Tuesday, August 19, 2003

Krugman on Utility Deregulation

Paul Krugman writes on what he describes as "faith-based deregulation" in the NYT this morning and makes a number of the points I've made over the past few days, albeit much more eloquently:

In the past, electric power was considered a natural monopoly. It was and is impractical to have companies competing either to wire up homes and businesses, or to build long-distance transmission lines. Because effective competition was impossible, power companies were given local monopolies, and regulated to keep them from exploiting customers.

These regulated monopolies took responsibility for the whole system - transmission and distribution as well as generation. Then came the deregulation movement. It argued that a competitive market could be created in power generation (though not in transmission and distribution), and in much of the country utilities were forced to sell off their power plants.

And of course all over the country companies stopped spending money on intrastructure.

Four years ago, Paul Joskow of M.I.T. told FERC: "Proceeding on the assumption that, at the present time, 'the market' will provide needed network transmission enhancements is the road to ruin." And so it was.

Indeed it was. Read it.

Smithsonian Back-Patting

The Smithsonian Institution has finally summoned up enough courage to put the Boeing B-29 Superfortress Enola Gay on full display at its new facility at Dulles. Probably everyone is familiar with their earlier display of part of the aircraft several years ago which emphasized the suffering of the Japanese and American nastiness. Rrriiiight. Funnily enough, the Air Force Museum has displayed the other atomic bomber, the B-29 named Bockscar, for years with no sign of controversy at all.

However, the Smithsonian, having put the Enola Gay controversy behind them, is now pussy footing around the question of whether to display any wreckage from the Columbia. Fortunately, the actual curator, as opposed to the appointees in charge, seems to have a healthy and intelligent viewpoint, so we shall see.


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