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Jewish World Review Feb. 1, 2001 / 9 Shevat, 5761

Ann Coulter

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Consumer Reports

This just in: Price controls cause shortages -- ANOTHER "Dog Bites Man" story has once again taken the American press corps by surprise.

California's electricity crisis is treated in the media as if it were some sort of natural disaster, like a hurricane. But the only fact of nature operating here is the hard-and-fast rule that whenever you come across a screw-up this big, you know the government is behind it.

The California Legislature created this problem about five years ago when it deregulated the wholesale market for electricity but fixed prices at the retail level, a policy that has made Cuba the happy, prosperous country that it is today.

Needless to say, eventually wholesale prices soared, but the utilities were prohibited from passing their increased costs onto consumers. Buy high, sell low! (Isn't that what they teach you in business school?) Since the California utilities are about to go bankrupt on the governmentally imposed "Buy high, sell low" strategy, no one will sell them electricity. So now there's no electricity in California -- but at least it's cheap!

You are probably wondering how it is that multibillion-dollar corporations with highly paid business school graduates populating their corporate risk-management departments could have failed to anticipate price fluctuations in the electricity market and entered into long-term contracts.

The answer is: A screw-up this big could only be caused by the government. California actually prohibited utilities from entering into long-term contracts. (The California Legislature came up with many other idiotic ways to mess up the electricity market; this is just the highlight reel.) If California utilities had relied on evil, blood-sucking hedge-fund managers rather than the California Centralized Committee to Fix Prices and Plan Markets, they'd have plenty of electricity now.

To summarize: The California Legislature fixed prices at which electricity could be sold to consumers and prohibited utilities from entering into long-term contracts to hedge the electricity market, leading like night into day to wild fluctuations in the price of electricity, but the utilities couldn't recoup their costs because the government had fixed prices in the retail market.

In the mainstream media, this is known as "deregulation."

In point of fact, the California electricity crisis resulted from government policies that are the opposite of deregulation, the antimatter of deregulation, as antithetical to deregulation as the rule of law is to Bill Clinton.

If the California Legislature had helped the Soviet Union with its transition from communism to a market economy, they'd be experiencing their 84th year of "bad weather" wrecking the crops again this year. Instead, only California utilities had a "bad weather" year. The utilities signed on to what was a politically attractive package at the time, and now it turns out they stepped on a rake and the rake has hit them in face. Dog bites man!

It is remarkable that it is this difficult for so many people to grasp the concept of a free market at this point in history. It's never going to get any easier than this.

Only a little over a decade ago the centralized planning of the Eastern Bloc was exposed as having created a squalid, poverty-stricken abyss. Meanwhile, corrupt running-dog lackeys of the capitalist system managed to produce a society in which the poorest Americans have refrigerators, televisions, VCRs, telephones, radios and 67 varieties of orange juice.

But no matter how many good products at low prices capitalism manages to provide, and no matter how spectacular the failures of government intervention are, some segment of the population continually lists toward distributing goods and services on the old Soviet bread-distribution model.

Evidently, the free market is an incredibly counterintuitive concept. People have to be constantly reminded how excellent the market is at distributing goods and services.

The basic idea of a free market is that the consumer and seller enter directly into mutually beneficial transactions. The consumer has the best information about what he wants and how much he is willing to pay; the seller has the best information about what he can provide and what it will cost him. That's how we end up with great stuff like reasonably priced Chia pets in the shape of Jerry Garcia's head.

The government bureaucrats rallying cry is: "Insert a middleman!" They simply cannot shake the conviction that they are in possession of the millions of constantly changing pieces of information that the market processes continually and effortlessly. If we ever let these bureaucrats run free, stores everywhere would run with the smooth Austrian precision of the Department of Motor Vehicles.

Naturally, the California government's solution to a problem created by the government is: more government! California voters ought to say what the Democratic Party is now gently trying to convey to Bill Clinton -- thanks, but you've already done enough.

JWR contributor Ann Coulter is the author of High Crimes and Misdemeanors: The Case Against Bill Clinton. You may visit the Ann Coulter Fan Club by clicking here.


