rather than "even". If demand is high enough then you can absolutely support multiple competing routes: they all get enough passengers to survive, and the denser coverage is beneficial. It's when you get a bit further out and into smaller or less dense areas that it starts to get tricky -- different private railways end up complementary to each other as they serve different suburbs but are the only railway for most of the places they serve.