🚀 go-pugleaf

On Wed, 21 Mar 2001 15:48:37 +0000 (UTC), noring@olagrande.net (Jon
Noring) wrote:

>In article <jtnews@optonline.net> wrote:
>
>>How come the California gov't
>>won't raise prices to kill electricity demand?
>
>Liberal politics.

You are wrong.  Conservative politics is the reason that the
California gov't won't raise the prices to kill electricty demand.
Whenever you have government setting prices that is LIBERAL politics
(i.e. the retail caps).  The conservatives don't want the government
to regulate prices, up or down, and that is conservative politics.
>
>>They should get rid of all the residential
>>and business price caps and just let the prices rise
>>to meet demand.  Otherwise, they'll have
>>to deal with rolling blackouts forever.
>
>What's really odd is that the environmental wing of the left should applaud
>raising the price of energy to its true market level since that will reduce
>demand (thereby cutting greenhouse gas emissions), make alternative energy
>more economically attractive, etc.

They do.  I will explain the error in your thinking below:  

>  I seem to recall a couple decades ago the
>environmentalists saying this very thing -- the low cost of energy leads
>to over-consumption, leading to more pollution and other environmentally
>unfriendly results (such as less incentive for industry to develop more
>energy-efficient devices, and for manufacturers themselves to be more energy
>efficient.)

And they stand by this.
>
>Do I see an eventual estrangement between the liberal left and its
>environmentalist wing over this issue?

No.  What you fail to understand is that there is a world of
difference between true cost and market demand.  What the
enviromentalists like me want is for prices to reflect the true cost
of engery, including the environmental cost.  What the liberals like
me want is for profits to be regulated by government to prevent
gouging and profit taking at the expense of supply (i.e. the poor at
the retail level) and our publicly owned natural resources.  The
retail price caps protect the poor.  However, so long as the
deregulated wholesal market does NOT reflect true cost, we will have a
social welfare subsidy of the federal tit-sucking, commie industries
and the public at large.  This subsidy is brought to us curtesy of the
the Earth and future generations.  So long as true costs are not
reflected by the market, the welfare for the rich will continue.  

A true free market and cost internalization would prohibit such
tit-sucking.  However, the  problem there is profit taking and price
gouging at the deregulated wholesale level in the private
use-for-private-profit of public resources (water/hydro, oil, air,
etc.).  The deregulated market has liquidated capital reserves (there
is not now and never has been a shortage due to prohibitions on new
plant construction or capital impovements imposed by
environmentalists), raised prices to increase profits, and brought the
wholesale supply back into accord with the wholesale demand.  In the
process of liquidation, they payed shareholders and took profits.  In
the end, the wholesale supply more correctly reflects the wholesale
demand but the resources from liquidation did not go into capital
reserves for retail demand.  They went into pockets of the
profit-taking greedy rich who gained on the public resources without
protecting those resources or reflecting the true cost imposed on
those resources by their actions..  The free market at the wholesale
level dictates that excess supply be reduced to better reflect actual
demand.  With narrow supply margins you run the risk of demand
exceeding supply at the retail level.  The industry needs extremely
heavy regulation to ensure that the public sets the permissible profit
percentages at the production level and that the excess is plowed back
into alternative, clean sources of energy and subsidy for those who
need it, not some fat cat on the public dole.

>Jon Noring