THE ROBERT W. WHITAKER ARCHIVE

CALIFORNIA GETS WHAT IT ASKED FOR | 2001-02-03

When the rolling blackouts hit California, all the regular media reported that the shortage of power in that state was due to "deregulation."

That story would have been the final word, I believe, had it not been for Fox Cable News Network. The Fox Cable News Network had conservative economists on who pointed out that so-called "deregulation" did not deregulate. It was what was NOT deregulated that caused the problem.

So the Associated Press article which appeared on America Online is not able to repeat the standard line that it was deregulation that did this to California. It said,

"But PG&E and the state's other major utility, Southern California Edison Co., have lost at least $10 billion because of soaring wholesale prices for electricity and because rate caps imposed under deregulation have prevented them from passing on those costs to customers."

Only a liberal could call that "deregulation!" Deregulation is letting prices go where they need to go, without regulation. So while the press says deregulation did it, it turns out that it was the new regulations imposed in the name of deregulation that did it.

Another thing has caused the power crisis in California. First, they fixed prices below the real level, which is a standard leftist trick. Second, the state's economy has growth vastly in the last decades of economic boom. But California has stopped all building of all new electric production facilities.

In power policy, the "environmentalist" portion of the liberal establishment rules California.

California fixed the prices and froze the supply. Liberals call that "deregulation." To a sane person, fixing prices and freezing the supply is the classic way to bring on an energy crisis.