June 14, 2001

1:04 PM

Energy woes continue in CA and now it looks like there may be a more serious push to consider price caps. But what if that doesn't happen? I've been thinking about this a lot lately and wondering what we as consumers can do. And I came up with this sort of crazy idea that I can't seem to shake: What if we all just stop paying our electric bills? Is this an appropriate form of protest? Would it be immoral? Would it be possible? And most importantly, would it make a difference?
posted by megnut (94 comments total)

What if we all just stop paying our electric bills? Is this an appropriate form of protest?

We could hold a certain amount in escrow....

Would it be immoral? Would it be possible?

The Friends Society thinks so! Although they were protesting the use of their money to finance a war. I don't know if protesting prices of commodities is similar, but I'm open to arguments.

And most importantly, would it make a difference?

Hmm...
posted by rschram at 1:32 PM on June 14, 2001

If we all did it, it would be effective. I don't think it's immoral, exactly, although I do suspect it to be illegal...you've contracted for a service, they've provided it, to not pay for it may be considered theft (granted, it isn't as if we had much choice as far as who was providing that service, but Utilities are like that) but if we all did it I suppose a case could be made for it being a civil disobiedience issue.

What I would like to see is a day where we all simply unplug everything. One day with the computers off, the tv unplugged, the fridge not cooling (it would be similar to blackout conditions...as long as you left it closed, it would take a while to thaw anything, although their might well be spoilage...you might consider buying a lot of ice the day before, and leaving it in the fridge) not drawing even parasitic power. If we did this one day a week, it would definitely be felt. Combined with non-payment, it could well be a very effective form of protest. (Not only will we not pay you, we won't even use your services, so that when the protest is over you still won't make as much money.)

Any other ideas?
posted by Ezrael at 1:33 PM on June 14, 2001

I just glanced at the article, and I found that this statement, “Democrats have pressed the agency for months to do more to control electricity costs in California, where a shortage of power plants and a flawed wholesale electricity market have led to high prices,” to be disputable in a variety of ways.

But, yes, if consumers are sickened by both the government’s flawed policies and the energy companies’ price gouging, the best way for you to fight back is to speak with what little (comparably) money you have. Truly, it may be the only action that has any resonance.

Getting people to do it, however, will take tireless organizing.
posted by capt.crackpipe at 1:37 PM on June 14, 2001

How about micro hydroelectric turbines in the sewers? Everyone has to flush.
posted by roboto at 1:39 PM on June 14, 2001

When all else fails go the guerilla route: spray paint over each meter, slash the tires on the company vans, make constant fake fallen wire reports, etc.

Or roll your own, get a few people together and get a nice natural gas powered generator. If you're going to get gouged at least get gouged by the monopoly of your choice. You can even use your old electrical circuit for backup.
posted by skallas at 1:44 PM on June 14, 2001

I'm not much of a guerilla at heart, so that type of action doesn't appeal to me. But simply not paying seems so, well, simple. Yet the potential impact could be dramatic if enough people join in. I received an email from someone who said it took PG&E a year to finally bill him for electric service he ordered, and then they've given him an additional year to pay for it all. So there's a possiblity of getting their systems into a snarl, which while perhaps not totally useful, could be fun.

The key to making it work would be getting a huge number of people to participate, but I figure that's where the web comes into it. We get a site up, spread the word, and see what happens. Would PG&E disconnect everyone? That would be crazy!
posted by megnut at 2:01 PM on June 14, 2001

There has been renewed interest in solar and wind generation - you can buy panels on EBay almost always. Thought about it myself; you rig them up to a battery array, charge, and when the lights go out, you are sitting pretty.

But as far as protesting, well, what exactly would we be protesting? High energy rates? They are governed by supply and demand, or at least a reasonable facsimile thereof (since we're talking about a monopoly); might as well protest the tides. Would we be protesting low supply? From what I've read, the CA legislature made it prohibitively costly (and unnecessary at the time) to build new plants. Lack of alternative energy sources? They've gone unneeded for years, and it will be natural for them to come back into favor when market conditions make it so.

