Wednesday, June 3, 2009


With your kind permission, I would like to start this month’s column with a cautionary tale that has become all too familiar to many of us living in the United States of America in the year of our lord, 2009. Just for a moment I want you to imagine that you and your wife are retired and living in Ocean City. You have worked hard, and take pride in the fact that your children, all of whom have left the nest, appear to be able to stand on their own two feet. Life is good and the future is bright.

That is until January of 2009 when your broker calls to inform you, that due to some “unwise investments” on your part your 100,000-dollar reserve fund has now shrunk to 20,000 dollars. The good news is it looks like you can survive. You paid cash for your condominium and have social security, but all of a sudden, the future is not so bright. The financial lifeboats on your monetary ship are not yet being lowered, but as captain, you advise the crew to have them ready.

Two weeks later your youngest son calls. He tells you that he has lost his accounting job with Constellation Energy and that he is having trouble finding work. He further notes that the only thing keeping the wolf away from the door is his wife’s waitressing job at Appleby’s and there are rumors that she could be laid off as well.

Your son is dispirited and scared. He notes that they may not have enough money for the mortgage, that the bills for your twin grandson’s braces are due, and that the brakes on their Honda Odyssey are shot. Finally, they also owe some money on a home equity loan. After a long pause, your son swallows his pride and asks you for 10,000 dollars to get them through this rough patch. He is confident that he can find work, but he needs the money to “tide them over.” Finally, he promises to pay you back every penny as soon as he can. You tell him that you have to think it over, but the next day, you send him the money. In parting with half of what you have left, you are putting your own future and security at risk, but you make the sacrifice, because, you believe that families need to pull together in tough times.

Three weeks later, you call your son to see how things are going and get his voicemail on his home phone. You are puzzled because it is the middle of the week. You then try his cell number and he answers. In the background you hear a great deal of crowd noise and happy children screaming. You also hear the voices of your grandsons, one of whom appears to be urging your son to get off the phone so they can “go on another next ride.”

Slightly puzzled, you ask your son where he is. He answers, “Disney World!” You ask him where he got the money for the trip and he tells you that everyone has been under a lot of stress and needed a break, so he decided to take 3000 dollars of the money you sent to take the family on a nice vacation.

After verbally issuing a series of what are politely referred to as “expletives” you angrily, advise your misguided offspring that the money you provided was at great sacrifice and was for ESSENTIAL things, not vacations.

The aforementioned tale is one reason why so many Americans were outraged by the obscene bonuses given to the AIG Insurance fat cats. US taxpayer dollars were used to bail out the company. With this in mind, any outlays by the leaders of AIG should have been used to keep the corporation afloat, not to make rich people richer. In short, like the fictional couple, taxpayers provided funds to help AIG survive, not to reward their executives.

However, the AIG bonuses were a national affront. We here in Maryland however, were directly affected by the same kind of twisted thinking on the part of that paragon of plutocracy, Constellation Energy. After willingly participating in the financial rape of its ratepayers this winter, BGE’s parent company made the decision to provide “retention bonuses’ of $100,000 for its senior managers. As usual, the company mouthpiece, Rob Gould, tried to make the morally bankrupt argument that any comparison to the AIG raises was "flat out wrong and unwarranted.” He also, in a further fit of delusion, noted, "Not one dime of taxpayer money or BGE ratepayer dollars was involved.” Thankfully, in the end, Constellation came to its senses and cancelled the payouts.

Which brings me to my final point, capitalism, at times, serves us well because it gives us choices. But there are some commodities, like heat in the winter, that all of us need to survive. With this in mind, is there any doubt that we need to re-regulate our electric utilities? This effort will not be cheap or easy and we will initially have to pay more to repurchase our plants. In addition, we should realize there is no system or formula that would allow us to escape paying market rates for electricity.

But, while it is a fact that energy costs more we should insist that the entities that provide us our power charge only what they need to keep the enterprises going, no more, no less. In short, shareholders and executives of Constellation Energy should not be getting rich off your electric bill. People like Mayo Shattuck, the head of Constellation, may feign concern about the increase in electric bills. What they really care about is profits. We need them to focus on the ESSENTIALS and to stop going off to financial Disney Worlds on our nickel. In short, it is more important for the people of central Maryland to stay warm, than for Constellation executives to get rich.

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