"If the problem is deregulation, the cure is re-regulation. Those who profit from deregulation have fostered the presumption that the process is irreversible. But re-regulate we must and can."

Published on Sunday, Janaury 28, 2001 in the Washington Post

Some Power Trip: Put the Deregulation Genie Back in the Bottle by Gregory Palast CAMBRIDGE, England -- As the lights go out over California, state politicians are in a Henny Penny panic that the two big local power companies, Southern California Edison (SCE) and Pacific Gas & Electric Co. (PG&E), will collapse into bankruptcy. Not me: I can't think of anything that would more joyously combine historical justice and good public policy.

Why justice? Because SCE and PG&E executives, eager to reap the profits of deregulation, were in the forefront of the army of industry lobbyists fighting to establish the system that got California into this mess.

And why good public policy? Because letting the utilities go bankrupt could be the first step toward returning California to the system of government price regulation that has given America some of the cheapest and most reliable electricity in the world. Regulation may be politically unfashionable, but it works.

Over the past three decades, as a consultant to 19 state governments, I've seen electricity price regulation from the inside. The U.S. process is unique in the world. In open hearings, consumer groups, competitors or anyone off the street can pore over a utility company's account books, cross-examine the company's executives and question the regulators' staff. Based on that evidence, public utility commissions set a price per kilowatt hour based on verified costs plus a small, tightly controlled profit for shareholders. It's a litigious, messy business, prone to political manipulation, just as its critics say. But that's true of any democratic process.

The so-called deregulation movement seeks to replace this open, participatory, American system -- one that's been astonishingly effective for nearly a century -- with something conceived and designed in Margaret Thatcher's England and launched there in 1990. (Sorry, California, this is one fad you didn't think of first.) A number of countries, including Brazil and Chile, mimicked the British system. And California swallowed it whole.

This is how the British system works. First, electricity businesses are split into "generators" and "distributors" -- the first owning the power plants, the second the wires transmitting the power. (During this part of the deregulation process, SCE and PG&E gleefully sold off many of their generating plants -- built with ratepayers' money -- and pocketed the proceeds.) Then something called a "power pool" is established. Every day, generators bid the price at which they will supply electricity to the pool at a certain hour of the next day, say 2 cents per kilowatt hour at 4 p.m.

In Britain, it didn't take long for the handful of power sellers and traders to learn how to "game" the pool, essentially turning the daily auction into a fixed casino. Last year, Britain's Office of Electricity and Gas Markets concluded that collusion and manipulation of the pool had become standard business practice.

So it's not surprising that in Britain -- as well as in every one of its imitators -- the public has suffered higher prices, decayed service and blackouts. In the 1990s, as America's electricity prices fell with the price of oil, Britain's stayed stratospheric, on average 70 percent higher than in the States. (Don't confuse this with the taxes that keep gasoline prices high in Britain; profits account for the higher electricity prices. U.K. utilities commonly earn five times the return on capital permitted to regulated U.S. utilities.)

And this is the system that the free-market fanatics foisted on California. Notably, three of the four biggest power generators controlling the California market -- AES, Southern and Dynergy -- and the biggest U.S. power trader, Enron, are also big players in Britain.

Manipulated or not, on a hot summer's day, when a pool needs all the juice it can find, the handful of sellers can name their price. And in California, they do. For example, this past June 29, sellers demanded 52 cents per kilowatt hour; on June 29, 1999, they had accepted 5 cents, a price better reflecting their true costs.

I first came to Britain in 1996, to help the incoming Labor government try to fix the nation's new -- but already broken -- electricity market. It didn't work. Year after year, the fixes failed, as they will fail in California and other states that think they can design a deregulated system. There is no fix: Free markets in electricity go berserk because they aren't really markets, aren't free and can't be. Electricity isn't like a dozen bagels; it can't be frozen, stored or trucked where needed. And while you can skip your daily bagel, homes and industry will not do without their daily electricity.