I've seen little evidence that the power companies were doing much gouging - the rate hikes that created the price-cost gap were naturally occuring market conditions, ones that the consumers could have reacted to had they had the opportunity. But I've seen a lot of evidence that CA politicians, in a misguided effort to "protect" Californians (read: voters) from high energy prices (read: the law of supply and demand) ended up creating a faux crisis that, really, was an abortive attempt at centralized control over the energy industry by the government.

That said, my personal opinion is that we give nuclear another try. We've come a long way since Three Mile Island. I also think an eventual solution would be large space-borne solar arrays, which could then microwave power down to the surface. Very expensive, but when amortized over the time they could be in use (if protected from space debris effectively) literally hundreds of years.

The world needs power. There's no way around it. But the conservation-generation debate is moot: we need BOTH.
posted by UncleFes at 2:08 PM on June 14, 2001

I figured we'd protest the egregious increase in our bills. I think there's been some price gouging and this would be a way to combate it, without listening to everyone point fingers and lay the blame elsewhere. I may be totally wrong of course, I just wanted to hear what others thought about it.
posted by megnut at 2:17 PM on June 14, 2001

I'm in the midwest, and when we had that natural gas shortage, my power bill went through the roof. But I, like everyone else, reacted to it by conserving. Demand overall went down, supply came back into line with demand (time being what was needed) and now my power bills are about where I expect them to be. Hey, they're not great, but they're reasonable, and when they get out of line, I can react. The invisible hand at work.

What seemed like happened in CA was that the customers, subsidized by government fiat, had no real opportunity to react to market pressure and keep the prices in line. The consumer prices were kept artificially cheap, and so people bought and bought. Now, with the caps off, the prices seem to skyrocket, when really they're just normalizing to the point where they should be, and where they would have gotten to by gradations over time. I think that, once demand drops back to market-affected levels, with time the supplies will rise to meet it and prices will again normalize.

I think your way of combatting any gouging that may have been going on is right on. If the price is too high, buy less or buy alternatives. Just good solid capitalism at work.
posted by UncleFes at 2:35 PM on June 14, 2001

I don't know if protesting prices of commodities is similar, but I'm open to arguments.

In the case of taxes, you are protesting where your money is going. You're basically saying "I don't want what my money is purchasing".

A closer analogy would be putting rent in escrow because the landlord is violating your rental agreement or some housing/building code. Even this position doesn't hold up vis-a-vis electricity. The power companies are delivering what they're billing you for (they don't charge for electricity you don't take from them).

The problem is, it's just way too expensive. Ethically, though, Meg's proposition (stop paying electric bills) just doesn't fly. The basic position can be summed up as "if something is too expensive, you don't have to pay for it." That is very wrong. My mother would call it stealing (which she did when I stole this really cool Corgi car when I was 8 & tried to use a similar argument to justify it).

If something is too expensive, protest the price by not buying it. Turn of the air-conditioner and computer. Install solar panels. Power down the PC when you're not using it. Replace incandescent lights with florescent. If you believe that Government should play a roll - petition your representative's for price-caps or subsidies (personally, I don't agree with price-caps or subsidies, but it's an honorable and ethical response). If you feel there is price gouging - lower their profits by not buying their electricity. Using it and simply not paying for it, though, is stealing, no matter how "good" your intentions.
posted by dchase at 2:37 PM on June 14, 2001

I wish it were as simple as demand, but apparently (this is from Frontline) California ranks 49th in the US in power consumption. Only Rhode Island uses less. So Californians are conserving.
posted by megnut at 2:38 PM on June 14, 2001

> frail elderly people in hot apartments, sick
> people with electrically-operated medical
> equipment in their homes, etc etc. Some of
> them would certainly end up dying...