01/25/01: People United for Swindles and Hucksterism
01/18/01: Ashcroft and the blowhard discuss desegregation
01/04/01: Liberal pimps for Clintonism
01/02/01: Kwanzaa: Holiday from the FBI
12/28/00: If Americans support abortion, let's vote
12/26/00: Gore, him and her
12/21/00: Channeling Jackie O
12/14/00: My Court is bigger than your Court
12/11/00: HANG IN THERE, AL!
12/07/00: National Lampoon's Florida Supreme Court Vacation
12/04/00: It's past time for GOPers to quit being good at losing
11/30/00: Things only a Dem will say with a straight face
11/27/00: Certify the electors, then the judges
11/23/00: Kangaroo coup
11/20/00: This is what the Electoral College is supposed to prevent
11/16/00: The liar next time
11/09/00: JUST GO!
11/06/00: Hail Mary past
11/02/00: As the nose grows: The scripture according to Gore
10/30/00: Clinton sure can pick 'em
10/26/00: Gore's 'Nam flashbacks
10/23/00: Courting George Orwell
10/20/00: The three faces of Al
10/17/00: Must Christian conservatives be fascists?
10/13/00: Oil good; Dems bad
10/10/00: Al Gore: Serial fibber
10/06/00: Sigh of the crook
10/03/00: So who's the 'dumb guy' now?
09/29/00: Don't do drug legalization
09/26/00: I'd burn down my neighbor's house
09/22/00: Democrats worship the money shot
09/19/00: Other film footage we'd like to see
09/15/00: Bush can name the **^%*
09/12/00: The Supreme Court ratchet
09/08/00: Our mistake -- keep polluting
09/05/00: Bubba protects and serves
09/01/00: AlGore's 'going out of business!' tax plan
08/29/00: Bush's compassionate conservatism
08/25/00: Space alien tells funny jokes in bathtub
08/22/00: Dems view world only in black and white, not in color
08/18/00: Another Damascus Road conversion
08/15/00: The viagra cotillion
08/11/00: The hand-wringing Hamlet from Hartford
08/07/00: The Democratic party's white face
08/04/00: Hillary's potty mouth
08/01/00: The hole in the story
07/28/00: Cheney's detractors can't get their story straight
07/25/00: AlGore: Elmer Blandry
07/21/00: The tyranny of non-objectivity
07/18/00: The state's religion
07/14/00: Reform it back
07/11/00: Keating for veep
07/07/00: Gore invented 'Clueless'
07/04/00: The stupidity litmus test
06/30/00: O.J. was 'proved innocent' too
06/27/00: The last guys 'proved innocent'
06/23/00: Serious Republican candidates don't get serious press
06/19/00: They weren't overzealous this time
06/16/00: Evolution of the strumpet
06/13/00: Actual journalistic malpractice
06/09/00: I did not have sexual
relations with that ... man!
06/06/00: IRS turns Bubba's screw
05/30/00: Too corrupt to be an Arkansas lawyer
05/26/00: Choose liberalism
05/24/00: Violence against coherence
05/22/00: Developmentally disabled Republicans
05/16/00: For womb the bell tolls
05/12/00: Asylum from Georgetown
05/10/00: The truth is out there, even for the clueless
05/08/00: Barbie is a liberal Democrat
05/02/00: Moving the goalpost
04/28/00: The bastardization of justice
04/25/00: How Monica Lewinsky saved the constitution
04/24/00: It's sunny today, so we need gun control
04/19/00: No shadow of a doubt -- liberal women are worthless
04/14/00: It takes a Communist dictator to raise a child
04/11/00: The verdict is in on Hillary
04/07/00: Vast Concoctions III
04/04/00: 'Horrifying' free speech in New York
03/31/00: Check-Off Box For Pimp Suits
03/28/00: All the news that fits -- we print!
03/24/00: Net losses all around
03/20/00: To protect, serve --- and be spat on
03/16/00: Thank Heaven for the consigliere
03/13/00: Vast concoctions II
03/09/00: The bluebloods voted against you
03/07/00: The Tower of Babble
03/03/00: Vast concoction
03/02/00: Hillary's sartorial lies
02/28/00: You have to break a few eggs to make a joke
02/22/00: I've seen enough killing to support abortion
02/18/00: A liberal lynching
02/15/00: McCain and the flag
02/11/00: The Shakedown Express
02/08/00: To mock a mockingbird
02/05/00: Summing up Campaign 2000: 'Oh, puh-leeze!'
02/01/00: A Confederacy of Dunces
01/28/00: Dollar Bill's racist smear
01/24/00: How high is your freedom quotient?
01/21/00: Numismadness
01/18/00: How dare you attack my wife!
01/14/00: The Gore Buggernaut
01/10/00: The paradox of discrimination law

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