Pat says:
>(I'm continuing this rap because on another list, Comrade Jones was
>hinting -- no, accusing -- that I've got no sense of broader crisis
>theory. But what is needed is a set of intermediate concepts to
>translate all these deeper, and theoretically-comprehensible, "laws
>of motion" of capitalism into the sites of immediate crisis-symptoms.
>My doctoral supervisor David Harvey uses the idea of
>a "spatio-temporal fix"--or in english, shifting and stalling
>the crisis--which I find useful. Or are such intermediate concepts,
>to link people's observations of crisis to a critique of capitalism,
>not so crucial in B.A. or London, Nestor and Mark? Just curious
>on how you tell a broader story...)
From Mark's post, I gather he's saying that in the immediate terms:
"All these compelling arguments for neoliberal TINA vanished like
petrol vaporising in hot sunlight when shortages began to bite.
Suddenly everyone, even rock-ribbed, tunnel-visioned Republicans
believe in re-regulating to remove market 'excesses' and
'inadequacies.'" That's the direction they are heading, it seems to
me:
***** The New York Times
January 26, 2001, Friday, Late Edition - Final
SECTION: Section A; Page 1; Column 2; National Desk
HEADLINE: California Gets Scant Sympathy From Neighbors
BYLINE: By SAM HOWE VERHOVEK
DATELINE: SEATTLE, Jan. 25
...Meanwhile, while no other Western state is as far along with
deregulation as California is, the recent woes seem to be putting the
brakes on any movement toward deregulating. Several Oregon
officials, including Mayor Vera Katz of Portland, have called for
postponing a limited deregulation plan in that state.
And earlier this week, Gov. Kenny Guinn of Nevada, said in his State
of the State speech that he would delay a plan there that had been
set to begin this fall.
"I cannot and will not support deregulation until I am assured that
power supplies are secure," Governor Guinn, a Republican, said....
*****
***** The New York Times
January 27, 2001, Saturday, Late Edition - Final
NAME: S. DAVID FREEMAN
SECTION: Section A; Page 8; Column 1; National Desk
HEADLINE: PUBLIC LIVES;
California's Leader in Singing the Praises of Public Power
BYLINE: By TODD S. PURDUM
DATELINE: LOS ANGELES
...To the praise of politicians, power company executives and
consumer groups alike, he [S. David Freeman] was tapped this week by
Gov. Gray Davis as the point man in negotiating new long-term
electricity contracts, to keep the lights burning and the state's
major private utilities afloat.
The only question was what took so long. As the head of the Los
Angeles Department of Water and Power, the municipal utility whose
all-powerful reach made the modern city possible, Mr. Freeman has
been a holdout against deregulation or divestiture of the
department's generators. The result is that Los Angeles is insulated
from the blackouts threatening the rest of the state, and the D.W.P.
(as it is known) issues daily news releases detailing just how many
surplus megawatts it has for sale.
You look at where the lights are on in California, and you look at
the municipal utilities, Mr. Freeman said in a brief interview as he
shuttled between negotiations in Sacramento. "There are a lot more
detailed reasons, too, but I do think it's fair to say that the
public power agencies continue to feel responsible for providing the
power. Deregulation kind of leaves it up to Elvis Presley."
Mr. Freeman, who initially supported deregulation but came to believe
it was a mistake, added: "It's time the words 'public power' are
pronounced again in public. It was public power that turned the
lights on in rural America. Not too many people are alive today who
know that. We've had electricity in the whole country for 50 years,
but not much more than that."...
...What Mr. Freeman must do now is negotiate the best prices possible
for the state to buy energy, and pass it along to the state's major
shareholder-owned utilities. The state would float bonds to finance
the deal, in exchange for some kind of equity stake in the utilities,
and ratepayers, too, would face extension of recent increases to help
pay off the utilities' debts.
Mr. Freeman said that "nobody'll know" his strategy until the deals
were done. He rejects any suggestion that the power crisis has been
artificially sparked by profiteering wholesalers and utilities in an
effort to raise rates.
"The stupidity theory explains most things; the conspiracy theory
doesn't," he said. "We were just stupid in not thinking through the
way deregulation would work in a shortage."
"That's not to say you couldn't have a surplus and still have people
gaming the market," he added. "But that's not the reason we have
this problem. It's because we have a shortage."