Isn't that what's happening anyway? We run this risk with every rolling blackout, and with a summer of looming continued blackouts, this risk is bound to increase. Businesses *are* leaving California right now because of this. And power producers are balking at selling power to CA.

> to not pay any of the bill whatsoever

Yeah, I thought about that. Actually when I wrote about it on my site, I added the thought that perhaps we should only pay part of it.
posted by megnut at 2:57 PM on June 14, 2001

If you want to rig up something to take care of your own power needs, that's one thing. But you can't then turn around and start selling your excess to your neighbors as Bob's Oak Street Power Company.

Actually, if you generate excess electricity & you are tied to the grid, the power company is required to credit you for any energy sent their way. Here's a cost savings calculator for solar cells in San Francisco. I don't know what happens if your send out more energy than you use, though.
posted by dchase at 3:04 PM on June 14, 2001

California ranks 49th in the US in power consumption.

I checked the link but couldn't find that stat. It certainly seems outrageous, since California is a huge, populous state, containing several large cities and home to a goodly bit of the computer industry. Rhode Island has like three counties.

This chart says that Cali is 4th lowest per per capita for Y2000. Which is pretty good. But New York is 3rd lowest, and I've seen pictures of Times Square, it's a well lit place. I'd like to compare per capita usage versus per capita production, that'd be where the difference would be, I think.

I'm pretty sure it's illegal where I live for private citizens to generate power and sell it, same as it is illegal to make beer and sell it. Generating for your own use is fine, I think, I've seen several homes in my town with solar arrays on their roofs.

Businesses *are* leaving California right now because of this. And power producers are balking at selling power to CA.

Businesses are going to act in their self-interest whenever possible. I think the power producers are worried about two things: one, that if they sell power to CA, it'll reduce their local supply and force them to raise prices locally, which basically dominoes the effects that CA is feeling, and two, they're worried that the Water Resource bonds that CA is using to pay will default and they'll never get their money.
posted by UncleFes at 3:07 PM on June 14, 2001

if you generate excess electricity & you are tied to the grid, the power company is required to credit you for any energy sent their way.

That is pretty dang cool. I may be taking a closer look here later.
posted by UncleFes at 3:13 PM on June 14, 2001

Two points:

One:
Several years back when I lived in calif, they said we needed more power pants. The environmentalist got all huffy about coal then gas and eventually nuclear. The energy crisis in calif is reflective of liberal politics "there has to be a better way, if not lets wait till there is one" attitude.

I say, they are getting what they asked for.


Two:
Deregulation isn't always good (yeah I know I am a conservative but..)
posted by crackheadmatt at 3:35 PM on June 14, 2001

The problem with the increase in rates is that its artifically manipulated. Supply and demand can work, when the amount of the supply is not manipulated. I blame a lot of this on Gray Davis for sitting on or twiddling his thumbs. His righteous indignation act seems a little hollow after the energy companies filled up his campaign coffers.

But Edison is dirty too, as they're crying pauper when the parent company is doing just fine and they are manipulating the market in concert with Enron.

My fear is that in the rush to get power plants online, the critical thinking that the environmentalists apply is being completely being ignored and the long term effect of the pollution may outstrip any power benefits.

I like the free market, but I feel with things that are essential to modern life (like electricity) they are best run by the government. It's expensive, and the service stinks, but the lights would stay on.
posted by owillis at 3:46 PM on June 14, 2001

I think we all need more power pants...
posted by ducktape at 3:57 PM on June 14, 2001

I like the free market, but I feel with things that are essential to modern life (like electricity) they are best run by the government.

Horror of horrors, but power deregulation and competition actually worked in the UK because it was accompanied by a strong regulatory framework, with decent safeguards to prevent spivvish suppliers to the public, or suffocating charges from the producers. There are still problems, particularly the direct marketing tactics used by salespeople on commission, who'll misrepresent the potential savings when you switch provider, but they're usually well-publicised and quickly stamped upon.

