A newspaper article about the Panama Canal’s expansion project has just come to our attention. We’ve decided not to identify the author. We don’t want to embarrass anyone.
The writer referred to the project as a $ 5.25 billion expansion that’s expected to double the canal’s capacity and lower the price of consumer goods on the East Coast of the U.S. by allowing wider vessels to deliver more cargo.
The deepening and widening of the canal along with a harbor-deepening project for the Port of Savannah, the article states, will have a tremendous economic impact because deeper waters will allow container vessels to pass through the canal to Savannah without restraints.
The article ends by stating that the Panama Canal Authority intends to borrow money to help finance the project and expects to repay the loan by increasing ship tolls an average of 3.5 percent a year.
In Vol. IV, Art. 32, we wrote about a group of grammar school kids that were making a lot more sense than the writer selling this snake oil. Back then (about two years ago), Bloomberg was reporting that Panama was pegging the expansion project at $ 10 billion, and these youngsters became suspicious of the whole deal. One little girl, in fact, remembered that two years prior to that Bloomberg’s report, the price of the expansion was being quoted at $ 15 billion. She wondered if the $ 10 billion was a misprint. Wait’ll she sees the latest “misprint”. Or better still, wait’ll she reads this latest article.
She’s the one, you’ll recall, who wanted to know why so much of our imports from Asia are being dumped into that one spot in California. “Most of us don’t live in California,” she reminded us, “we live somewhere else. When my mother does her weekly food shopping, she just goes down the street to the supermarket … she doesn’t drive all the way to Florida or Canada or someplace.”
Then she supplied the clincher. “If they’d just go back to smaller ships and deliver at more ports, their problems would go away”. Such logic.
And we’ll hear more of her logic when she reads the writer’s statement that the deepening and widening of the Panama Canal along with the harbor-deepening project in Savannah will lower the price of goods to consumers on the East Coast.
“If it costs billions of dollars to widen and deepen the Panama Canal,” she’ll say, “and if the loan is to be paid for by increasing the money the ships have to pay at the toll booth, won’t that raise prices for everybody?” she’ll ask. “And what about the people who live down by Savannah? Where will they get the money to make their harbor deeper?”
“Doesn’t anyone remember what I said last year about sending smaller ships to smaller ports? Cheesh!”