Ah, but we a Republican governor when the law took effect in 1998, so all the problems associated with the "deregulation" regulation were his fault. So were all the other bad things that happened in teh state between 1993 and 1998. Of course, everythind bad that has happened here from 2001 is the fault of a Republican President who likes to pick on California when he thinks we're not watching.

Assigning the blame for anything bad that happened in 1999 or 2000 might be a little trickier, but I'm sure the Davis apologists will think of something. Maybe it was just the market reacting to the fact that Saint Bill's tenure in the White House would soon be up.

and of course:
for the first time in decades our nations budget was balanced, the economy was booming and the people of the US saw real prosperity while.....Bill Clinton was president.

- thats just to counter the countless arguments we have all read that Clinton's economic prosperity should be attributed to Reagans years as president(!!???!?). You can't be selective when arguing the accomplishments of a president. A president takes responsibilty for everything that hapens WHEN HE IS IN OFFICE.

Three Homes Scheer? Is that anything like Two Sheds Jackson from Monty Python?

Scheer is wrong again -

"But the California power crisis is not an example of what happens when businessmen are running important industries. It's a story of what happens when politicians try to manage competition and impose their vision of a market.

If "deregulation" means less - not more - political control over an industry, then the California electricity industry has not been "deregulated."

First, the state forced the electricity companies to sell their power plants to independent investors and become power distributors.

Second, the state assumed total day-to-day control of the utilities' power grid to make sure they couldn't abuse their market power.

Third, the state required new owners of the divested power plants to sell their juice to a state-managed "power pool." The price of that power is set by a daily spot market run by - you guessed it - the state. Electricity companies that wanted to compete for your business had to buy their electricity from this pool, and the price charged them was equal to the highest price received by any electricity generator in the daily state-managed spot market.

Fourth, regardless of what they pay for power in the wholesale market, no company can charge a consumer more than 6.5 cents per kilowatt hour. That price can't change until the company has paid off its share of the bailout the state gave the electricity companies in order to accept this new regulatory scheme.

Now, what kind of "deregulation" imposes rigid government dictates on how industries should organize themselves? What sort of deregulation keeps fixed prices on retail providers? What kind of "deregulation" requires retailers to buy power through a state-run central exchange? And what brand of "deregulation" forbids retailers from buying electricity more than one day ahead?

Real deregulation would have meant turning the old power companies loose to build what they want, charge what they want, and run the grid as they wished while simultaneously decriminalizing competition and removing barriers to market entry. State regulators, however, went in the opposite direction.

If this is the portrait of a free market, then it's a portrait painted by Salvador Dali, not Adam Smith.

But is this new regulatory regime the cause of the fivefold increase in California electricity costs? Hardly. While it did make things worse, the primary culprit is the high price of natural gas. Since November, the spot price of natural gas in Southern California has risen 600 percent over the 1998-99 average. And because 90 percent of the marginal cost of natural gas-fired electricity is fuel cost, the marginal cost of electricity would have to spike from 3 cents per kilowatt hour to above 15 cents per kilowatt hour to cover costs. That is what's happened at the wholesale level.

The bottom line: Because the state is so heavily reliant upon natural gas during periods of peak demand, Californians would be facing the same unpleasant combination of high electricity prices and blackouts even if the old regulatory rules were still in place.

The situation, however, was made worse by California's long-term hostility to new power plants. Since 1996, electricity demand in California grew by 12 percent while supply grew by 1 percent. Every time you turned around over the past two decades California state regulators were discouraging new construction, arguing that renewable energy would pick up the slack, that "negawatts" - activist jargon for subsidized energy conservation - was preferable to "megawatts," that minimizing new air emissions was more important than generating new electricity, and in general facilitating the transformation of the NIMBY ("Not-In-My-Back-Yard") forces into a unified BANANA army ("Build-Absolutely-Nothing-Anywhere-Near-Anybody").

Gov. Davis' vow to do whatever it takes to build new generating capacity in California is a belated acknowledgment that the Naderites have held the state hostage for too long. But his threats to seize control of power plants and throw company managers in jail guarantees that few private investors will risk entering the market.

Decontrolling retail prices might save the utilities from bankruptcy. But the trajectory of wholesale electricity prices is a function of the trajectory of wholesale natural gas prices. Building new capacity will help, but only a bit. This is one "crisis" that politicians are going to have to ride out."

http://www.cato.org/dailys/01-17-01.html

hornsofthedevil,
Get a new calculator. The budget was not balanced under Clinton, they were using Social Security collections to finance spending.

" The budget was not balanced under Clinton, they were using Social Security collections to finance spending. "

fine. i'll buy that for a dollar.
you can't dispute the economy was immensely better and however much you (or I!) loathe slippery Bill, i'm willing to grit my teeth and ADMIT that he gets the credit for the economy that was booming while he was in office. you gotta call it as it lies both ways.

I'm of the opinion that Presidents get too much credit when the economy goes good and too much criticism when it goes bad. Also, what effect the President does have on the US economy has is delayed because of its huge size (sort of like turning the wheel of a big ship (the Titanic?))

Thus, Bush I should get more credit than he did for the improving economy in 1993 and 1994, while Clinton should have some (small) responsiblity for the lagging economy in 2000 and 2001 (at least until 9/11). Bush II's marginal effect on the economy should be judged by 2003 (not so good) and 2004 (possibly better).

We'll see.

The prosperity that happened under Clinton's watch was no more his doing than Gore invented the internet. To his credit, President Clinton did one thing right- he realized that he lucked into the technological-economic revolution of his era, and restrained himself from taxing the sucker to death.

To be sure, any president could have sat and watched a surplus grow in the 90's, just as anybody could have picked a winning stock in that time. Doesn't it strike anyone as telling that the states also enjoyed surplusses in the 90's, and have suffered deficits- no matter if the governors were Republicans or Democrats?

The reality is that governments enjoyed windfalls generated as a percentage of the earnings made by Americans and spent right up to the level of the incoming revenues. When the level of earnings, hence revenues, fell, the spending commitments were unchanged, thus the deficits. If Al Gore had won the election, he'd be presiding over the same deficit as Bush.