As a result, deregulation is never really deregulation but an unhappy mish-mash of rules belatedly chasing runaway prices generated by each week's new trading game. To salvage their imploding market, the California power pool's economists busily craft one wacky fix after another -- "Intra-zonal Congestion Management," "Price Volatility Limit Mechanisms" and more, which tumble out of their bureaucracies like circus clowns from a Volkswagen. A delicious irony is that "deregulation" has produced an explosion of shifting regulations and new bureaucracies dwarfing California's old regulatory system.

Market fundamentalists say the solution to half-baked deregulation is full deregulation, with no rules at all. That's frightening. As former World Bank economist Joe Stiglitz said to me the other day, these theorists are like medieval bloodletters. If a dose of their free-market medicine doesn't cure the patient, they call for applying more leeches.

No one in America is safe from the deregulators. One would think that, after the California debacle, states would run from deregulation. But the same self-serving lobby that blinded California to Britain's fiasco has blinkered Texas, New York and others to California's failure.

Residents of the District of Columbia, where a deregulation statute took effect this month, can sleep easy with night lights burning -- but only for the next four years. That's when the price caps bargained for by the District's people's counsel, Elizabeth Noel, will be lifted, and consumers will be at the mercy of the PJM Interconnection pool (which serves parts of Pennsylvania, New Jersey and Maryland). Even PJM, considered the nation's most stable market, is subject to the same manipulations as San Diego. On July 28, 1999, completely legal "stacking" bids by the big power companies bounced the price paid by the PJM pool to $935 per megawatt hour -- about 30 times the sellers' costs.

You didn't feel it in your bill then. But when the cap goes, look out. Even Noel, proud of the protections she wrote into the statute, echoes other consumer advocates across the nation: "If I had a Harry Potter wand, I'd put the [deregulation] genie back in the bottle," she told me last week.

If the problem is deregulation, the cure is re-regulation. Those who profit from deregulation have fostered the presumption that the process is irreversible. But re-regulate we must and can.

In California, the first step would be to guide SCE and PG&E into Chapter 11 bankruptcy. The state could then purchase their power lines and other assets. Shed no tears for these two utilities. Today, they are sinking under a $12 billion debt to power sellers. But in the first four years after deregulation, until the market turned on them (as markets do), the two operators stuffed their accounts with $20 billion in windfall revenues.

I've seen this return to government control work. On New York's Long Island, a local electric company arrogantly spent billions on a faulty nuclear plant, driving itself and its community toward bankruptcy. In 1980, I drafted a plan for the state to buy the company. The resulting takeover by an independent government-owned power authority, completed in 1991, slashed prices by a good 20 percent and improved service.

Once the distribution grid is in public hands, California must then return the power plants within its borders to the old profit-limited, democratically organized method of regulating price. But this rescue plan will fail unless the federal government gives up on the deregulation fantasy as well. To nudge other states into following California's scheme, the Federal Energy Regulatory Commission lifted the price controls on most interstate sales into power pools. Those controls need to be permanently restored.

Pulling out of the deregulation morass is not a technical problem but a political one. An economic ideology -- not to mention several trillion dollars of infrastructure -- are on the line. California's electricity grid may be the free marketeers' Vietnam. It is the place where the conviction that markets are superior to public control -- always, everywhere and forever -- loses its way in the dark. The only solution to the deregulation debacle is swift, honorable and complete withdrawal.

(California-born Gregory Palast is a consultant on utility regulation and a columnist with the Observer of London. His book "Regulation and Democracy" will be published this year by the U.N. International Labor Organization.)

© 2001 The Washington Post Company

###

-- Coup2k (thanks@pubs!.com), January 30, 2001

Answers

More regulation! What a fab idea! Cenralize all decision making in the Imperial city. We need more rules, more regs, more forms in triplicate, more CYA bureaucrats fucking with our lives. Brilliant.

-- Lars (larsguy@yahoo.com), January 30, 2001.

Lars,

Are you an anarchist, or just an idiot?

And what part of "ROLLING BLACKOUT" are you having trouble with?

-- (@ .), January 30, 2001.

Yeah!

All those Evil Capitalists Exploiters Of The Planet are going to rape your wives and eat your children!

Oh, what will you do!

What WILL you do!

Only the benevolent, compassionate, all-knowing GOVERNMENT can save us now!

BWAHAHAHAHAHAHAHAHA!

