#government

David Carr on the proposed Comcast/Time Warner Cable deal:

Foremost, Comcast already has a huge regulatory win in the bank. Its proposed acquisition of NBCUniversal in 2009 was met with abundant skepticism, with consumer advocates contending that control over both so much content and distribution gave it too much market power. The company maneuvered its way past those hurdles and won approval by making some concessions and commitments, and it is in an even stronger position today.

Consider that one of the Federal Communications Commission regulators who approved the NBCUniversal deal, Meredith Attwell Baker, now works for Comcast as a lobbyist. Since that deal, there has been a change in leadership at the commission, and it is now run by Tom Wheeler, who was previously a chief lobbyist for the cable industry. (Comcast is among the biggest spenders on lobbying, having written checks for $18 million in 2013 alone.)

The deck is absolutely stacked for this deal to happen. Which is, of course, total bullshit. Continues Carr:

Cable is a necessary evil that works best when we can exercise consumer choice. I live in northern New Jersey and used to be a Comcast customer — I dumped it after one of its technicians pointed to the cable running through the trees and said I might not have a great connection when the wind was blowing. I switched to Verizon FiOS’s fiber-optic service and have been very happy since. (Not cheap, but it works.) When, you might ask, will the fiber-optic future arrive at your house? How about never? Does never sound good?

No, it does not. But much of the cable market has already been divided up — as the executives behind the merger noted, Time Warner and Comcast do not overlap in any markets, and Verizon has previously agreed not to expand. Comcast, which will now have less competition, will have less motivation to invest in building out infrastructure like fiber-optic networks at the expense of its shareholders.

It’s not so much that Comcast is stifling some existing competition here — it’s that they’re ensuring there will never be any competition to speak of. And even if this monopolist is benevolent, they’ll have no true incentive to push innovation forward. And that hurts us all in so many more ways than just our checkbooks.

Scott Woolley chose an awful title, but makes an interesting point about the government’s 2009 loan to Tesla:

Personal loans made in 2008 by Elon Musk, Tesla’s co-founder and CEO, provide a telling contrast. Musk received a much higher interest rate (10 percent) from Tesla and, more importantly, the option to convert his $38 million of debt into shares of Tesla stock. That’s exactly what he ended up doing, and the resulting shares are now worth a whopping $1.4 billion—a 3,500 percent return on his investment. By contrast, the Department of Energy earned only $12 million in interest on its $465 million loan—a 2.6 percent return.

The government had huge leeway to demand similar terms as part of its loan, given the yawning gap between its interest rate and the cost of Tesla’s next-best source of capital. The government was ponying up more capital than all of Tesla’s previous investors combined. At a bare minimum, the Department of Energy could have demanded a share of the company equal to the 11 percent Musk received for his $38 million loan the year before. Such an 11 percent share would be worth $1.4 billion to taxpayers today.

Of coures, the government is not an investment firm — BUT they did take large ownership stakes in some of the banks during the bailouts.

Also, the government had the option on up to 3 million Tesla shares as a part of the loan — BUT those options evaporated when Tesla paid back the loan early (which was part of the incentive to do so).

gq
gq:

Four Problems with the Trillion Dollar Coin
The last few days have seen a rumbling around the Internet about the U.S. Treasury minting a $1 trillion dollar coin in order to alleviating the debt ceiling/fiscal cliff/that thing you’re sick of having explained to you. It turns out that there’s a technicality in U.S. law that allows the Treasury to mint a platinum coin worth any denomination they decide. With Timothy Geithner on his way out, his last act could theoretically be to create one of these coins, put it in the country’s bank account, and then voila, we’re $1 trillion richer. The big fear is that it would cause hyperinflation and destroy the dollar. Well turns out that this is probably not be the case. Of course, that’s not to say that there couldn’t be other problems with creating this über coin:
Biden will inevitably use it to buy a Charleston Chew in a vending machine. “That son of a bitch Boehner wouldn’t break me off a piece, so I had to, y’know?”
Within hours, the Franklin Mint will release replicas commemorating the striking of the coin. Just four easy payments of 24.95!!
One trillion $1 coins is a way better idea; you could swim in it Scrooge McDuck-style. Meanwhile, Monty Burns prefers bills.
Your creepy uncle could easily steal it by “vanishing” it behind some kid’s ear.

Um, a trillion dollar coin? This is (possibly) a real thing, not just something in Scrooge McDuck’s vault?

gq:

Four Problems with the Trillion Dollar Coin

The last few days have seen a rumbling around the Internet about the U.S. Treasury minting a $1 trillion dollar coin in order to alleviating the debt ceiling/fiscal cliff/that thing you’re sick of having explained to you. It turns out that there’s a technicality in U.S. law that allows the Treasury to mint a platinum coin worth any denomination they decide. With Timothy Geithner on his way out, his last act could theoretically be to create one of these coins, put it in the country’s bank account, and then voila, we’re $1 trillion richer. The big fear is that it would cause hyperinflation and destroy the dollar. Well turns out that this is probably not be the case. Of course, that’s not to say that there couldn’t be other problems with creating this über coin:

  1. Biden will inevitably use it to buy a Charleston Chew in a vending machine. “That son of a bitch Boehner wouldn’t break me off a piece, so I had to, y’know?”
  2. Within hours, the Franklin Mint will release replicas commemorating the striking of the coin. Just four easy payments of 24.95!!
  3. One trillion $1 coins is a way better idea; you could swim in it Scrooge McDuck-style. Meanwhile, Monty Burns prefers bills.
  4. Your creepy uncle could easily steal it by “vanishing” it behind some kid’s ear.

Um, a trillion dollar coin? This is (possibly) a real thing, not just something in Scrooge McDuck’s vault?