However, the Railtrack situation (as I've said a few times here) is a scary parallel: separating the responsibility for station and track management from train operation led to distorted funding; and now the privatised Railtrack is little more than a means of turning public subsidy into shareholder dividend, particularly as market confidence drives down the share price.

And to be honest, aaron's right: like the rail users in Britain, there's precious little that individual power consumers in CA -- or even grassroots groups of consumers -- can do to challenge a situation that's structurally unsound. It's the job of the legislators. But it renders the notion that "the market decides" risible, given that the consumer is frankly powerless (if you pardon the pun) to reward efficiency and good service, and punish the opposite.
posted by holgate at 4:12 PM on June 14, 2001

I'm not 100% certain on this, but I believe this is illegal in California, and many (most?) other states. If you want to rig up something to take care of your own power needs, that's one thing. But you can't then turn around and start selling your excess to your neighbors as Bob's Oak Street Power Company.

I never mentioned anything about selling, "getting people together" means sharing that bad-ass mofo generator not becoming your own little electric company. See you and Bob and Jane and Pete from upstairs all pitch in for the generator.

I don't know the gas vs. electric costs, but I'd much rather be plugged into the generator AND have the wire as a backup when Grandpa is connected to his respirator and the rolling blackouts come your way.

As someone has already mentioned the electric company has to buy whatever your'e generating if connected to the grid and the meter begins to spin backwards. It ain't retail prices but its something.

I think the black spray can idea would make a wonderful form of protest. Get a few thousand people doing that and you'll at least get some attention.
posted by skallas at 4:22 PM on June 14, 2001

june 21, 2001: roll your own blackout.

(and don't put too much stock in that anti-bush rhetoric, unless that really turns your crank.

if you want to do it to protest george w bush, go for it; if you want to protest high energy prices, do for that reason.

or, if like me, you just want to show that we *can* make a difference, if together we all take some small action, shut the lights off for one night.)
posted by rebeccablood at 5:48 PM on June 14, 2001

I think we all need more power pants©©©

Ducktape, I don't know if you were being flippant, but I believe that you are correct© Let's use an example: The Adam J© Lewis Center at Oberlin College©

This is a building that is designed to use as little energy as possible and at the same time, heat and cool the interior with geothermal wells, and generate energy through solar panels© As a result, the building is a net generator of energy, and sells its excess power back to the utility company©

To abuse an analogy, mainframe computers were phased out partly because they were inefficient compared to webs of desktops and small servers ¥forgive me, I'm not a natural geek¤© Presently, we rely on "mainframe" power plants for our energy, and in the process, waste is produced, either through electricity loss through power lines, oil spills, and obsolete power plants© In the long run, it makes more sense to have energy generated cleanly on the neighborhood level, and make our buildings not only energy efficient, but energy producers©
posted by Avogadro at 5:50 PM on June 14, 2001

Anyone think that a welfare state would emerge from not paying the bills? Fine, don't pay the bills and watch the power get shut off. Period. You think the energy companies would want to provide a service for nothing? Napster and music this is not. Second, a few well thought out articles are worth reading in order to get an understanding of those decisions regarding the mess in the first place. Here are just a few that I think highlight the problems in thinking more government intervention is the answer. I just wonder how long before the state government does seize the assets and takes control of everything. I think over in Russia they seized the news stations a few months back. Predictions before a state run nightmare comes to Cali?
posted by brent at 5:51 PM on June 14, 2001

One, the utilities were HEAVILY involved in writing the deregulation bill. If everything had been going the way the utilities planned it they'd be making money but they bet wrong. The thing is I've met a lot of people who advocate a lot of different changes in California but I never met anyone who wanted utility deregulation. Most people could have cared less. The few consumer groups that were involved in the deregulation process were against it. The politicians were not responding to some popular movement. They were responding to the utilities and the large power consumers. So they got together, deregulate a necessary industry, and the consumers get screwed.