-- guess who (kiss.my@ass.com), January 30, 2001.

We need more rules, more regs, more forms in triplicate, more CYA bureaucrats fucking with our lives. Brilliant.

Lars, that's exactly what we get with deregulation. Perhaps you didn't read this part:

"As a result, deregulation is never really deregulation but an unhappy mish-mash of rules belatedly chasing runaway prices generated by each week's new trading game. To salvage their imploding market, the California power pool's economists busily craft one wacky fix after another -- "Intra-zonal Congestion Management," "Price Volatility Limit Mechanisms" and more, which tumble out of their bureaucracies like circus clowns from a Volkswagen. A delicious irony is that "deregulation" has produced an explosion of shifting regulations and new bureaucracies dwarfing California's old regulatory system."

-- Coup2k (thanks@pubs!.com), January 30, 2001.

In this case, "coup" is quite right. What Californa chose to *call* deregulation was in fact a mountain of red tape that brings tears of joy to a bureaucrat's eyes. So much so that returning to normal regulation serves to reduce the number of regulations considerably.

But is this the correct answer to the problems, or would it be preferable to move toward actual deregulation as the word originally meant -- that is, not regulated? And the answer depends on whether power really is a natural monopoly. Would it make sense to allow customers to select between two or more providers, forcing those providers to compete with one another or lose business?

I don't know the best answer to this, but I can be fairly sure we aren't going to get it from someone who is from California, makes his living as a regulators' consultant, and writes for the Observer of London. Talk about vested interests! Real deregulation would put this guy out of work in a heartbeat. He doesn't want that? Imagine that!

I recall other "natural monopolies" like the phone company and the cable company. In both cases, I now have several competing choices. But just as clearly, having competing water or sewer utilities, or competing toll road providers, would be a disaster. There just isn't room for duplication of these things. And we have an actual history of competing fire departments -- they saw smoke, checked if it's one of their customers, and if not they went home! Not good.

So is power different? Do we want double or triple the generating plants, power lines, and other physical plant? Would competing power providers be more like competing cable TV companies or competing water/sewerproviders?

One thing I do know -- where there isn't competition, there must be regulation. If people within a large region can select ONLY between PG&E or no juice at all, no kind of "deregulation" will work, and trying some weird hybrid will be unstable just as we've seen. The whole purpose of deregulation is to allow the operation of market forces. Not surprisingly, this hasn't worked where there is no market.

-- Flint (flintc@mindspring.com), January 30, 2001.

California shoots itself in the foot and others are asked to donate blood. I wonder what the final cost of this fiasco will be?

A generation ago my farmer/father told me "people are like cows" As painful as it is, I keep finding proof.

-- Will (righthere@home.now), January 30, 2001.

Please forgive Lars, he hasn't learned to read yet. Like Uncle Boob, he shoots off at the mouth at anything that isn't approved by Dubya, even if it makes sense.

-- (right-wingers@are.morons), January 31, 2001.

Lars,

Are you an anarchist, or just an idiot?

I am proud to carry the black flag of anarchy into the howling gale of nihilism. I am proud to be an idiot-savant. I am proud to be a pragmatic practitioner of prepuce-prejudice.

-- Lars (larsguy@yahoo.com), January 31, 2001.

To de-regulate is to remove rules and regulations. California DID NOT de-regulate, it increased the rules, regulations and other red tape. California introduced a wholesale electricity market for the generators, but did not allow the retailers to participate. Nor did it introduce any real competition to the retail market.

OK now that I've said what I see is wrong with the Californian system I'll try and describe the system we have introduced in New Zealand, a system that works.

Back in 1987 the New Zealand Government started the process towards de-regulation. Prior to that time all of NZ's electricity system was publicly owned. The Government split the New Zealand Electricity Department into 3 major groups, Electrocorp Production which owned all of the generators, Transpower which owned the national grid and electrocorp marketing which sold the power. There were a couple of other spin off groups, but they have no bearing on de-regulation.

The first step towards de-regulation was to seperate the retail side into as many competeing companies as possible, and to reduce the amount of red tape in the electricity industry. The main change was to reduce the number of laws and regulations that contained the word "NOT" and replace them with alternative rules that used the word "MAY". Thus our legislations ceased being restrictive and started to become permissive.

