Political Economics
Though it may sound boring on the surface, the uproar in Texas over a proposed private-equity purchase of energy giant TXU reveals the astounding ability of politicians to ignore what anyone who shops for groceries understands to be true about economics. Among the demands placed on TXU are that it:
1) Not build more energy plants (they're dirty, after all)
2) Lower its prices (cheap energy is listed somewhere in the Bill of Rights, isn't it?)
As if holding supply constant in the face of growing demand while expecting prices to fall isn't enough, legislators also expect the market to miraculously produce more competition, even as they threaten to add new regulatory authority in order to hamper the sale of TXU and strip its profits. In short, they want to eliminate the very profitability and predictability that is needed to entice new competitors into the market. And when all is said and done, they'll blame the resulting inefficient, unreliable monopoly on the vagaries of "deregulation."
Here's a simple political reform idea, since this is the season of reforms: how about we not let anyone hold public office unless he can pass a basic exam in economics? I know, I know, such a reform might leave us suddenly bereft of public officials. But really, is that such a bad thing?
Posted by Woodlief on March 01, 2007 at 08:12 AM