Two, if you generate excess energy it's true that utilities are required to buy it and distribute it. The problem is that the utilities aren't paying the alternative providers right now. A few days ago PGE was ordered to pay 15% but that's after months of not paying a dime.
posted by rdr at 6:29 PM on June 14, 2001

When deregulation took place in California, as rdr posts, the industry was indeed "Heavily" involved in writing the bill. From what I understand it was in the interest of the utilities to not only help author and mold it, but should popular issue ever arise, silence any doubts by touting the successes of other industries being deregulated and hurry its passage through.

Yet unlike telecommunications, competition is mostly impossible on an electrical grid. There's either power there or there's not. Perhaps some residual electricity resides zapping around on those lines originating from a coal fired plant in WV. That company doesn't see a dime of the money. Nor should they, as the impossibility exists, of distinguishing the origin of one electron over another. Deregulating electricity producing utilities neccessarily creates a mandated monopoly.

I have a feeling this is precisely what the power companies knew as well, upon embarking upon the deregulation lobby. The same goes true with the health care industry in this country. People need the what the producers provide, economic and personal survival depend on them respectively. Grossly inflate the price of those goods with the government's kiss of approval and what you have is what we're dealing with now. Somebody's gonna make out like the bandits that they are. And that's the bandits themselves making out. California buys out the corps or they regulate once more and the people profit by having affordable energy. Either way though citizens will be invariably screwed. They either keep paying the monopolistic prices or they have to pony up the taxes to appease the utilities' stockholders. Our friend to the corporations, the US government, will see to that.

The bandits ride off into the particulate ridden sunset. (A beautiful hue though.)
posted by crasspastor at 7:11 PM on June 14, 2001

Here in North Hollywood my power is run by the LA Department of Water & Power - "The Government", if you will. They didn't deregulate, and our power will stay on.
posted by owillis at 8:37 PM on June 14, 2001

See how much better that is for the public?

Thanks owillis.
posted by crasspastor at 9:06 PM on June 14, 2001

The power situation in LA is not stable because it's "The Government." It's stable because the LADWP owns practically all its own generating facilities (much of which is hydroelectric, a matter of pure luck of location), and has no qualms about burning good old fashioned (and very cheap) coal for the majority of its needs.
posted by aaron at 10:28 PM on June 14, 2001

ummmm. . .okay. That does chip away at my pedestal a bit. I'm sticking with the beautiful red hue I guess, at least until it goes away.

Therefore, what shall we do here in the west? Obviously, deregulation in California has opened up a pandora's box of new problems. Not only there, but in regulated Washington too.

Some links for perusal:

San Francisco Chronicle energy coverage

KUOW energy crisis "Weekday" show where I got some of my info and subsequent links I include here. (Realmedia)

Seattle Times energy crisis coverage.

Thank you too aaron. . .though I'd doubt that the pollution from coal burning is the crux of your point, rather the "good old fashioned cheapness" of it.
posted by crasspastor at 11:09 PM on June 14, 2001

I like the free market, but I feel with things that are essential to modern life (like electricity) they are best run by the government.

Interesting. So I assume you live your life by this philosophy? I'm not sure where you're getting your clothes or food, but I bet the public housing is really nice.
posted by ljromanoff at 11:18 PM on June 14, 2001

Interesting. So I assume you live your life by this philosophy? I'm not sure where you're getting your clothes or food, but I bet the public housing is really nice.

By essential, I mean water and electricity (and food and some sort of shelter if the situation were to warrant it). If people can do on their own, all the better. But for these essentials, we're pretty screwed as a society if we can't assist our fellow man.

I believe in helping people out through the rough spots in their lives, an allowance not made in a "pure" free market.
posted by owillis at 11:38 PM on June 14, 2001

It's stable because the LADWP owns practically all its own generating.