The second step was to introduce legislation that permitted anyone to generate electricity (subject to meeting industry standards) and to sell that electricity as and when they wished.

A separate piece of legislation called "The Resource Management Act" brought all of the conservation rules, the enviromental requirements and the water and land use requirements into a single piece of legislation which once again permitted activities such as building power stations as long as environmental requirements were met.

Then came the electricity market. This allowed the industry to set its own rules without recourse to the government, or to any restrictive legislation.

I recall one of early establishment meetings where there appeared to be an impass between what the economists required and what the engineers could deliver. For quite some time there was no progress and it appeared that the process might fail, when suddenly the chief economist sat up. It was as though a light bulb had suddenly been turned on, and he said "So what you mean is that the laws of physics do not follow the laws of economics, and therefore we must build a market that follows Ohms law rather than ......" (I can't remember who he quoted, but it was some famous economist). From that point on our market was a success.

We have ended up with six major electricity retailers and a number of minor ones, and 4 major generation companies with 4 or 5 minor ones. All for a population of 4 million people. There is true competition in both the generation and the retailing of energy.

OK, enough gloating, what to do about California.

There is not enough time to build any new stations before this summer, the North west hydro stations are short of water, the entire California grid is under stress, so that only leaves one course of action.

Californians, You are going to have to conserve energy. You are going to have to change your laws that make it so difficult for new stations to be built, and you are going to have to pay the true cost of obtaining that energy. It is not reasonable to compare the crisis in California with a hurricane in Florida or Tornadoes in Texas, they are natural events, your problem is of your own making. It is not reasonable to expect the rest of the world to bail you out just because of the size of your economy, why should the whole world suffer because of your inept politicians?

A 5% - 10% reduction in power usage is all that is required to see your way through the next summer, but by then you must convince your politicians to allow more stations to be built without requiring 4 years of legal argument first.

-- Malcolm Taylor (taylorm@es.co.nz), January 31, 2001.

Liberals are idiots...

California Reaps What It Sowed

Energy Fascists Blame Their Failures on the "Free Market"

by Jim Peron

In Ayn Rand’s Atlas Shrugged the main characters, at the end of the book, are flying over New York City. Rand describes the scene:

“[New York City} rose in the distance before them, it was still extending its lights to the sky, still defying the primordial darkness, almost as if, in an ultimate effort, in a final appeal for help, it was now stretching its arms to the plane that was crossing its sky. Involuntarily, they sat up, as if at respectful attention at the deathbed of what had been greatness.

“Looking down they could see the last convulsions: the lights of the cars were darting through the streets, like animals trapped in a maze, frantically seeking an exit, the bridges were jammed with cars, the approaches to the bridges were veins of massed headlights, glittering bottlenecks stopping all motion, and the desperate screaming of sirens reached faintly to the height of the plane. The news of the continent’s severed artery had now engulfed the city, men were deserting their posts, trying, in panic, to abandon New York, seeking escape where all roads were cut off and escape was no longer possible.

"The plane was above the peaks of the skyscrapers when suddenly, with the abruptness of a shudder, as if the ground had parted to engulf it, the city disappeared from the face of the earth. It took them a moment to realize that the panic had reached the power stations — and that the lights of New York had gone out.”

Rand’s plot, as complex as it is, shows the effects that burdensome regulations can have on a society. The blackout of New York City in the novel was just the culmination of a series of absurd polices, antiquated ideologies, and bumbling bureaucracies. Regulation after regulation and law after law placed the economy in a straitjacket and each day the bindings got tighter and tighter. Of course the justification for such regulations was the common good.

Almost half a century later the lights of New York City are still burning. But we can’t necessarily say the same for California. Governor Gray Davis has issued a state of emergency because two of the largest utilities there are on the brink of bankruptcy. Pacific Gas and Electric defaulted on $76 million in debts and Southern California Edison suspended $596 million in payments to bondholders and suppliers. Rolling power outages have effected hundreds of thousands of people. The lights of San Francisco are clearly in danger of going dark.

