Old and busted: Castro; new hotness: Chavez
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The Apocalyptic Teacup wrote:
Anyways, if you like debating about this kind of stuff I will be living in Dijon around July/August and travelling almost daily to Paris! Lucky France, lucky you!
Be interesting to see if you views change at all, keep your eyes open you might be surprised. I hope you enjoy your stay.
AndyKEnZ wrote:
Be interesting to see if you views change at all, keep your eyes open you might be surprised. I hope you enjoy your stay.
I'm very much looking forward to it. I love France. As for changing my views? Probably not. I've been in France before on extended stays. Socialism is crippling their infrastructure. I'm actually going there to work with INSEE/CREST[^] (their governmental statistical wing) on improving the situation.
Windows with no internet connection is safe, but that's not what Windows was built for.
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The Apocalyptic Teacup wrote:
him in live 5+ years under his "socialist" rule
What a load of cobblers, he's been democratically elected several times and been in power since 1999, the majority of people have seen their lot in life improve.
The Apocalyptic Teacup wrote:
he's headed straight for full-blown communism
Full-blown, wow!
AndyKEnZ wrote:
What a load of cobblers, he's been democratically elected several times and been in power since 1999, the majority of people have seen their lot in life improve.
That's why I put it in quotes.
AndyKEnZ wrote:
Full-blown, wow!
Pretty good exaggeration that one! :-D
Windows with no internet connection is safe, but that's not what Windows was built for.
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MP (2) wrote:
Here, electricity is nationalized since 40 years. We pay the lowest prices for electricity in North America, if not in the world. Also, we are a world leader for our expertise on hydro electricity. Nationalization is a good thing for us, because prior to that, private companies were sucking the power here, selling it to us high prices, while discounting it to Ontario.
Canada nationalized electricity to promote economic growth. Simultaneously, Canada also instituted a specialized "Marketing Board" in order to ensure democratic determination of electricity prices out of the fear that nationalization would lead to unfair price practices. In terms of nationalization of electricity, Canada is a special case. While we're at it, we should mention that Hydro Quebec expropriated the land of the James Bay aboriginals for their great hydro-dam project. But that's another debate... Furthermore, in 1997, the wholesale North American electricity markets were deregulated. Hydro-Quebec therefore currently participates on the wholesale market primarily by selling electricity to the U.S. What de-regulation means is that Quebec's natural monopoly no-longer exists in order to ensure fair and stable prices - the main reason behind the deregulation. In fact, in a study of the Quebec electricity market in (I believe 2004), the conclusion of the Canadian government report was that deregulation "made Hydro-Québec’s distribution network stronger and more reliable.". The reason for the low prices of electricity offered by Hydro Quebec is due to the manner in which it is generated (i.e. hydro) and not the fact that it is nationalized. Furthermore, you can't simply say that Canada has the "lowest prices for electricity in North America" because there are 3 separate tariffs for electricity: there is a rate for residential, commercial and industrial electricity prices. Additionally, most companies secure rates on the futures market in order to avoid large price swings. Thus, these companies may secure contracts for electricity to be delivered 3 months to 1 year in the future at some pre-arranged price and, as such, prices cannot be directly compared. "Lowest price for electricity" therefore becomes a function of how well a company has hedged their position in electricity futures. The bottom line is: Natural monopolies are never a healthy solution or alternative to the free-market.
MP (2)
The Apocalyptic Teacup wrote:
Ah, but that's where you're wrong. You see, I work for (arguably) the largest bank in the world pricing electricity derivative contracts (amongst others). So, I actually consult with governments on the subject of electricity. So no, I know more than governments. They seek my advice.
I stand corrected.
The Apocalyptic Teacup wrote:
The bottom line is: Natural monopolies are never a healthy solution or alternative to the free-market.
Healthy for who/what?
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The Apocalyptic Teacup wrote:
Ah, but that's where you're wrong. You see, I work for (arguably) the largest bank in the world pricing electricity derivative contracts (amongst others). So, I actually consult with governments on the subject of electricity. So no, I know more than governments. They seek my advice.
