-Caveat Lector-
~~for educational purposes only~~
[Title 17 U.S.C. section 107]
California Dreaming
by William Anderson
When we last left the Socialist Republic of California,
someone had switched off the lights. According to the
latest news, someone has switched them on again as
the Democrat-dominated California State Assembly has
supposedly "solved" the state's electricity
problems. Like so many other "solutions" that come
from government, this one further promotes the fiction
that government solves problems that private
businesses create. Furthermore, this plan also
encourages the belief that tax increases are justified
in the face of higher costs, but private price increases
are evil.
These pages and numerous other publications have explained
why the nation's wealthiest state recently has experienced
rolling blackouts more identified with Third World banana
republics. Politicians and their environmentalist allies
have kept new power generating facilities from being
constructed in California, which means electric utilities
must purchase power from out of state producers to satisfy
the demand for electricity. Furthermore, legislators
capped the price utilities could charge California residents
at levels well below what utilities must pay electricity
wholesalers for out of state power. The whole scheme
was a recipe for disaster.
While California's governor Gray Davis and the legislature
are being praised for "solving" this problem, the
government "solution" needs to be scrutinized. Even a
cursory glance at what the legislature did finds that
California politicians have committed fraud on a massive
level. Furthermore, we can easily deduce that the power
crisis was created not by private enterprise, but by the
politicians in Sacramento. It is also clear that this
$10 billion "plan" also extends the tentacles of state
power even farther.
The legislation permits the state to sell bonds in order
to pay for long-term contracts with outside power
producers -- the very thing that the legislature forbade
private utilities to do. Furthermore, now that the state
is financing this "bailout," residents will now see rate
hikes and higher taxes, of course, to pay for the bonds.
What is most telling here is that the rate increases are
being pushed through not to compensate the private
utilities which have been driven to near bankruptcy by
the legislatures policies, but rather to repay the state
government for power purchases.
The arrogance here is breathtaking. Gov. Davis and
other California politicians, along with the "consumer
groups" that make up part of the Democratic coalition,
are insisting that the state be compensated for its
electricity purchases. Fair enough, but these same
folks are the ones who demonized private utilities for
wanting to do the same -- and pushed through legislation
that prevented them from doing so.
Of course, Davis and the politicians do not stop here.
Consumers who use more electricity than a state-approved
baseline will be penalized to the tune of 30 percent.
Again, this is something private companies are prohibited
by law from doing.
Furthermore, until further notice California retailers
who do not reduce outdoor lighting during nonbusiness
hours will be committing a crime and will face penalties
of $1,000 a day. On top of that outrage, the state will
spend nearly $200 of taxpayer funds to provide financial
incentives to individuals and businesses that buy
"energy-efficient" appliances, equipment, and lighting
fixtures.
There is no word yet on whether or not the state will
compensate the private utilities that went nearly $13
billion in debt to finance the legislature's Rube Goldberg
electricity scheme that caused this crisis in the first
place. The present rhetoric coming from the legislature
and governor is that state funds should not be used to
"bail out" the "mistakes" of private companies, even
when the state government was directly responsible for
the utilities' plight.
While this package seems quite logical to the political
classes of California and beyond, not to mention their
media allies, in actuality it is an admission of
government failure on a massive scale. First and most
important, price controls in the face of high demand
will always lead to shortages. The laws of the State
of California could not supercede the laws of economics.
By lifting price controls in order to compensate state
government, the legislature was implicitly acknowledging
that price controls are intellectually and morally
bankrupt.
Second, once again we see the state attempting to force
something upon citizens that they would not want
themselves. Furthermore, the legislators assume that
the only way that individuals will cut back on electricity
use (at a market price) is for the state to force them
to do so. Indeed, individuals may not actually cut
back on using electricity even when prices rise, but
they will compensate by cutting back on other things.
The legislature assumes that electricity should be
treated differently than other products, which is
fallacious. In other words, the political classes
arrogantly assume that individuals do not know what
is good for them and that politicians must decide what
is good and what people can be allowed to possess.
Third, despite the fact that the politicians and
consumer groups have been insisting that price
increases in the current situation have not been
necessary, in the end consumers will still have price
increases. However, now Californians have the added
burden of basically bankrupt utilities and the ongoing
crises that condition will continue to create.
Last, the state has become stronger by deceiving the
public. Thus we have more government, less liberty,
and an even more ignorant public than before. It
seems that once again, California politicians have
come out on top.
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