The media and the Left are having a field day. In Nigeria the US government has been urging deregulation of electricity but locals, fed this story by the media, believe that it was deregulation that caused the California crisis. On the Lagos radio station Rhythm FM a presenter laughed: “The Americans are getting just like us. Maybe we can offer them some lessons on what to do ... There is no one on earth so prepared for power outages as us Nigerians. If there is one thing we can teach, it is this.” He concluded: “Let’s hope we don’t follow the Californian model.”

A press report on the Nigerian situation said that California faced a crisis because of “bungled deregulation”. Robert Scheer, a columnist for the Los Angeles Times blamed the crises on the free market. Economic columnist Paul Krugman, of the New York Times, picked up the mantra and chanted: “California’s blind faith in markets has led to an electricity shortage so severe that the governor has turned off the lights of the official Christmas Tree.” CNN, which still pretends to be objective, announced that “California’s experiment with energy deregulation is not just a mess, its a certifiable failure.”

But the Left isn’t finished. Not only was “deregulation” to blame for the crisis but so was consumer capitalism. The London Telegraph reported: “California is a victim of its own success. Decades of conspicuous consumptio are threatening reductions in life’s essentials. So in the end the culprit is old fashioned greed. Greedy consumers, wanting more and more, and greedy 'deregulated' producers, making excessive profits, have created a crisis."

The "Deregulation" Political Lie

But what seems odd is that these electricity companies are going bankrupt! One would think that in a “deregulated” market they should be able to charge anything they wanted because they are a monopoly in their area. Under such conditions why are they going under? The reason is quite simple. In spite of what Gray Davis, CNN, the Los Angeles Times, the New York Times, or any one else in the media tells you, the electricity market in California was never deregulated. A few years back government restructured the market but the politicians kept firm control.

Now, of course, Gray Davis is not about to admit that the policies his party promoted are the reason for blackouts in the Golden State. He will keep the deregulation lie going because if he actually told the truth, Democratic control of California might be ended. California today is firmly Left-wing in temperament. Davis is a Democrat, so are both Senators from the State, and both houses of the state legislature are under Democratic control. California has been flying the red and green for a long time: red for the socialist policies of the Democrats and green for their environmental “concerns”. Put together these two sets of policies were enough to destroy energy in the most populous state in America.

I was a resident of San Francisco for some time and I’m familiar with the rabid conservativism of the Left. All change is opposed. Growth is bad. New is evil. Any new technology is fought. Any new building is condemned. Leftism today is fundamentally an ideology of stagnation and decay. One reason Leftists hate the market is because of the constant change which capitalism creates. They are truly conservatives huddled in the dark, particularly these days in California, lamenting anything new.

As the population of California grew the Left tried disparately to stand in the road of progress screaming “Stop”. But it didn’t work. California, in spite of a plethora of new regulations banning building and expansion, has a population that continues to grow. Some 33 million Americans now live in the state. And 33 million people use energy. But the Left hates energy. They opposed nuclear power because they don’t understand it. Dams, to create hydroelectricity, are fought by the Greens every step of the way. Coal-powered energy plants create “pollution” and are hated with a passion. Wind and solar energy can’t do the job and those forms of energy creation which can are not “politically correct” for the mindless eco-freaks. And in California the Reds and the Greens got their way. No new power plants have been built there for over a decade. Even that wasn’t enough to satisfy the primativists on the Left. Some power plants in California were ordered shut down and dismantled.

More Drivel from Krugman

The fact that the Left in California has successfully fought expansion of energy production doesn’t faze “journalists” like Krugman. He, instead, found the actual culprit to be the utility companies — as if this a surprise. He claimed: "But in the deregulated market, where prices fluctuate constantly, companies knew that if they overinvested, prices and profits would plunge. So they were reluctant to build new plants — which is why unexpectedly strong demand has led to shortages and soaring prices." Once again this non-existent “deregulation” is to blame. And the electricity companies, he claims, simply didn’t want to build more power plants because of the fluctuations of the market. This, of course, doesn’t explain why in other truly deregulated markets utility companies DO build new power plants. And he ignores the fact that the Greens make it impossible to build new power plants in California. He further ignores the fact that under California’s restructuring, utility companies were forced by law to sell off any power plants they owned and couldn’t build new plants if they wanted to do so — which they do want to do.