To that end, Mr. Freeman is also pressing for a sweeping program of
incentives for energy conservation and creation of a state power
authority that could buy transmission lines and finance the
construction of power plants.
Even now, a lesson from his father's old store is not lost on him.
"His favorite expression was any fool can buy an umbrella on a rainy
day," Mr. Freeman said in his Tennessee twang. "It takes a wise man
to buy an umbrella on a sunny day." *****
***** The New York Times
January 29, 2001, Monday, Late Edition - Final
SECTION: Section A; Page 14; Column 5; National Desk
HEADLINE: Mixing Profit and Policy And Stirring Concern
BYLINE: By JAMES STERNGOLD
DATELINE: LOS ANGELES, Jan. 28
...The issues hidden in the details of the comprehensive rescue plan
were that it could force state officials, from the governor down, to
think more like business managers than public policy officials, more
worried about stock prices and increasing profits than purely focused
on the public good. And it could lock them into this mind-set not
for a short time to get the state through the energy crisis, but for
many years....
...The legislative plan fashioned last week would have the state
become the principal buyer of power, which it would then sell to
consumers. It would sell billions of dollars in bonds to make those
purchases at rates determined by long-term contracts, extending as
long as 10 years. The utilities, Pacific Gas and Electric and
Southern California Edison, appear likely to receive a rate increase
and to be given the right to split off a small part of every monthly
bill, money they could use to pay off the $12 billion in debts.
But perhaps the most ideologically charged part of the plan is the
state's proposal to take a kind of stock option in the two
financially battered utilities in return for the relief.
The idea sounds simple: if taxpayers take on a lot of financial risk
in nursing the utilities back to health -- by selling state bonds to
assist them in buying power or absorbing rate increases -- then
taxpayers should profit with shareholders when better times return.
It seems like a new-economy solution to the problem. There is a
precedent. When the federal government bailed out the Chrysler
Corporation in the 1970's with loan guarantees, it received stock
warrants that turned a profit of hundreds of millions of dollars.
"People are very familiar with stock," Governor Davis said on Friday.
"They understand stock options. They understand participation in the
upside. I think that's a clear benefit."
But experts now say that owning such an interest would make the state
less than a disinterested party in energy policy, an area in which it
has far more influence than the federal government had over the
automobile market in the 1970's.
Severin Borenstein, director of the University of California Energy
Institute, said the most obvious problem would be applications by
utilities for electricity rate increases. Any such increase could
send the share prices soaring, raising the question of which impulse
state regulators would follow. This is an issue that could come up
with even greater force several years from now if, as expected,
wholesale electricity prices start to fall, perhaps sharply, and
ratepayers agitate for cuts. Who would the regulators listen to?
A longer term concern, Mr. Borenstein said, comes later, when the
state is expected to begin considering introducing more competition
into the power business. How would it respond to applications from
other companies that want to compete directly with Pacific Gas and
Electric and Southern California Edison in the retail market? That
competition could drive down stock prices.
"This plan does set up serious conflicts of interest that could
affect us for years," Mr. Borenstein said. "There's a reason states
generally don't take equity stakes in private companies."
He added: "At the very least, this has to be treated with great
caution. But the real problem is that this imposes enormous
constraints on any effort to deregulate this market in the future,
particularly at the retail end, perhaps for 8 to 10 years."...
...At least for now, consumer advocates are skeptical, on several
grounds. First of all, they feel that the utilities, their management
and their shareholders should pay for the deregulation debacle, not
ratepayers, who never pushed for the plan. But if the ratepayers are
made shareholders, that would be impossible. Also, the advocates say
the warrants would never produce a level of profits that could cover
the risk taken on by taxpayers -- to the tune of many billions of
dollars.
"Ultimately, there is a real conflict, but more important is the fact
that this is just window dressing for a $10 billion bailout," said
Harvey Rosenfield, an official at the Foundation for Taxpayer and
Consumer Rights. "If we're going to bail these companies out, we
should get a dollar-for-dollar return, with interest, not a few stock
warrants."
Janee Briesemeister, a senior policy analyst at Consumers Union,
agreed. "Under deregulation, all California consumers got was a bunch
of empty promises," she said. "Now that deregulation has failed,
they're being asked to foot the bill." *****
What should be the response of the leftists to this development? Any thoughts?
Yoshie
_______________________________________________
Crashlist website: http://website.lineone.net/~resource_base