I stand corrected.
The Apocalyptic Teacup wrote:
The bottom line is: Natural monopolies are never a healthy solution or alternative to the free-market.
Healthy for who/what?
MP (2) wrote:
Healthy for who/what?
They are healthier for the consumer (which generally means cheaper prices). The problem (there are exceptions) in most cases is that under a monopoly (like a nationalized electrical system) prices are not fairly determined. They can easily be manipulated by the government. This means that it can actually be cheaper for consumers if more than one company is allowed to produce electricity. Competition keeps the price down. This was the main reason for the de-regulation of the North American electricity market. You see, under a nationalized system with a regulated market, it is not entirely clear who or how the price is set - there is no transparency and government run utility companies usually carry large deficits. Interestingly, under the previous nationalized electricity system Canada did not suffer from high prices because of the availability of hydro-electric generation. The main reason being that hydro is a cheaper way of generating electricity than coal or nuclear power, for example. Canada is a bit of a special case in that sense. But nationalization is not always "bad". Nationalization is good when there are huge problems - take Enron, for example. Enron was a case for nationalization during the restructuring. In this case, Enron was full of corruption and dishonesty and the only way to rescue the company was through massive restructuring and government intervention in the form of the Sarbanes-Oxley Act. The Washington Post wrote: "this was the most important corporate scandal of our lifetimes. It was one of the immediate causes of the Sarbanes-Oxley Act, the governance reforms of the New York Stock Exchange and NASD, and the most consequential reorientation of corporate behavior in living memory." Notably, this is a case of privatization gone horribly wrong. I think another practical example where nationalization was successful was the nationalization of the Canadian National Railway. It seems to be run quite efficiently at the moment. Anyways, in terms of the price level, the evidence is currently in favour of privatization of utilities. I will agree that in some cases nationalization works, but it is not necessarily the most efficient solution. EDIT: Sorry, I am wrong, CN Rail is actually a private company as of November 28, 1995. However to illustrate my point that nationalization as a bankruptcy bail-out is sometimes necessary, the Wikipedia entry states: Canadian
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K(arl) wrote:
Anyway, what's the problem? Nationalisation of electricity companies is a good thing.
Not really and this is for multiple good reasons, with one reason in particular. Price determination. Coase[^] treated this problem extensively and found that price determination is a real problem for nationalized utilities. Traditionally the market sets the fair price, but for a nationalized electricity company, who says what the fair price is? Government? What do they know about electricity pricing? He also found that nationalization leads to the institution carrying deliberate deficits (which is not a good thing). Consequently, consumers suffer on several fronts. 1. Prices are increased to finance the deficits of the institution. 2. Price discovery is not transparent and thus high prices are seldom justified. 3. There is no reason for ensuring efficiency which can lead to wastage and electricity shortages In short, public ownership is an irresponsible policy. Besides, when the government takes over the private institution, how are the private owners properly compensated? Who determines the fair market value of their electricity company? Under Chavez this will basically be an expropriation (he is socialist afterall) because socialist states believe that no compensation should be due, as it is property of the state anyways. No, nationalization is never good and is always an indication of government interference in the free market system and an attempt to seize control from private individuals. In short, it is a communist policy and since communism is a failed ideology, nationalization is too. -- modified at 6:47 Tuesday 9th January, 2007 Okay, I will admit that nationalization is good in very few cases - as in a government bailout of a severely distressed and important firm - i.e. firms responsible for public utilities and infrastructure, like electrical companies. But after the bail-out the firm should be reprivatized. In can also be good if there is too much interference by external companies who appropriate natural resources, but as far as I know neither of these situations is the case in Venezuela. Anyways, if you like debating about this kind of stuff I will be living in Dijon around July/August and travelling almost daily to Paris! Lucky Franc
The Apocalyptic Teacup wrote:
Traditionally the market sets the fair price
'Fair' price? :laugh::laugh::laugh:.