Now notice he insinuates that utility companies create phony problems to drive up prices and make huge profits. The reality is quite the opposite. Instead of making huge profits these companies are suffering terribly. They are on the very edge of bankruptcy. They can’t pay payroll sand the value of their stock is plummeting. The owners of the utilities — the stockholders — aren’t making huge profits. They are losing equity. Both Southern California Edison and PG&E; had their financial ratings reevaluated to “junk” status. But media pundits, who are illiterates when it comes to the workings of the market, mouth mindless Left-wing slogans which have nothing to do with the facts.

In spite of a population that is booming the energy market has been forced into artificial stagnation by an abundant supply of regulations. From 1996 to 1999 alone the population of the state increased by 12 percent. But electricity output was only increased by 2 percent.

Krugman's rabid Leftist sympathies so cloud his ability to think rationally that he invents scenarios where utility companies purposely create shortages. He claimed: "Suppose that it's a hot July, with air-conditioners across the state running full blast and the power industry near the limits of its capacity. If some of that capacity suddenly went off line for whatever reason, the resulting shortage would send wholesale electricity prices sky high. So a large producer could actually increase its profits by inventing technical problems that shut down some of its generators, thereby driving up the price it gets on its remaining output."

Try to make sense out of that.

Under normal conditions even regulating the supply of power isn’t enough to cause blackouts and the bankruptcy of electric companies. Assume that all the “environmental” regulations were left in place and no additional supplies of electricity could be created in California to meet rising demand. Under such conditions the market will still find a solution. Prices would start to edge up creating an incentive for consumers to conserve energy. The higher the price for electricity the lower the demand. And utilities would still be able to import electricity from out-of-state supplies who are hampered by all the California regulations. Consumers would pay more, but wouldn’t face blackouts, and utilities wouldn’t be going down in a sea of debt.

So what went wrong in California? As is typical, the Democrats and their Green allies, wanted to hide the effects of their own destructive polices. The rising demand for energy obviously required a rising supply to meet the needs. But environmental regulation prevented an increased supply. The only way for the pressure, that was building up, to escape would be through rising prices. But consumers would revolt if they started getting electricity bills that increased monthly. And if that happened they just might vote the rascals out and see Environmentalism for the anti-humanity movement that it is.

Politicians Still Regulate Energy Prices

To try and prevent this from happening the Democrats simply told the electricity companies in California how much they could charge their customers. In other words the price consumers pay has nothing to do with supply and demand but is artificially imposed by the state. Yet the Left screams that California is suffering from the results of deregulation. If this doesn’t show that Gray Davis, the Los Angeles Times, the New York Times, CNN and a host of other media “reporters” are dishonest and biased then what will? How California’s array of government controls on energy is “deregulation” defies imagination.

The crisis in California has been brewing for some time. The politicians in Sacramento just thought they could get away with it. But this year things started getting bad. Below average winter snowfall has meant lower than average water flow through the rivers. This has reduced hydroelectricity outputs. Winter storms knocked out a couple of power plants which further reduced supply. And prices were going up throughout the West for electricity. Utilities did have one aspect of economic life deregulated — they were allowed to pay full wholesale prices but increases in costs couldn’t be passed on to consumers. The retail price was set by the state.

So as the price of electricity rose the cost for supplying energy also rose. But none of this could be passed on to the actual users. At points utilities were paying 100 times more for the electricity than they were allowed to charge. For every $1 of revenue they were paying out $100. No one can exist under these regulated, artificial conditions and something had to give.

While utilities are “free” to pay the full-price of power they are required to sell it at below cost to consumers. When they bleed money as a result, this is blamed—not on the controls of the retail price— but on the market value of the wholesale price. That utilities can no longer own their own power plants is ignored. That all purchases of wholesale power must go through a state-agency is ignored. The fact that utilities cannot privately enter into contracts for the long-term purchase of power is also ignored. The crisis was created by government price controls, and other regulations are preventing utilities from taking sane measures to solve the problem. So one stupid policy created the crisis and several other stupid policies prevent the problem from being solved. And then mindless Democrats, Greens and other energy fascists, blame the mess on the free market. This mentality, in an individual, would be enough to have him committed to an institution.