Yes, I want them to own it. As opposed to Edison & Company taking the generators offline to fix the market prices. See?
posted by owillis at 11:40 PM on June 14, 2001

By essential, I mean water and electricity (and food and some sort of shelter if the situation were to warrant it). If people can do on their own, all the better. But for these essentials, we're pretty screwed as a society if we can't assist our fellow man.

I fail to see how food and shelter are less essential than electricity, but in any event, there are other ways to assist our fellow man than through the heavy hand of government control.

I believe in helping people out through the rough spots in their lives, an allowance not made in a "pure" free market.

A free market has no objection to helping people out through the rough spots in their lives. There is no 'capitalist law' that says don't help people. In fact, the wealth generated by capitalism has helped more people out through the rough spots in their lives than any other economic system ever attempted.
posted by ljromanoff at 11:58 PM on June 14, 2001

"By essential, I mean water and electricity"

I think what you're trying to say is that the utilities should be government-controlled. Am I right?
posted by CrayDrygu at 12:05 AM on June 15, 2001

I think what you're trying to say is that the utilities should be government-controlled. Am I right?

Either that, or be properly regulated with actual choice and competition - not mandated monopolies.

There is no 'capitalist law' that says don't help people. In fact, the wealth generated by capitalism has helped more people out through the rough spots in their lives than any other economic system ever attempted.

True. But there's also no capitalist law saying you should help. I really don't want to leave the welfare of people up to benevolent millionaires.
posted by owillis at 12:25 AM on June 15, 2001

Water and electricity are the kind of utilities that come from a single source becuase there is but ONE delivery mechanism. Why must you conservatives hark on this? These prices and conditions affect you too!
posted by crasspastor at 12:41 AM on June 15, 2001

err. . .harp on this. . .
posted by crasspastor at 12:44 AM on June 15, 2001

It's not a simple problem and people who try to find simple solutions or short answers are probably making mistakes. Edison and PG&E are smarter than the government regulators in CA; they saw this coming and transferred billions of dollars upstream to the corporate holding companies. But... that's what I would have done in their place. Prohibited by the shortsighted goverment from locking in long-term supplies of power, PG&E was forced to buy expensive power on the open market at spot prices. Prices rose so fast they were losing money on every kilowatt they delivered. Should they have left their money in PG&E to subsidize governmental stupidity and bled their stockholders dry? I don't think so. What they should have done is gone public with the problem (which, in retrospect, was perfectly foreseeable), and given the citizens of CA some warning and opportunity to take action.

Now we're in a situation where we clearly need more power plants. But it takes 2 years - minimum - to bring a new plant online, even if you short-circuit all the CA environmental impact studies and whatnot. What do we do until then? (BTW, my combined gas and electricity bill for February was over $800.00, so this matters to me). In the short run, as a temporary solution, the government probably should step in to control prices.

Longer term, CA needs to rethink its deregulation plan. There are risks to not having ownership of the generating plants or the transmission networks for your citizens under your control.

BTW, in CA if you generate excess power, your utility company is required to buy it from you at the same spot rates they are paying major utilities. There have been several articles in the SF Chronicle about people who have done just that. The problem is that the power-generating equipment is expensive. Cheaper solutions - geothermal, solar, wind, etc. - in general don't provide enough power to make them a reliable alternative to the power company.

I think not paying your bills is a bad idea. You probably need electricity worse than they need your money. You'll trash your credit rating, and it probably won't have an impact on PG&E's behavior. As much as they've been lambasted and vilified in the local press, if public pressure were going to change anything, I think it would have already. The central problem is that we aren't producing enough power, and that's going to take time to correct.

The most interesting proposal I've heard for a short term solution, which I understand is now moving forward, is to fire up generators on mothballed Navy ships in Suisun Bay near Benicia and order nuclear-powered submarines to help provide energy.
posted by JParker at 1:41 AM on June 15, 2001

there are other ways to assist our fellow man than through the heavy hand of government control.

such as, in this particular situation...?