The Apocalyptic Teacup wrote:
What do they know about electricity pricing?
The Apocalyptic Teacup wrote:
public ownership is an irresponsible policy.
Pure BS. It is the best way to ensure for any citizen an access to electric power at the same price whatever his/her location, in a big city or in some far countryside. Also, a State is not driven by profit so it won't sacrifice maintenance and safety measures to spare money: something most important with power plants, nuclear or not.
The Apocalyptic Teacup wrote:
when the government takes over the private institution, how are the private owners properly compensated
Legitimate question. Compensation has to be fair and be evaulated by independent instances.
The Apocalyptic Teacup wrote:
Under Chavez this will basically be an expropriation (he is socialist afterall) because socialist states believe that no compensation should be due, as it is property of the state anyways.
Wait and see.
The Apocalyptic Teacup wrote:
, nationalization is never good
Very false. For instance, in France, most of our electricity is made by nuclear power plants to avoid to be energitically dependent. Never private companies would have made that choice, nor have the means to implement such a strategy.
The Apocalyptic Teacup wrote:
as in a government bailout of a severely distressed and important firm - i.e. firms responsible for public utilities and infrastructure, like electrical companies.
That's a clear demonstration of the irresponsability and hypocrisy of the private sector: no goverrment intervention, unless we need money brought by taxes to compensate the mistakes we make. Citizen and consumers are fucked in both cases.
The Apocalyptic Teacup wrote:
f you like debating about this kind of stuff I will be living in Dijon around July/August and travelling almost daily to Paris!
And you are not affraid to travel to a communist country? ;-P -
The Apocalyptic Teacup
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The Apocalyptic Teacup wrote:
Traditionally the market sets the fair price
'Fair' price? :laugh::laugh::laugh:.
The Apocalyptic Teacup wrote:
What do they know about electricity pricing?
The Apocalyptic Teacup wrote:
public ownership is an irresponsible policy.
Pure BS. It is the best way to ensure for any citizen an access to electric power at the same price whatever his/her location, in a big city or in some far countryside. Also, a State is not driven by profit so it won't sacrifice maintenance and safety measures to spare money: something most important with power plants, nuclear or not.
The Apocalyptic Teacup wrote:
when the government takes over the private institution, how are the private owners properly compensated
Legitimate question. Compensation has to be fair and be evaulated by independent instances.
The Apocalyptic Teacup wrote:
Under Chavez this will basically be an expropriation (he is socialist afterall) because socialist states believe that no compensation should be due, as it is property of the state anyways.
Wait and see.
The Apocalyptic Teacup wrote:
, nationalization is never good
Very false. For instance, in France, most of our electricity is made by nuclear power plants to avoid to be energitically dependent. Never private companies would have made that choice, nor have the means to implement such a strategy.
The Apocalyptic Teacup wrote:
as in a government bailout of a severely distressed and important firm - i.e. firms responsible for public utilities and infrastructure, like electrical companies.
That's a clear demonstration of the irresponsability and hypocrisy of the private sector: no goverrment intervention, unless we need money brought by taxes to compensate the mistakes we make. Citizen and consumers are fucked in both cases.
The Apocalyptic Teacup wrote:
f you like debating about this kind of stuff I will be living in Dijon around July/August and travelling almost daily to Paris!
And you are not affraid to travel to a communist country? ;-P -
The Apocalyptic Teacup
K(arl) wrote:
'Fair' price?
Yes, a "fair price" because it is the market that determines the price and the participants in the market are those that buy electricity for themselves. What participant would want artificially high prices? Even if some large company were to bid prices up for whatever reason, the market would easily correct the mispricing. This is why electricity prices are mean-reverting.
K(arl) wrote:
Pure BS. It is the best way to ensure for any citizen an access to electric power at the same price whatever his/her location, in a big city or in some far countryside. Also, a State is not driven by profit so it won't sacrifice maintenance and safety measures to spare money: something most important with power plants, nuclear or not.