Governor Davis, Power Fascist

Governor Davis follows the energy fascist line without wavering. He lies to the public by saying the problems California experiences is because deregulation is “a dangerous and colossal failure.” He threatens to confiscate all private utility companies, a move that would earn him applause from Mussolini if Mussolini were still alive: “There is no easy solution. But, if I have to use the power of eminent domain to prevent generators from driving consumers into the dark and utilities into bankruptcy then that’s what I’ll do.” He even demanded that criminal sanctions be used to punish power generators who refuse to supply bankrupt companies with more power — power they can’t pay for. Like every fascist before him he announces : “the time has come to take control of our energy destiny.” The answer is to abandon private property, destroy free enterprise and replace it with state-owned, state-managed utilities. Of course as Governor he’ll be in line to hand out cushy jobs to the very idiots who created the crisis in the first place.

Left-wing “consumer” groups are jumping on the Davis bandwagon and demanding socialized or state-owned utilities. That way they can continue with the typical slight-of-hand of the socialists. Under the new system the state will buy the electricity at market rates and then sell it to consumers at a loss. Consumers will be lead into believing that electricity is cheap because the direct cost of their electricity will be subsidized by the state. Of course the losses will still be paid to the state in the form of higher taxes. Worse yet consumers will believe that electricity is more plentiful than it really is because of the artificially low prices. And this will encourage them to over-use electricity causing every more and more shortages in the future. The Greens and energy fascists like Governor Davis will actually be encouraging people to waste energy. Though I have no doubt that in the future, they will come up with coercive measures to restrict energy consumption. The fascist mentality are quite willing to force people to do what they voluntarily would have done in a free market. The only conclusion one is left with is that Davis and other energy fascists believe in the morality of coercion.

"Prices" are Lower, Taxes are Higher

So disassociated from reality is the Left that they will actually believe illusion of lower prices is the truth. They will point out to consumers that state-ownership is more productive because prices are lower. They will ignore the fact that actual costs will be far higher and that taxes must make up the difference. And they will delude themselves, and the public, into believing that a “deregulated” market actually existed in California and that free enterprise created the crisis. Meanwhile they will cook up further and further policies which will turn the crisis into a full-fledged disaster.

But this is what the eco-nazis want. Higher taxes will drive out industry. It will close companies. It will reduce private enterprise in California. Of course that will mean fewer jobs and less productivity — which they will blame on the market anyway. Then these energy fascists will propose more solutions and the problem will expand. At some point the @#%$ will really hit the fan. But Davis won’t care since he’ll be retired or seeking higher office. All along the way he will promote destruction while scape-goating the free market.

As long as Democrats know that a captured media will lie for them and disseminate their propaganda they hope that the public will never catch on. If they are right then California is really going to be in trouble and I, for one, am glad I got out. This crisis is a warning signal. But if Californians don’t wake up and throw out the Democratic ruling class they are just asking for more of the same.

And while there is nothing in the policies of George W. Bush to get excited about, we can be thankful that Al Gore lost the election. Gore would have done to America what his party has done to California. Californians have regularly voted Democrats into office. They have consistently voted for Green referendums and supported “environmental” laws. Now they are reaping the results. If they shiver because they have no heat this winter that’s fine with me. Get used to the primitive conditions which these policies inevitably create. Just don’t be cowards and try to place the blame on the free market. Californians wanted to return to nature, so they might as well enjoy it. They got their wish and they got it good and hard.

Jim Peron is the author of Die, the Beloved Country?, a book exposing the misrule by mismanagement of the African National Congress during its first term of office in South Africa. He recently finished an expose of the Mugabe regime: Zimbabwe: the Death of a Dream. He can be contacted at peron@gonet.co.za.

-- mbo (rfp@mail.com), January 31, 2001.

Where was drivel originally published? Anyone who likes to use the word "eco-nazis" is immediately in la-la land. He's blathering about regulations, but read the quote above -- deregulation has caused even more cumbersome regulations and and shifting systems that DWARF the old system.

