editorial

Power gridlocked

February 18, 2001

We still remain a little shocked that anyone would want to socialize a system of private property worth somewhere between $3 billion and $9 billion. Wasn't socialism unplugged a decade ago at the end of the Cold War?

But that's exactly what would happen if the Legislature approves Gov. Gray Davis' proposal for the state to use revenue bonds to purchase control of most of the state's electric power grid.

In a Friday conference call with us and several other newspapers, Gov. Davis responded to our question on why a private alternative isn't being pursued: "Right now, we're in an emergency. And in an emergency, the government has to act to right the ship....If we use a private company, there's no guarantee there will be improvements in the [transmission] lines at the choke points." We disagree. Businesses make capital investments routinely.

Markets work through many buyers and sellers haggling over prices and coming to a voluntary and rational agreement on a price.

By contrast, socialism doesn't work because, as economist Ludwig von Mises pointed out, there's no rational way to calculate prices for scarce resources. Socialism implements its costs and benefits through force and political maneuvering. We're already seeing that.

The Register reported Friday, "The governor's proposal ... also would give the state about 100,000 acres surrounding Southern California Edison and Pacific Gas & Electric's hydroelectric plants. The land would be turned into wildlife preserves."

But enmeshing conservation projects with the electricity crisis shows that, even with the state's power supply near collapse, government can't concentrate on solving one problem to the exclusion of others.

In a letter on page 6 of Commentary, Jon Coupal, president of the Howard Jarvis Taxpayers Association, has raised four pertinent objections to purchasing the grid: 1. The grid's value will be socialized, so it won't produce tax revenue. 2. Taxpayers will foot the bill for years. 3. Taxpayers will be responsible for running the grid. 4. The aging grid needs "millions to repair." Such a deal!

Better solutions are being offered by others, including Republican Assemblyman John Campbell of Irvine, a member of the Assembly Energy Cost and Availability Committee.

The first action he wants: Find the facts.

He said the potential $9 billion deal is near the $12.8 billion Southern California Edison and Pacific Gas & Electric say they need to avoid bankruptcy. "But many consumer groups say the real number is closer to zero. Many Republicans and I believe the number is closer to zero than to $12.8 billion. We need to find out."

Second, he said, "I'm not even sure the grid needs to be sold from the existing companies." But if it should be sold to help the utilities meet their alleged debts, he believes a private purchaser should be found.

On Monday, Trans-Elect, a firm in Washington state, said it would like to buy the grid for $5.25 billion.

We believe the Legislature should reject Gov. Davis' resort to a solution that vastly increases the size of government in favor of Mr. Campbell's plan: Get the facts. Implement a private solution.

http://www.ocregister.com/liberty/editorial1.shtml

-- Martin Thompson (mthom1927@aol.com), February 18, 2001

Answers

"...Markets work through many buyers and sellers haggling over prices and coming to a voluntary and rational agreement on a price.

By contrast, socialism doesn't work because, as economist Ludwig von Mises pointed out, there's no rational way to calculate prices for scarce resources. Socialism implements its costs and benefits through force and political maneuvering. We're already seeing that..."

WOW! Someone understands elementary economics!

It's refreshing to see that there are those who actually passed Econ.101. Unfortunately the Governor of the People's Republic of California obviously failed that and probably all other courses involving economics, reason, rational thought, etc.

This problem was a LONG time in the making and it's not going to be solved soon...and certainly not with standard Socialist/Communist methods being applied by the PRC's Gov.

-- California-LandOf (FruitAnd@Nuts.com), February 18, 2001.

The electric grid is massively subsidized by the public -- that is socialism for corporations, capitalism for everyone else.

The "invisible hand" of the so-called free market is giving California the finger.

I hope that these radical libertarians also advocate the immediate cessation of all public subsidies for fossil fuels, including troops and weapons designed for use in the Middle East, the funding of the interstate system (beyond that covered by the gas tax), public costs not factored into the gasoline price (countless, but they include medical costs, policing of roads, etc) to name a few of the benefits that the citizenry gives (without consent) to the fossil fuel industry.

Public ownership of utilities is long overdue in California.

If Gray had any backbone, he'd initiate criminal proceedings against the utilities that have gouged the public.

Sacramento and LA aren't having the problems that San Francisco and San Diego are having. Which cities have public power? Which have a "private solution?"

I'm glad that the utility that I have is a member owned co-op. All profit is recycled back to the members, not to distant shareholders. It's not "socialism" -- merely common sense.

I'd be interested to know how many millions in public relations have been spent by PG&E and other private utilities that have recently jacked their prices up.

prices up

-- mark (mrobinowitz@igc.org), February 19, 2001.

"...Public ownership of utilities is long overdue in California..."

I rest my case...the above is one of clearest examples of standard Socialist/Communist behaviour. Good luck to you and your Commie pals. May you each take from each other til there's nothing left to take...as is the case in most Commie countries.

-- California-LandOf (FruitsAnd@.Nuts.com), February 19, 2001.