🚀 go-pugleaf

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

skunkrain <skunkrain@earthlink.net> wrote:
>
>You are wrong.  Conservative politics is the reason that the
>California gov't won't raise the prices to kill electricty demand.

Hi,

???  By "conservative" do you mean a free market  rather than a
regulated monolopy? If so, then your statement makes no sense, In a
free (unregulated) market "California" would not set the price, the
utilities would.  And would set it high enough to cover the cost of 
production.


>Whenever you have government setting prices that is LIBERAL politics
>(i.e. the retail caps).  ...

Yes, as is the situation in California power today. And that is the reason 
for the blackouts.  

>...The conservatives don't want the government
>to regulate prices, up or down, and that is conservative politics.

Yes.

In an unregulated market there would not be blackouts, just high rates 
during peak demand times. Individuals and companies would decide if they 
wanted to pay the rate or black themselves out.
.....


>...  What you fail to understand is that there is a world of
>difference between true cost and market demand.  

I think you mean a difference between "true cost" and market price. Or 
between true cost and apparent cost.

>......What the
>enviromentalists like me want is for prices to reflect the true cost
>of engery, including the environmental cost.  

Me too.  Not likely to happen in a government regulated monopoly.


>....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.

Recall that it was Liberals during the Carter administration that started 
the "deregulation" movement. But "Liberals" and "Conservatives" frequently 
reverse positions.  I remember when it was the Liberal president (JFK) who 
wanted to cut tax rates (more than W wants to now) AND increase military 
spending to close that "missle gap".  And it was the leader of the 
Conservative Republicans (Barry Goldwater) who opposed the tax cut as 
"irresponsible".

Similar reversals on tariffs and trade and technology. For some examples, 
see:

http://www.geocities.com/capitolhill/4834/13.txt



>.... The
>retail price caps protect the poor.  

???? Price caps "protect" those who use the most.  If you want to "protect 
the poor" then lifeline rates are the way:  low rate on the first few 
hundred kw-hrs per month, then higher rates for for greater use.


>....However, so long as the
>deregulated wholesal market does NOT reflect true cost, 

That depends on how external costs are treated. As the USSR should have 
shown you, government run utilities can also hide external costs and 
create more problems with the environment than private utilities.  If
toxic emissions are taxed, external costs can be covered by the price
charged.

If CO2 emissions were taxed to cover the harm done (and who can say how 
much the tax should be?) it would be a big boon to hydro, wind, nuclear, 
and solar relative to coal, oil, or natural gas.


>....we will have a
>social welfare subsidy of the federal tit-sucking, commie industries
>and the public at large.  

A government regulated monopoly has a profit margin fixed by law. There is 
no incentive for improved efficiency or doing things in a better way. 
Added costs can just be added to the price charged, and the managers need 
not fear any competition.  Which is why the Liberal in the late 1970's
started deregulation.

>
>A true free market and cost internalization would prohibit such
>tit-sucking.  

Yes.

>.... (there
>is not now and never has been a shortage due to prohibitions on new
>plant construction or capital impovements imposed by
>environmentalists), 

??? So you say that even if power production had increased as fast os the 
population, there would still be a shortage?


>.....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 a regulated monopoly the profit and rate of return to the investor is
guaranteed by the government.  In a free market, the investment is money 
put at risk.


>....  They went into pockets of the
>profit-taking greedy rich .....

Those who invest in public utilities?  But you are claiming that they 
should have a profit without a risk?

>.... not some fat cat on the public dole.
>
>>Jon Noring

I think that describes the managers (and investors) in government 
regulated monopolies more than those in competitive markets.


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jim blair (jeblair@facstaff.wisc.edu) Madison Wisconsin
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