Friday, September 23, 2016

Fukushima: Let's Do Six More In India

With ex nihilo credit there is no rational limit to the crazy things you can do, like sell extremely unsafe nuclear power plants, which result in such events as the Fukushima meltdown.  While ex nihilo credit can advance an insanely dangerous project, there is the problem of liability.  Well, the reason Fukushima happened in the first place is Westinghouse had no liability.  Of course not.  Who would stand behind and insanely dangerous project?  Westinghouse will only do the work if they cannot be liable not if, but when, the thing blows up.
Both US President Barack Obama and Prime Minister Narendra Modi have been promoting the nuclear deal, which was stuck for years because of an Indian law that made nuclear equipment suppliers liable in case of an accident, and not just the plant operators as is the global norm. 
And when, in the case of Fukushima and Chernobyl and Three Mile island... and so on, when these go bad, no one is held responsible.  So people do it again.  And the taxpayers pay the cost, Westinghouse takes the profits.

Westinghouse also cannot sell these unless the USA taxpayers fork over the money to India to buy them.  That's right, there are no customers for these, unless USA gives the "customer" the finance to buy the product.  All of our huge corporations are unable to survive unless the taxpayer gives their "customers" the funding to buy USA products.

This is another example of ex nihilo credit calling forth goods and services that would never exist in a authentic market.  This is a case of malinvestment.  It is also an example of misallocation, since these mega-dangerous projects with "free money" crowd out the safe, sane affordable micro-nukes that Toshiba has developed.

The micro nukes are kept away by regulations.  The regulations makes sure only Westinghouse can be in the business.  The financing is sure to fail, because USA lends far more than can ever be paid back.  Then we own India.  No one in power in India or USA wants that to change.

Ex nihilo credit, at interest, destroys the authentic market.

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