Yes, okay. I clarified my position in another post to MP(2). I agree, there are times when nationalization is good. (See other posts).
K(arl) wrote:
Legitimate question. Compensation has to be fair and be evaulated by independent instances.
Yes, this is a key point. Depending on how Chavez handles this, it will say alot about his government policy.
K(arl) wrote:
Very false. For instance, in France, most of our electricity is made by nuclear power plants to avoid to be energitically dependent. Never private companies would have made that choice, nor have the means to implement such a strategy.
Yes, I will agree - again, see my other posts.
K(arl) wrote:
That's a clear demonstration of the irresponsability and hypocrisy of the private sector: no goverrment intervention, unless we need money brought by taxes to compensate the mistakes we make. Citizen and consumers are f***ed in both cases.
I concede that you have a point - I addressed this in terms of Enron and the Sarbanes-Oxley Act that resulted from the Enron fallout. The effect was to tighten corporate reporting regulations.
K(arl) wrote:
And you are not affraid to travel to a communist country?
No. I love France! I like the architecture, food, wine and people. I'll be there working with INSEE[
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The Apocalyptic Teacup wrote:
Traditionally the market sets the fair price
'Fair' price? :laugh::laugh::laugh:.
The Apocalyptic Teacup wrote:
What do they know about electricity pricing?
The Apocalyptic Teacup wrote:
public ownership is an irresponsible policy.
Pure BS. It is the best way to ensure for any citizen an access to electric power at the same price whatever his/her location, in a big city or in some far countryside. Also, a State is not driven by profit so it won't sacrifice maintenance and safety measures to spare money: something most important with power plants, nuclear or not.
The Apocalyptic Teacup wrote:
when the government takes over the private institution, how are the private owners properly compensated
Legitimate question. Compensation has to be fair and be evaulated by independent instances.
The Apocalyptic Teacup wrote:
Under Chavez this will basically be an expropriation (he is socialist afterall) because socialist states believe that no compensation should be due, as it is property of the state anyways.
Wait and see.
The Apocalyptic Teacup wrote:
, nationalization is never good
Very false. For instance, in France, most of our electricity is made by nuclear power plants to avoid to be energitically dependent. Never private companies would have made that choice, nor have the means to implement such a strategy.
The Apocalyptic Teacup wrote:
as in a government bailout of a severely distressed and important firm - i.e. firms responsible for public utilities and infrastructure, like electrical companies.
That's a clear demonstration of the irresponsability and hypocrisy of the private sector: no goverrment intervention, unless we need money brought by taxes to compensate the mistakes we make. Citizen and consumers are fucked in both cases.
The Apocalyptic Teacup wrote:
f you like debating about this kind of stuff I will be living in Dijon around July/August and travelling almost daily to Paris!
And you are not affraid to travel to a communist country? ;-P -
The Apocalyptic Teacup
K(arl) wrote:
It is the best way to ensure for any citizen an access to electric power at the same price whatever his/her location, in a big city or in some far countryside.
Wrong, Karl. Look at Russia, still a lot of places without a regular electricity access.
K(arl) wrote:
it won't sacrifice maintenance and safety measures to spare money: something most important with power plants, nuclear or not.
Wrong again. Remember Chernobyl?
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I totally agree that Chavez is a despot in the making. His grip on the press is just a continuation of what he has been doing in the courts, constitution and congress. Also, my fear is that he's not alone. Many presidents in Latin America are eager to follow him in his road to a Banana Republic in a 21st century style. But I'd like to stress that dirty, corrupt and authoritarian "caudillos" is not the only face of Latin American politics. Although they are the only thing the world press talks about. We also have democratic and intelligent leaders trying to empower open institutions. That's the case at Chile, Uruguay and even Mexico. Even in my country, Brazil, the populist-nationalist demagogues are not the whole story. Not all apples are rotten. Actually, in this particular case, the healthy apples can work as an example and "contaminate" some sick apples with good influence.
