Fire Sale
January 14, 2019

On Sunday, California gas and electricity giant PG&E announced that chief executive Geisha Williams has stepped down, replaced on an interim basis by John Simon, PG&E's executive vice president and general counsel and a 12-year veteran of the company. PG&E faces as much as $30 billion in liabilities from exposure to the wildfires that devastated Northern California's wine country in 2017 and destroyed the town of Paradise in November, among others. Since November's Camp Fire, the deadliest in California history with 86 dead, PG&E has lost two-thirds of its market value and seen its debt downgraded to junk status.

Williams, 57, had been CEO in March 2017. In that time, PG&E's equipment has been blamed for several wildfires — at least 17 major blasts in 2017, The Wall Street Journal reports. It is so far unclear whether PG&E equipment caused the Camp Fire, but the company has said some of its equipment malfunctioned in the area not long before the fire started. The utility is pursuing financial arrangements to pave the way for a potential multi-billion-dollar Chapter 11 bankruptcy filing, and California is weighing stepping in to take over the company, break it up, or bail it out. Peter Weber

February 13, 2018

President Trump's 2019 budget proposal and infrastructure plan, both unveiled Monday, have something in common: Sell! Sell! Sell!

In the infrastructure plan, which envisions leveraging $200 billion in federal funds into $1.5 trillion in investment, "the Trump administration is pushing federal officials to sell off, privatize, or otherwise dispose of a broad array of government assets," The Washington Post reports, including Dulles and Reagan National airports, freeways, aqueducts, and electrical facilities in the South, West, and Pacific Northwest. The budget also sets aside $150 million to explore privatizing the International Space Station.

"The federal government owns and operates certain infrastructure that would be more appropriately owned by state, local, or private entities," the Trump infrastructure plan says. Federal agencies would gain new "authority to divest of federal assets" and keep the proceeds of such sales, incentivizing the privatization of public property.

Transportation Secretary Elaine Chao called this "a much more collaborative and creative way" of funding projects when "unfortunately, there's not enough money to be able to pay for all the infrastructure needs of our country." (Chao's husband, Senate Majority Leader Mitch McConnell, just pushed through a $1.5 trillion tax cut.) "We should also not discriminate" against private firms wanting to partner with public entities, Chao said. Norman Ornstein at the American Enterprise Institute had a different view of the proposal:

The budget's proposal to "encourage commercial development" of the ISS, with the goal of at least partially privatizing the orbiting research and exploration facility after 2024, was not fleshed out. And it's prospects are murky. Private aerospace firms seemed cool on the idea, and Congress did not seem enthusiastic. Last week, Sen. Ted Cruz (R-Texas) called the rumored proposal fiscally irresponsible and blamed it on "numskulls" at the Office of Management and Budget. Peter Weber

September 9, 2014

Amazon is slashing the price for its new Fire phone from $200 to 99 cents for the 32GB version with a two-year contract, the online retail powerhouse announced Monday. The 64GB version of Amazon's first smartphone will cost $100 with a two-year contract, down from $300. The drastic move, according to analysts, suggested that sales of the Fire were weak in the face of stiff competition from Samsung and Apple, which is expected to unveil a new iPhone later today. Read more at CNET. Harold Maass

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