(And no, solutions that involve rewarding the power companies for their utter mismanagement of the situation don't count.)
posted by holgate at 5:24 AM on June 15, 2001

Should they have left their money in PG&E to subsidize governmental stupidity

PG&E fully supported legislation which had the spot-price system as a condition. They were hoping, among other things, to avoid being locked into a high market price. They also accepted a cap on charges to their customers in return for stranded cost recovery ($8 billion in bailouts for money they sank into now-unusable infrastructure, mainly nuclear power). At the time the legislation was written, it looked like a cushy deal to PG&E, who never expected wholesale prices to rise so high -- they negotiated for the terms of the legislation and lobbied for it fiercely. I wouldn't say that the stupidity demonstrated here was solely on the part of the government, nor that PG&E has been the subsidy-providing player in this case.
posted by redfoxtail at 6:42 AM on June 15, 2001

True. But there's also no capitalist law saying you should help. I really don't want to leave the welfare of people up to benevolent millionaires.

No, I know. You would rather leave it up to the government despite the fact that since the 1960s they have left a seven trillion dollar trail of tears that leads straight into crime ridden public housing, a generation of fatherless families, drug abuse, and no appreciable change in the poverty level.
posted by ljromanoff at 6:56 AM on June 15, 2001

ljr: can you name one democratic, free-market-led nation that's managed to address those social problems successfully?

It's not a question of ideology, but of management, and of social competence.
posted by holgate at 7:04 AM on June 15, 2001

redfoxtail, I wasn't saying that that PG&E "has been the subsidy-providing player in this case." Clearly they haven't. I was saying it was not reasonable to expect them to play that role once it was clear prices were headed higher. And you're right, PG&E did support the legislation requiring them to buy at spot rates. Just goes to show that the issue is a complicated one, and there are no heros in this story, only villians.

I guess my point is that simple solutions like "don't pay your bill" aren't the answer. When I assess root causes of the current disasterous situation, I come down blaming bad legislation by California officials about 75%, greedy power companies about 25%. I wish there was a way to boycott my state government (other than moving - the Bay area is my favorite).
posted by JParker at 9:03 AM on June 15, 2001

I guess I just don't understand why it's unreasonable to expect them to abide by rules they lobbied for.
posted by redfoxtail at 9:09 AM on June 15, 2001

What I'm really trying to say is that they wouldn't be "subsidiz[ing] governmental stupidity," but their own stupidity. In any case, of course, the whole thing is mainly just a big, grotesque mess. I voted no on the referendum; I wish more people had.
posted by redfoxtail at 9:14 AM on June 15, 2001

I could just as easily blame those ills on the growth of the corporation in the past 40 years and the lessening of its tax burden as a percentage of the federal tax revenue

You could blame that, but since that has nothing to do with the problem you'd sound pretty foolish. Whether all corporations pay x percent or y percent is meaningless. Do you think if corporations paid a greater percentage of tax in the last 40 years that that would somehow make things better? If anything it would exacerbate problems as it would negatively impact the economy due to less capital in the economy and result in greater job loss and higher inflation. You might as well blame the position of the moon.

or even blame it on lunar alignments

Well, there you go.

for all the proof you've ever bothered to proffer when making such statements now or in the past- I can't help but wonder where the heck that $7,000,000,000,000 figure came from.

Add up the cost of the federal anti-poverty programs that were created as a result of LBJ's Great Society and you've got your $7 trillion.
posted by ljromanoff at 10:34 AM on June 15, 2001

Still waiting for that example of capitalist utopia, ljr...
posted by holgate at 10:49 AM on June 15, 2001

I think that LJR is trying to say the despite the $7T, these problems still exist and, in some cases, have gotten worse. If $7T isn't enough to solve the problem, will $7.1T? Likely not - but that $100B could do a lot of good elsewhere, if that elsewhere is only back into the balance sheets of the company's, and wallets of the individuals, it originally came from. Concomitantly, maybe it's time to look at alternatives to throwing money at problems, especially if 40 years of doing so hasn't solved anything and, as LJR pointed out, has created some new problems.