'My country, right or wrong' is a thing no patriot would ever think of saying except in a desperate case. It is like saying 'My mother, drunk or sober.'
GK Chesterton -
AndyKEnZ wrote:
Be interesting to see if you views change at all, keep your eyes open you might be surprised. I hope you enjoy your stay.
I'm very much looking forward to it. I love France. As for changing my views? Probably not. I've been in France before on extended stays. Socialism is crippling their infrastructure. I'm actually going there to work with INSEE/CREST[^] (their governmental statistical wing) on improving the situation.
Windows with no internet connection is safe, but that's not what Windows was built for.
The Apocalyptic Teacup wrote:
Socialism is crippling their infrastructure
Good phrase doesn't mean much though, do you mean that many people are using the transport systems? I'm sure a good dose of statistics will sort things out. French transport has a good reputation throughout Europe. At the other end of the scale we have the UK train network which is a bit of an overpriced laugh.
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The author of the article has really
Alvaro Mendez wrote:
a problem with Chavez
http://www.google.com/search?q=JENS+ERIK+GOULD%2FCARACAS
Alvaro Mendez wrote:
"democratically elected" despot
Why? Even the opposition concealed its defeat. Anyway, what's the problem? Nationalisation of electricity companies is a good thing.
The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread
K(arl) wrote:
The author of the article has really a problem with Chavez
Yep, and so does anyone who's enjoyed all the wonderful benefits of communist oppression.
K(arl) wrote:
Why? Even the opposition concealed its defeat.
From the article: Chavez has begun fashioning a single Socialist party out of the many that support him, sparking fears among his critics that a one-party state is on the horizon. The government also promises to do away with the autonomy of the Central Bank and to regulate earnings for private companies. What's more, the president has once again shuffled his cabinet, giving the pink slip to his vice president and interior minister. With nine interior ministers in the last eight years and three housing ministers in as many years, critics say this strategy is aimed at preventing ministers from upstaging the president and also robs them of enough time to attack festering domestic problems like rampant crime and housing shortages. He's becoming democratically elected dictator. How much do you want to bet that he'll win the next election, and the one after that, and the one after that? No one will dare to oppose him, especially after years of securing even more control and brainwashing even more people (especially children). If you recall, Saddam won his last election with 99% of the vote. Chavez is headed in the same direction... but hey, it's democracy so it must be OK, right? X|
K(arl) wrote:
Anyway, what's the problem? Nationalisation of electricity companies is a good thing.
So because he does one good thing, the rest is also good? Is nationalization of the media a good thing? Is it OK for Chavez to brutally silence anyone who opposes him?
A casual stroll through the lunatic asylum shows that faith does not prove anything. - Friedrich Nietzsche
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The Apocalyptic Teacup wrote:
Socialism is crippling their infrastructure
Good phrase doesn't mean much though, do you mean that many people are using the transport systems? I'm sure a good dose of statistics will sort things out. French transport has a good reputation throughout Europe. At the other end of the scale we have the UK train network which is a bit of an overpriced laugh.
I was referring more to their public institutions like universities, etc... They are under-funded, using out-dated equipment and the buildings are in disrepair. This is generally the case for most things. Their infrastructure needs upgrading, that's all I meant. But whatever, I still love France - that's why I'm going there - to help out!
Windows with no internet connection is safe, but that's not what Windows was built for.
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The Apocalyptic Teacup wrote:
Socialism is crippling their infrastructure
Good phrase doesn't mean much though, do you mean that many people are using the transport systems? I'm sure a good dose of statistics will sort things out. French transport has a good reputation throughout Europe. At the other end of the scale we have the UK train network which is a bit of an overpriced laugh.
AndyKEnZ wrote:
UK train network which is a bit of an overpriced laugh
And is subjected to even more central government intervention than before the botched privatisation. The UK situation embodies the worst of both possible worlds.
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K(arl) wrote:
Anyway, what's the problem? Nationalisation of electricity companies is a good thing.