If it worked so well for nearly a hundred years, and served the consumers, why take it down just so energy profiteers can reap gross windfall profits at the expense of the little person?

DEREGULATION IN ENERGY HAS NEVER WORKED AND NEVER WILL WORK!

Notice how the author steps in lockstep with Cheney -- "they made this mess -- let them self-destruct in it. It's their own damn fault!" That's "compassionate conservatism" for you -- let them starve, let them freeze, let them go under economically. In this world, it's survival of the fittest at the expense of the many.

MAXIMIZE PROFITS, SOCIALIZE LOSSES.

Socialism works just fine in these asinine simplistic "free market" minds as long as everyone picks up the tab and cleans up after the energy profiteers' mess.

-- Coup2k (thanks@pubs!.com), January 31, 2001.

I particularly liked this line:

"In spite of what Gray Davis, CNN, the Los Angeles Times, the New York Times, or any one else in the media tells you, the electricity market in California was never deregulated."

That's rich! Don't trust the New York Times, folks, or even the Los Angeles Times, which has its hands right in the crisis at home. Trust this guy who is so subtle he uses phrases like "fascism" and "eco- nazis."

Right.

-- Coup2k (thanks@pubs!.com), January 31, 2001.

Yes where is the damn link/reference for this pile of crud? Will the meme who posted this baloney at least provide a link back to WorldNutDaily.com or whatever GOP faxlist it came from?

BTW the original article, top of thread, is excellent and thanks for posting it.

-- Doc Paulie (fannybubbles@usa.net), January 31, 2001.

No wonder no link was provided. No reputable journal or newspaper would print this garbage. Notice how often the writer uses these sorts of phrases:

"mindless eco-freaks"

"Reds and the Greens"

"rabid Leftist sympathies"

"Like every fascist before him"

"typical slight of hand of the socialists"

"eco nazis"

"mouth mindless Left-wing slogans"

"would earn him applause from Mussolini"

"energy fascists" (used four times!)

This is the desperate, extreme language of a guy who, faced with a problem that runs counter to his rigid "free market" ideology, cannot form a rational rebuttal. So he resorts to mud slinging, using terms from Nazi Germany.

So subtle!

He declares it's a "lie" to say deregulation is a "dangerous and colossal failure." So does he call rolling blackouts in California a "success"?

He states that Democrats have "consistently supported 'environmental' laws" like it's a crime (in fact, most Americans support environmental laws), and asserts that environmentalism is an "anti- humanity movement."

Yeah, protecting our air, water, and land is "anti-humanity."

What utter bullshit!

About the California utilties, he whines, "Instead of making huge profits these companies are suffering terribly."

Yet in the first four years after deregulation, the two operators stuffed their accounts with $20 billion in windfall revenues.

Yeah. Cry me f*cking a river.

-- Coup2k (thanks@pubs!.com), January 31, 2001.

"Californians wanted to return to nature, so they might as well enjoy it. They got their wish and they got it good and hard."

That's the punitive hard-right morality for ya. Freeze, go into debt, go without, just take it "good and hard." If this guy could wield a giant paddle and beat all the Democrats in California for wanting to protect the environment, he would.

-- Coup2k (thanks@pubs!.com), January 31, 2001.

Here is a link spreading the meme...http://ww w.zolatimes.com/V5.5/calif_power_crisis.html

From one of those Capitalist profiteer website masquerading as if they support Free Enterprise, or even knew what that meant. This article should be a hit on all the normal memetic outlets the idiots feed from--WND, FreeRepublic, Newsmax and of course the talkradio spewers.

Ever wonder where your money ends up for all these "energy shortages"...try here for some clues. Yep the old balanced effcient Free market at work it is!

-- Doc Paulie (fannybubbles@usa.net), January 31, 2001.

It amazes me, the amount of crying and bitching you California folks can do. Don't ya'll want clean air-pure water-beautiful vistas?
Then pay for it...the first fees to the rest of us that must endure what you won't, so that you may have your dream world. Commerce demands power...if you can't or won't produce it locally, where you can have a say in the price, then wither.

-- SingleStar (Tx@#1.com), January 31, 2001.