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Sitting here in the "frozen wastes of Iowa" (to borrow from publicity for Donald Harstad's novel, Eleven Days), I cannot help but feel a dreary sense of deja vu. My sad mood, however, does not arise from being surrounded by thirty inches of snow. Nor does the fact that temperatures have yet to crawl above freezing explain my feelings. Not even the bass rumbles of our gas-powered furnace kicking in with distressing regularity fully clarify the mental sourness I can almost taste.
Last autumn, the media howled with self-righteous indignation over the hyperbolic rise in gasoline prices afflicting the Midwest. Cries of corporative collusion, price gouging, and artificial shortages rang throughout the airwaves. Politicians demanded investigations of suspected monopolistic and criminal behavior on the part of energy producers. Every candidate and his brother crowded before the omnipresent cameras and microphones with proposals to solve this dire "crisis."
In addition to the wailing and hang-wringing generated by gasoline prices, similar gnashing of teeth and rending of garments could be heard from the wilds of California. In that schizophrenic state, the focus of political and popular ire was mounting increases in the costs of supplying electricity. Prophecies of disaster for the state echoed those reverberating in the Heartland. Bitter denunciations of electric producers and suppliers spewed forth in tandem with nauseating condemnations of the "deregulation" that supposedly precipitated the unfortunate circumstances confronting electrical consumers.
This situation continues today. Suggestions to turn off holiday lights last month threatened the kiddies' enjoyment of Christmas. The bad ol' utilities, of course, had to be at fault. Then a major cold wave inundated nearly the entire country. When combined with burgeoning bills for natural gas, this convergence of bad news prompted the consumer "watchdogs" and the politicians to do what they always do: lie about their own culpability and then blame business for all the country's energy woes.
Hence my sense of being stuck in a vicious circle reminiscent of Bill Murray in "Groundhog Day." Unlike his character, however, I (and you) must actually suffer the negative consequences of what our national "leaders" have wrought. If you are weak of heart and fear that sticker shock might be your undoing when you slit open your energy bills, you need look no further than your state capital and the "compassionate" folks in Washington, D.C., for the culprits responsible for your demise.
Once upon a time, the citizens of the United States enjoyed a free market in electricity. According to James Damask of the Buckeye Institute, electric companies once had to compete for your business. New York City enjoyed six such enterprises in 1887. In 1907, forty-five such businesses serviced the Windy City of Chicago. Other cities also benefited from multiple energy providers.
Even though these businesses were not anointed by the State with monopoly powers, in the first decade of the Twentieth Century, production went from 4.5 million to 17.2 million megawatt hours. Simultaneously, prices dropped by more than a fourth. (One is reminded here of that detested "monopolist" John D. Rockefeller who garnered nearly ninety-percent of the oil market in the closing years of the Nineteenth Century yet still managed to bring down the price of a gallon of oil from 58 cents to 8 cents.)
Private companies instituted electric trolley service, based charges on metered usage rather than a fixed monthly price, standardized machinery, and, via the private National Board of Fire Underwriters, created safety procedures.
So, of course, with prices declining and supplies and the quality of service increasing, politicians did what they always relish doing: they regulated prices and determined who could -- and could not -- sell electricity.
(Unfortunately, much of this transformation occurred at the behest of industry lobbyists. This is a classic example of what Ayn Rand called the "aristocracy of pull," that class of businessmen who prefer to "succeed" in the market by calling upon the coercive power of the State to quell competition. [See Capitalism: The Unknown Ideal.] For a modern example of this type of "entrepreneur," examine the competitors who brought suit against Microsoft.)
Such government-mandated monopolies were, of course, far different from the monopolies of the so-called Robber Barrons that had been excoriated in the past. State created monopolies were "scientific" and boasted of "social consciences." (Sound familiar?) The natural result of such delightful intervention could only be rising costs and diminishing supplies.
The world appears doomed to reinvent the wheel and, as the old saying goes, to repeat the mistakes of the past.
In both the natural gas and electrical industries, it is the State -- in its infinite wisdom -- that has taken a system functioning just fine, thank you, and turned it into a relative nightmare. Equally certain is the point I made earlier: we, the consuming public, are and will bear the brunt of the mistakes made by power-grabbing politicians.
First, politicians pilfer half our income, to the point where we pay more in taxes than we do for food, shelter, and clothing. Next, they dabble in ignorant arrogance in fields best left to the experts. Because of their ill-advised mandates, regulations, and contradictory laws and policies, the costs of our basic necessities spiral out of sight. Since we have such diminished disposal incomes after Uncle Sam snatches his share, we struggle to make ends meet. The politicians then manipulate the situation, holding up the misery they helped foment as a rationale for an even greater loss of freedom as they castigate "big business." This fuels the cycle for another go-round until and unless a breath of sanity -- or the innate stubbornness of the American people (coupled with a simple desire for self-preservation) -- reverses, at least temporarily, our march into the long and frigid night of fascism.
The State sacrifices natural gas production on the altar of environmental correctness while concurrently encouraging us to become more dependent on natural gas for warming our homes and powering our industries. (For example, the Environmental Protection Agency has made it much more difficult for coal-fired plants to operate.)
Politicians investigate energy producers time and again, find no evidence of wrong-doing, and then conveniently forget these results when the next crunch in prices rolls around. In characteristic Orwellian hubris, California leaders "deregulated" their electrical industry by: forbidding any increases in prices; discouraging or preventing the construction of new power plants (especially -- horrors! -- nuclear plants); dictating under what terms a utility could buy electricity; and instituting price caps on what they could pay for electricity. Unsurprisingly, producers preferred to sell in other markets without price controls. The utilities -- surprise! -- and not the politicians received the stigma for the resultant shortfall in supply. Rather than helping people, the politicos merely made victims of both consumers and producers (the latter facing bankruptcy after being unable to recoup their costs).
Regardless of what the weather does in the short or long term, this unfortunate trend will only deteriorate unless corrective action is taken. For example, computers and other high-tech devices and industries have generated unexpected demands for electricity, both in the production of these tools and in their use. In their religious fervor for stasis, however, eco-fascists have largely curtailed the construction of new plants capable of keeping pace with the energy needs of home and business use. Despite -- or perhaps because of -- efforts to increase energy efficiency, even more power is now being consumed.
(Compare this to phone service: as prices per minute diminish, usage increases...and with it, overall costs, frequently to levels much greater than when long-distance charges were substantially higher.)
It is an economic truism that whenever the government intervenes in the free market -- for whatever reasons -- its ham-fisted efforts make things worse all round. Whether the product is electricity, natural gas, water, phone service, air travel, trucking, railroads, education, housing, or medical care, the State exacerbates the difficulties we face in supplying our wants and needs when it seeks to "help" us.
(Anyone remember the gasoline lines of not-so-long-ago that resulted from mandated rationing? How about the price controls imposed by Nixon? I'd rather pay two-dollars per gallon and be able to buy all the gas I need than to be so "protected" from high prices that I spend nothing on gasoline...because there is none to be had. [And let's not forget the unconscionable amount gasoline taxes contribute to the final price...])
Free enterprise is all we require to achieve lower prices and increased supplies. Why anyone would trade those obvious benefits and a higher standard of living for more suffering and heavier chains baffles me.
But then, I've been here before, too.
