Deregulation

There just isn't much in the news today--I'll keep digging. But Paul Krugman does have an excellent article on energy deregulation, and the recent troubles in California. It appears likely that at lease part of the problem was created by energy companies in order to drive prices up. Krugman discuess how tis may apply in the future.

"There is a theoretical case for a deregulated electricity market. But making such a market work, it's now clear, requires at least three preconditions. First, it requires a robust transmission system, yet the recent blackout made it clear that we have now created a system in which nobody has clear responsibility for the transmission network. Second, it needs a watchdog agency with adequate powers to prevent and punish price manipulation; FERC doesn't have those powers. Third, that watchdog must not be an agent of the very companies it's supposed to be policing. Enough said.

I admire the virtues of free markets as much as anyone. But given what we've seen so far, any state government that lets the federal government prod it into deregulation is just plain crazy."