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Arkansas escaped

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Arkansas escaped

A decade or so ago, ambitious and well-connected chiselers sold gullible and/or greedy legislators on the idea that deregulation of electricity would be good for people. Their pitch was that once freed from government oversight, suppliers of electricity would compete fiercely, driving down prices. They had no evidence to support this proposition, nor needed it. Lawmakers in Arkansas and elsewhere roared their approval. (Governor Mike Beebe, then a state senator, was one of them, we recall, though perhaps not roaring as loudly as some.) What deregulation brought was higher electric rates in the states that first adopted it, and disasters like the Enron collapse, devastating to employees and stockholders as well as consumers. After Enron, Arkansas legislators got cold feet, and rescinded their approval of deregulation before it could do serious harm in this state.

We're reminded of Arkansas's good fortune by a recent report on the effects of deregulation in the states still stuck with it. The consumer group Public Citizen found that the promised competition never materialized. Far from declining, power prices for households and businesses have soared, along with the profits of power companies. Retail electric prices are 49 percent higher in the deregulated states (California, Connecticut, Delaware, Maine, Maryland, Massachusetts, Montana, New Hampshire, New Jersey, New York, Rhode Island and Texas, as well as the District of Columbia) than in the 38 regulated states.

Prohibition was another great failure of public policy, but it arguably deserved to be described as “a noble experiment.” Not deregulation. It was ignoble from the beginning.

 

Reckless

Governor Beebe's call for further tax cuts even while vital programs like Medicaid are underfunded didn't strike us as highly responsible when he first made it, and it's getting scarier. Now the governor's posturing has moved Sen. Denny Altes of Fort Smith to put forward tax cuts of his own. It's always best not to provoke people like Altes, who, when aroused, see cause for state government to give aid to those who are least in need. The senator's tax proposals are old favorites of the industry and agri-business lobbies, granting them sales-tax exemptions for utilities, replacement parts, and other expensive what-not. While he's up, Altes also plans to reintroduce a bill, mercifully defeated last year, that would allow state agents to snoop in everybody's medicine cabinet and learn what prescription drugs we're all taking. This is offered as a component of the “war on drugs,” already grossly expensive, cruelly invasive of Americans' civil rights, and hugely unsuccessful. It's a war that needs ending, not expanding.

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