Not really and this is for multiple good reasons, with one reason in particular. Price determination. Coase[^] treated this problem extensively and found that price determination is a real problem for nationalized utilities. Traditionally the market sets the fair price, but for a nationalized electricity company, who says what the fair price is? Government? What do they know about electricity pricing? He also found that nationalization leads to the institution carrying deliberate deficits (which is not a good thing). Consequently, consumers suffer on several fronts. 1. Prices are increased to finance the deficits of the institution. 2. Price discovery is not transparent and thus high prices are seldom justified. 3. There is no reason for ensuring efficiency which can lead to wastage and electricity shortages In short, public ownership is an irresponsible policy. Besides, when the government takes over the private institution, how are the private owners properly compensated? Who determines the fair market value of their electricity company? Under Chavez this will basically be an expropriation (he is socialist afterall) because socialist states believe that no compensation should be due, as it is property of the state anyways. No, nationalization is never good and is always an indication of government interference in the free market system and an attempt to seize control from private individuals. In short, it is a communist policy and since communism is a failed ideology, nationalization is too. -- modified at 6:47 Tuesday 9th January, 2007 Okay, I will admit that nationalization is good in very few cases - as in a government bailout of a severely distressed and important firm - i.e. firms responsible for public utilities and infrastructure, like electrical companies. But after the bail-out the firm should be reprivatized. In can also be good if there is too much interference by external companies who appropriate natural resources, but as far as I know neither of these situations is the case in Venezuela. Anyways, if you like debating about this kind of stuff I will be living in Dijon around July/August and travelling almost daily to Paris! Lucky Franc
The Apocalyptic Teacup wrote:
Not really and this is for multiple good reasons, with one reason in particular. Price determination.
The Apocalyptic Teacup wrote:
Okay, I will admit that nationalization is good in very few cases - as in a government bailout of a severely distressed and important firm
You were right the first time. Don't hedge. Why was the utility in a bad state to begin with? Mismanagement? A bailout won't remedy that. Charging less than it costs to generate the power? A bailout won't remedy that either. When legislatures artificially depress the price of electricity (like here in Ontario) with subsidies, it just means some other taxpayer has to make up the difference. Some taxpayer who didn't even use that electricity has to pay for the difference between the cost to generate and the price charged. That's the real crime here. This is one of those rare situations when free-market people can stand side by side with the environmentalists. When prices are artificially lowered, it removes the incentive to conserve. Anyway, just my overly simplified view of the world. I look forward to the rebuttals from the "profits bad, government good" crowd... Share and enjoy. Sean
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K(arl) wrote:
It is the best way to ensure for any citizen an access to electric power at the same price whatever his/her location, in a big city or in some far countryside.
Wrong, Karl. Look at Russia, still a lot of places without a regular electricity access.
K(arl) wrote:
it won't sacrifice maintenance and safety measures to spare money: something most important with power plants, nuclear or not.
Wrong again. Remember Chernobyl?
Without mentioning the fact that Russia s the biggest country of the World with extreme climatic and geographic condition, the main point is that the tsarist state then the soviet state never cared about their citizens.
Igor Vigdorchik wrote:
Chernobyl
Same comment.
The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread
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Without mentioning the fact that Russia s the biggest country of the World with extreme climatic and geographic condition, the main point is that the tsarist state then the soviet state never cared about their citizens.
Igor Vigdorchik wrote:
Chernobyl
Same comment.
The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread
K(arl) wrote:
Without mentioning the fact that Russia s the biggest country of the World with extreme climatic and geographic condition, the main point is that the tsarist state then the soviet state never cared about their citizens.
So....ummmmm...Socialism "cares"? :~
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The Apocalyptic Teacup wrote:
Not really and this is for multiple good reasons, with one reason in particular. Price determination.
