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Posted on 05/10/2002 5:55:29 AM PDT by PJ-Comix
An old joke: A farmer hears suspicious noises in his henhouse. "Who's there?" he calls out. "Nobody here but us chickens," replies the thief. Satisfied, the farmer goes back to bed.
That about sums up the behavior of federal regulators during California's electricity crisis. As I've been pointing out for more than a year, there is powerful circumstantial evidence that market manipulation played a key role in that crisis. Energy companies had the motive, the means and the opportunity to drive prices sky-high. And the crisis exhibited exactly the features you would expect if market manipulation was playing a big role: much of the state's generating capacity stood idle even as wholesale electricity prices went to 50 times normal levels.
Yet federal officials, from George W. Bush on down, offered California nothing but sermons on the virtues of the free market. The Federal Energy Regulatory Commission, which is supposed to police these things, found no evidence of foul play. Essentially, FERC asked energy companies whether they were manipulating the market. "Who, us?" they replied — and that was that. My favorite FERC study found that power companies had the ability to exercise "market power," and that it would have been profitable for them to do so, but that there was no evidence that they actually had. Those power executives must be swell guys!
The significance of the "smoking gun" Enron memos that came to light a few days ago is that they show exactly how swell those power executives really were. It turns out that Enron was indeed rigging the markets, with schemes that had smart-alecky nicknames like Fat Boy, Death Star and Get Shorty. Who said business isn't fun?
These memos came to light despite FERC's evident determination to see no evil. (We now know that the Bush administration in effect allowed Enron to choose the commission's members.) As one California official put it: "FERC is like a parent who doesn't want to believe their teenager has gone bad. The memos are significant because they are like finding a diary in the kid's backpack saying, `I robbed the liquor store.' "
The great risk now is that this will be treated purely as an Enron story. That's wrong; Enron was mainly a trader rather than a power producer, and as such could have only limited impact on electricity prices. The bigger story involves market manipulation by a number of producers. The circumstantial evidence for that manipulation is overwhelming. And if no smoking-gun memos have yet come to light, what do you expect? The Enron story shows just how easy it is for companies to cover their tracks, especially when the regulators are in their corner. If Enron hadn't lost its clout by going bankrupt, you can be sure that we would never have heard about Fat Boy and Death Star.
There is, however, one specific Enron angle here. I may have done Thomas White, secretary of the Army, an injustice. He ran Enron Energy Services, a division that — or so I thought — was mainly used as a way to generate phony profits, inflating Enron's stock price. But the division turns out to have had another role: to create phony energy transactions, inflating Enron's actual profits at the expense of the state of California. Why, exactly, is Mr. White still in office?
What really annoys me in this story, however, isn't the behavior of the energy companies. It isn't even the behavior of the Bush administration — though the administration not only stood idly by while California was robbed of around $30 billion, it also shamelessly exploited the state's misery to promote its own, utterly irrelevant energy plan. (Now, of course, that same energy plan is essential to the war on terrorism.)
No, what bothers me is the position taken by so many business and political commentators: that the California catastrophe says nothing about the risks of deregulation and the dangers of loving free markets too much. It was California's own fault, they say, for creating a "flawed" system — a wonderfully vague term that evades the necessity of explaining what really happened. In fact, the main flaw was that the system contained no safeguards against market-rigging.
And I'm sure that there will be a determined effort to ignore even these latest revelations. After all, why let facts get in the way of a beautiful, and politically convenient, theory?
So, Mr Krugman and NYT editors, where is the companion article reporting who all got the bribes from Enron? Oh, that's not news? Okay! Guess I'll go back to the Washington Times for real reporting.
The real story no democrat wants told is in the following newspaper article.
Sacramento BEE Story on the REAL SMOKING PRICE GAMING GUN
The Cal ISO engaged in clear anti-trust behavior by trying to create a conspiracy between the Cal ISO and Enron, for the purpose not of lowering power prices to California ratepayers, but for the purpose of harming companies in the Pacific Northwest! This article clearly shows that the Cal ISO under the control of Democratic Governor Gray Davis was guilty of criminal behavior aimed at harming the PNW.
HOW IS IT THAT WITH FACTS LIKE THIS, all the column-inches of newspaper are devoted to Enron? Isn't it news that California doesn't have "clean hands?" Isn't it news that California tried to harm NW companies? Ask Inslee, Cantwell Boxer, Feinstein, and others if the Justice Department should initiate criminal proceedings against CAL-ISO. Ask Inslee, Cantwell, Boxer, Feinstein and others if FERC should ban the Cal ISO from participating in energy markets?
There is a bigger story that neither reporters, nor the democratic spin masters, nor the NY Times have yet got around to telling.
The above is a slight modification of a letter I wrote to a local newspaper reporter challenging him to set the record straight. I encourage all Freepers to investigate this and then send similar letters to their newspaper reports covering this issue. If we all Freep the press, the truth might come out and the Democrats might find that they have Destroyed Gov Davis and the California Democratic party.
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Now one of the K butt boys for Enron is now writing this anti GW hit piece.
It is clear that the brain trust of the Rats, the NY Slimes, DC Compost and LA Slimes are working overtime to cover up for Benito Davis. They will try to use the Enron mess to smear GW and make the little Fascist Davis look like a hero.
Again I ask a simple question. Can anyone remember in the last 8-10 years any article published by the NY Slimes that ever told the truth re a political situation?
When does the NY Slimes lie to Americans to protect its fellow STD contaminated Rats in politics?
Much of the state's generating capacity stood idle even as wholesale electricity prices went to 50 times normal, because Grey-out Davis and his cronies had capped the price wholesalers could recieve.
Who's going to produce any product just so you can lose money on it?
Krugman is supposed to be an economist? Pretty convenient for him to forget this salient fact, eh?
HOWEVER, HE IS AN IDIOT. I GOT $117,000 FROM ENRON, AND HE ONLY GOT $50,000! I'M A MORE IMPORTANT CROOK ER GREAT PERSON!
California: Surprise culprit in energy price rigging (the state itself!)
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