Posted on 05/10/2002 3:51:38 PM PDT by snopercod
Energy: If California Gov. Gray Davis wins re-election, he’ll have the cowboys at Enron to thank. He has as much to answer for as the bankrupt energy company.
The headlines mush have made Davis’ day. "Memo Shows Enron Role in Hiking Prices," the top story in the Los Angles Times Tuesday said. "Enron Forced Up California Energy Prices, Documents Show," said the New York Times. "Bush Expects Vigorous Enron Probe," said The Associated Press.
So do we. If it can be shown that traders at Enron broke the law, they should be prosecuted fully and sentenced, If they illegally manipulated price3s to fatten company profits, heads should roll and California ratepayers should get refunds.
But will any agency - state or federal - look into those vaunted root caused of Enron’s apparent rogue behavior? Will any publicity-driven politician look at the system - yes, the society - that gave license to Enron’s machinations?
We doubt it.
Still, these questions need to be raised. Sure, everyone can scream about a company getting rich off the backs of the little guys. It’s a political motif that predates this nation’s founding.
But once enshrined in our founding documents was a deep skepticism of government power. An that seems to be missing here.
Two words: price controls.
Davis, like so many of his colleagues in the political (and economically ignorant) class, believed he could replace the actions of the marketplace with political dictates. It’s understandable politically. No officeholder wants to be associated with higher prices that tend to make voters cranky.
But political dictates - no matter how dressed up - don’t remove the imperatives of the marketplace.
It’s pretty simple, really. If the government forbids the making of profits, no business will operate. But if the government sets up a complex set of conditions under which companies could earn more money, wouldn’t a business try to exploit those conditions? Sure looks that way from here.
But not to Davis, who imposed the controls ion electricity prices. Not to the former staff director to Gov. Jerry Brown - Davis again - who put a halt to building new power plants in California even as its energy demand was rising faster than the national average. Not to the gubernatorial candidate Davis who got $100,000 from Enron. Not to the man who hired to Democrat attack dogs, Chris Lehane and Mark Fabiani, to demonize the energy industry.
Indeed, the sole moment of clarity Davis has shown in the whole California energy debacle was at the beginning of it. He said he could solve California’s energy shortages "in 15 minutes" by letting prices rise with demand. He didn’t, and the state has paid dearly.
Since then, he’s been looking for scapegoats to blame for his mismanagement. And Enron looks to have handed him one.
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On another thread this figure was $150,000!
Wonder which is correct.
Sorry, but I digress. Thanks for the post. The Investment Bus Daily is covering the Spin-Story by just laughing at it.
This is perhaps what other reporters should have done with a leaded press release so obviously put together by the Beltway Focus Group boys.
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