On Wed, 24 Jan 2001, John D. Giorgis wrote:
> At 09:10 AM 1/23/01 -0800, Josh wrote:
> >I'll take the obvious and presumably dumb option: finish deregulation
>
> Awww...... you take all of the fun out of it..... Specifically, I was
> hoping for a response from certain listmembers that somehow associated the
> California "deregulation" with supply-side economics.
Oh, you must mean me. No, there's no direct connection. But if you take
the view of supply-side/trickle-down/voodoo economics that I do (which you
don't, I expect) then you may see a striking similarity in the
psychological assumptions at work.
The justification offered at the time for Reaganomics (since the nation's
conscience clearly demanded a justification for policies that so favored
the rich) was that the rich would use the money to invest in business; the
benefits would "trickle down," and those who were now poor would find
themselves even better off in a more flourishing economy. IMO that didn't
happen; rather, the reverse. We probably disagree there, too, but so be
it.
The "deregulation" plan is similar in that it was structured to offer a
chance to benefit to one segment of the power producing economy while
still holding others in check--wholesalers could charge what they would;
retailers could not, and their purchasing flexibility appears to have been
severely limited. There seems to have been an assumption that this manner
of structuring the economic "playing field" would cause one segment of the
power industry to do, in the course of pursuing its enlightened
self-interest, what was also in the interests of all: create more power,
hence more power plants, and less power at reduced prices.
The assumptions are parallel: give those who have and control the
money/power more money/power and fewer restrictions, and trust them to
act in the best interests of everybody (market logic will oblige
them to do so, according to this mystical theory) instead of taking
advantage of the situation for short term gain.
So the CA power deregulation fiasco reminds me of voodoo economics in two
ways. 1) It seems to rely on a farcically inaccurate assumption about
human nature. 2) It provides a convenient way for the elected government
to abdicate itself of responsibility for a genuine public concern by
turning fate over to "the market" in a haphazard way, IOW giving control
of a public issue to a handful of private decision-makers whose business
plans don't include working toward the long-term good of the public.
Odds are we disagree on nearly all the assumption underlying my POV, but
there ya go. :-)
Marvin Long
Austin, Texas
