Friday, February 2, 2001

Story last updated at 10:16 a.m. on Friday, February 2, 2001

ENERGY: Another shrug

Ayn Rand, one of the most influential authors of all time, who was born in Russia 96 years ago today, would have something to say about the California energy crisis if she were alive.

In her epic 1957 novel Atlas Shrugged, Rand chronicled what would happen if capitalists, rather than labor, went on strike. It became the second most influential book in Americans' lives, after the Bible.

What would interest Rand is the way politicians are trying to duck responsibility for a situation they created by trying to control free markets.

Wholesale power prices in California have soared, but the electrical utilities are unable to pass on the costs because the state limits retail rates. The utilities, heavily indebted, do not have enough cash to meet their bills and surging demand for electricity has resulted in brownouts.

The state Senate approved a $10 billion plan to rescue utilities from bankruptcy but the bill was rejected by the Assembly.

Meanwhile, the crisis is spreading to nearby states that are straining their own capacity trying to help California and, in The Washington Times, U.S. Sen. Frank H. Murkowski of Alaska said that a federal order issued by the Clinton administration, forcing power generators to sell electricity to California's utility companies, could make federal taxpayers liable to creditors for the cost of that power if the utilities go bankrupt.

President Bush has resisted Democratic calls to impose federal price caps on the rates that power generators charge the California utilities. Putting the generators out of business is no better than putting the utilities out of business.

A White House spokesman had said yesterday, "the best way to help California to help itself is to allow California to do what they are doing, which is to enact the legislation that they're working diligently on now."

What Rand probably would say is that the politicians caused supply to be decreased while demand was increasing. As everyone knows, that means higher prices, which the politicians have prohibited. It is a suicidal course.

http://www.jacksonville.com/tu-online/stories/020201/opi_5290568.html

-- Martin Thompson (mthom1927@aol.com), February 03, 2001

Answers

Good grief! Who let this wild eyed libertarian in here? In The Peoples Republic of California, no self-serving bureaucrat like Gray Davis ever saw a market problem he couldn't turn into a political opportunity.

-- Warren Ketler (wrkttl@earthlink.net), February 03, 2001.