The Apocalyptic Teacup wrote:
Okay, I will admit that nationalization is good in very few cases - as in a government bailout of a severely distressed and important firm
You were right the first time. Don't hedge. Why was the utility in a bad state to begin with? Mismanagement? A bailout won't remedy that. Charging less than it costs to generate the power? A bailout won't remedy that either. When legislatures artificially depress the price of electricity (like here in Ontario) with subsidies, it just means some other taxpayer has to make up the difference. Some taxpayer who didn't even use that electricity has to pay for the difference between the cost to generate and the price charged. That's the real crime here. This is one of those rare situations when free-market people can stand side by side with the environmentalists. When prices are artificially lowered, it removes the incentive to conserve. Anyway, just my overly simplified view of the world. I look forward to the rebuttals from the "profits bad, government good" crowd... Share and enjoy. Sean
Sean Michael Murphy wrote:
You were right the first time. Don't hedge.
Heh. :-D
Sean Michael Murphy wrote:
Why was the utility in a bad state to begin with? Mismanagement? A bailout won't remedy that. Charging less than it costs to generate the power? A bailout won't remedy that either. When legislatures artificially depress the price of electricity (like here in Ontario) with subsidies, it just means some other taxpayer has to make up the difference. Some taxpayer who didn't even use that electricity has to pay for the difference between the cost to generate and the price charged. That's the real crime here. This is one of those rare situations when free-market people can stand side by side with the environmentalists. When prices are artificially lowered, it removes the incentive to conserve. Anyway, just my overly simplified view of the world. I look forward to the rebuttals from the "profits bad, government good" crowd...
I started to write something different but then I changed my mind. I was curious as to what happened to electricity retail prices during Enron's collapse and I couldn't find any evidence that they were "abnormal" or excessively volatile during the period of the collapse. I looked and looked and didn't find anything. It seems the collapse actually went unnoticed by the market. I am thus lead to conclude that the only government intervention that was worthwhile in the case of Enron was the Sarbanes Oxley Act and that, in fact, no intervention on the behalf of the US government was needed to maintain controls on electricity prices during the collapse. Of course SarbOx pertains to corporate transparency rather than electricity price regulation, so that act isn't relevant to the current discussion. In fact, it appears the market did quite well in managing the collapse of Enron and thus is a practical example of how it is not really necessary for the government to intervene. It's an interesting observation I hadn't thought about before. Thanks for adding to the discussion - quite valuable input especially regarding how subsidization just shifts the burden elsewhere.
Windows with no internet connection is safe, but that's not what Windows was built for.
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Sean Michael Murphy wrote:
You were right the first time. Don't hedge.
Heh. :-D
Sean Michael Murphy wrote:
Why was the utility in a bad state to begin with? Mismanagement? A bailout won't remedy that. Charging less than it costs to generate the power? A bailout won't remedy that either. When legislatures artificially depress the price of electricity (like here in Ontario) with subsidies, it just means some other taxpayer has to make up the difference. Some taxpayer who didn't even use that electricity has to pay for the difference between the cost to generate and the price charged. That's the real crime here. This is one of those rare situations when free-market people can stand side by side with the environmentalists. When prices are artificially lowered, it removes the incentive to conserve. Anyway, just my overly simplified view of the world. I look forward to the rebuttals from the "profits bad, government good" crowd...
I started to write something different but then I changed my mind. I was curious as to what happened to electricity retail prices during Enron's collapse and I couldn't find any evidence that they were "abnormal" or excessively volatile during the period of the collapse. I looked and looked and didn't find anything. It seems the collapse actually went unnoticed by the market. I am thus lead to conclude that the only government intervention that was worthwhile in the case of Enron was the Sarbanes Oxley Act and that, in fact, no intervention on the behalf of the US government was needed to maintain controls on electricity prices during the collapse. Of course SarbOx pertains to corporate transparency rather than electricity price regulation, so that act isn't relevant to the current discussion. In fact, it appears the market did quite well in managing the collapse of Enron and thus is a practical example of how it is not really necessary for the government to intervene. It's an interesting observation I hadn't thought about before. Thanks for adding to the discussion - quite valuable input especially regarding how subsidization just shifts the burden elsewhere.
