Thatcher: Not Strong Enough?
Aditya Chakrabortty is correct that Thatcherism did not solve many of Britain’s problems (“Thatcherism, R.I.P.,” Opening Remarks, April 15-April 21). At most, it only slowed down Britain’s ongoing decline as it drifts further toward socialism and an overreliance on finance and government-sector jobs. Although Thatcher had some good ideas, she did not realize that her unconditional support of free trade in the 1980s would eventually lead to a global economy consisting of state-owned enterprises from low-cost countries pursuing mercantilist trade policies. The result is Britain’s deindustrialization that the article mentions.
What EBX Got Going
“The Man Who Lost $25 Billion in One Year” (Markets & Finance, April 1-April 7) offers information on the EBX Group merely about project delays over the last year and production targets missed, neglecting to mention projects whose construction has been completed and whose operations are ongoing. Examples include:
• MPX Energia, EBX’s energy company, has five power plants in operation, totaling 1,251 megawatts of installed capacity, which will reach 2,838 Mw by the end of 2013.
• With investments of 3.5 billion reais ($1.8 billion) already made, construction of the Açu Superport is proceeding apace with operational startup scheduled for 2013.
• Major oil and gas companies have signed contracts to install facilities in the Açu Industrial Complex. These include General Electric and, more recently, Wärtsilä, Asco Power Technologies, and BP (in a joint venture with EBX).
In addition, when the article mentions the “generosity” of the Brazilian Development Bank (BNDES), the magazine fails to inform its readers that those funds, which the EBX Group is using legitimately and which were acquired and are being paid back under the same terms offered to the rest of the market, were approved after undergoing careful scrutiny. BNDES’s exposure to the EBX Group is extremely comfortable, as most disbursement operations for the EBX companies are secured through fund transfers and letters of credit from other banks. Finally, it should remain clear that the projects of the EBX Group were given their starts with capital provided directly by Eike Batista and funds raised from investors and through financing secured in the market.
Maria Fernanda de Freitas
Media relations manager
Rio de Janeiro
The Real Driver of Gas Prices
“Why Abundant Oil Hasn’t Cut Gasoline Prices” (Global Economics, April 1-April 7) falsely claims that the Jones Act has made it more costly to move fuel between U.S. ports, driving up prices at the pump.
The Energy Information Administration (EIA) has said its “analysis of the petroleum market points to the price of crude as the main contributor to the large changes in gasoline prices the U.S. has experienced in recent years.” In fact, crude, combined with federal, state, and local taxes, accounts for approximately 80 percent of the ultimate price of gas for consumers. As was also noted in the article, global demand for petroleum products drives the price of gasoline. Year-over-year global product demand is up.
Moreover, the most recent price spike was due to such factors as rises in crude and planned and unplanned refinery outages that affected output. As the EIA also noted in February, about two-thirds of the rise in gas prices since the start of 2013 resulted from higher margins at refineries from gasoline production.
The petroleum market is an extraordinarily complex global market, with consumer prices affected by many variables. To suggest that the Jones Act contributes to the higher costs of gasoline to U.S. consumers overly simplifies this complex system. The good news is that the price of gasoline decreased during the month of March for the first time in a decade. And that occurred with the Jones Act as the law of the land, further proof that the Jones Act has no impact on the price at the pump.
Board of directors
American Maritime Partnership
What Bitcoin Can Do
Regarding “The Bitcoin of the Realm” (Opening Remarks, April 1-April 7), I think people are missing the real value of Bitcoin.
On the surface, Bitcoin is a bit like rhinoceros horn. Its value derives from its reliable scarcity and an illogical human willingness to invest that fact with some importance. This is absurd. After all, rhinoceros toes are just as rare and just as useless as rhinoceros horns, but we don’t value them.
The real value of Bitcoin is that it is a reliable and secure bookkeeping system that reduces transaction costs to near zero. If a government were to render its currency in something like Bitcoin, if they were to back up the intrinsically worthless entity with the usual promises, they would suddenly find themselves the masters of a magnificently efficient banking and clearing operation. In one blow, such a system could eliminate the entire parasitic segment of our economy that deals with transactions and payments.
New Braintree, Mass.