Windows with no internet connection is safe, but that's not what Windows was built for.
The Apocalyptic Teacup wrote:
I am thus lead to conclude that the only government intervention that was worthwhile in the case of Enron was the Sarbanes Oxley Act
I thought that you had previously said you opposed Sarbox because you are a free market anarchist.
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The Apocalyptic Teacup wrote:
I am thus lead to conclude that the only government intervention that was worthwhile in the case of Enron was the Sarbanes Oxley Act
I thought that you had previously said you opposed Sarbox because you are a free market anarchist.
Red Stateler wrote:
I thought that you had previously said you opposed Sarbox because you are a free market anarchist.
Hmmm, don't recall that... Sarbox ensures transparency and honesty and makes the free market a much better place for all! If anything it improves market efficiency. It has the added benefit of weeding the chaff from the grain because it is costly for small firms to implement so they prefer to delist and go private. This helps reduce the dreaded "penny stock" phenomenon that I so dislike. All they do is add to volatility, reduce liquidity and increase fraud. While free-market anarchy revels in the fact that the capital markets should provide all possible services, we don't consider fraud a service.
Windows with no internet connection is safe, but that's not what Windows was built for.
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Red Stateler wrote:
I thought that you had previously said you opposed Sarbox because you are a free market anarchist.
Hmmm, don't recall that... Sarbox ensures transparency and honesty and makes the free market a much better place for all! If anything it improves market efficiency. It has the added benefit of weeding the chaff from the grain because it is costly for small firms to implement so they prefer to delist and go private. This helps reduce the dreaded "penny stock" phenomenon that I so dislike. All they do is add to volatility, reduce liquidity and increase fraud. While free-market anarchy revels in the fact that the capital markets should provide all possible services, we don't consider fraud a service.
Windows with no internet connection is safe, but that's not what Windows was built for.
The Apocalyptic Teacup wrote:
Hmmm, don't recall that...
To refresh your memory[^]. We had some discussion where I defended a degree of government regulation for the sake of financial transparency since it's necessary for a free market system to work. You had taken the position that government regulation of basically all sorts impedes financial progress...Basically that financial systems can take care of themselves without legal disclosure requirements.
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Sean Michael Murphy wrote:
You were right the first time. Don't hedge.
Heh. :-D
Sean Michael Murphy wrote:
Why was the utility in a bad state to begin with? Mismanagement? A bailout won't remedy that. Charging less than it costs to generate the power? A bailout won't remedy that either. When legislatures artificially depress the price of electricity (like here in Ontario) with subsidies, it just means some other taxpayer has to make up the difference. Some taxpayer who didn't even use that electricity has to pay for the difference between the cost to generate and the price charged. That's the real crime here. This is one of those rare situations when free-market people can stand side by side with the environmentalists. When prices are artificially lowered, it removes the incentive to conserve. Anyway, just my overly simplified view of the world. I look forward to the rebuttals from the "profits bad, government good" crowd...
I started to write something different but then I changed my mind. I was curious as to what happened to electricity retail prices during Enron's collapse and I couldn't find any evidence that they were "abnormal" or excessively volatile during the period of the collapse. I looked and looked and didn't find anything. It seems the collapse actually went unnoticed by the market. I am thus lead to conclude that the only government intervention that was worthwhile in the case of Enron was the Sarbanes Oxley Act and that, in fact, no intervention on the behalf of the US government was needed to maintain controls on electricity prices during the collapse. Of course SarbOx pertains to corporate transparency rather than electricity price regulation, so that act isn't relevant to the current discussion. In fact, it appears the market did quite well in managing the collapse of Enron and thus is a practical example of how it is not really necessary for the government to intervene. It's an interesting observation I hadn't thought about before. Thanks for adding to the discussion - quite valuable input especially regarding how subsidization just shifts the burden elsewhere.
Windows with no internet connection is safe, but that's not what Windows was built for.
Likely because Enron actually did not generate any electricity, it was just a broker.
Last modified: 35mins after originally posted --