Still waiting for that example of capitalist utopia

There's no such thing, of course. Nor is there a communist utopia, a socialist utopia, or a Bokonist utopia. But I think we can say that, if personal freedom and per capita wealth are indicators of overall well being, capitalism does seem to provide better than the alternatives.
posted by UncleFes at 11:54 AM on June 15, 2001

capitalism does seem to provide better than the alternatives

Um, that is, when it is allowed to work properly. I'm not sure what they are calling that financial system in Cali, but capitalism it ain't. But I'm betting that Gray Davis has a well-thumbed copy of Das Kapital in his office. With margin notes :)
posted by UncleFes at 11:58 AM on June 15, 2001

Well, socialism works well, when allowed to work properly... as do all political ideologies in theory.

But anyway, where's your example of capitalism working properly, providing wealth and freedom for the greater majority? Doesn't have to be a utopia.

(There are plenty of countries which do throw money at problems, and plenty of it seems to stick. And for all the talk of the US's economic pre-eminence, a capitalism sustained on irrational exuberance and consumer credit ain't gonna provide lasting value.)
posted by holgate at 12:15 PM on June 15, 2001

where's your example of capitalism working properly

Well, America of course! Highest standard of living in the world; one of the highest per capita incomes; plenty of consumer goods; lots of good land; the highest level of homeownership in the world, good health overall, plenty of food, freedoms unknown in the entire rest of the world.

There are anomolies, nothing is universal. But overall, capitalism works in America.

I think that Bermuda is supposed to be a great example of pure capitalism. Minimal government services, private utilities, but obviously this is on a vastly smaller scale.

Where's your example of socialism working properly? Like in practice? Theory is bunkum. Dynastic monarchies work in theory.

a capitalism sustained on irrational exuberance and consumer credit ain't gonna provide lasting value

True enough. But that's the exception, rather than the rule. Since 1928, the market has returned a touch over 9%. That's solid, long term growth, transcending the industrial revoluton and moving through to the digital age. In the same time period, every Communist country save Cuba (China is something, but communist isn't it) has gone belly-up. I'd say that's a pretty good vote for capitalism, for both governments and individuals.
posted by UncleFes at 12:52 PM on June 15, 2001

fes: might not this lack of savings and reliance on credit undo all those solid years? it seems to this layman that it easily could. - rcb
posted by rebeccablood at 1:55 PM on June 15, 2001

Highest standard of living in the world...

bzzt.

For those for whom it works, American capitalism works big. (If you can parse that. Though I can't really put it any other way.) Most of the other league leaders in GDP per capita, or PPP (crude indicators, but they'll suffice for the moment) are at least honest enough to make provision for the rest. And most of them are under governments that would be considered well to the left of the US political spectrum.
posted by holgate at 2:11 PM on June 15, 2001

I'm not anti-capitalism. God knows, nobody loves a greenback like me. What I am for, is a system like what we have in America with social (or socialist) programs that are fiscally accountable, but help people through rough spots in their lives and provide for human essentials (healthcare, electricity, housing) with the promise of repayment when people are "back up on their feet". Basically a "hand up", not a "hand out".
posted by owillis at 2:17 PM on June 15, 2001

Maybe the people in California should consider boycotting Starbuck's.
posted by kindall at 3:15 PM on June 15, 2001

For those for whom it works, American capitalism works big.

And for those of whom are willing to be a part of it, it works big.

What I am for, is a system like what we have in America with social (or socialist) programs that are fiscally accountable, but help people through rough spots in their lives and provide for human essentials

That sounds lovely but the reality of it is that every dollar of 'help' that is given the government takes from someone else. And as I have mentioned before, the government does a horrid job of giving people 'help' even if one puts aside the odious way it gets the funds to assist people.
posted by ljromanoff at 4:38 PM on June 15, 2001

ljromanoff: That sounds lovely but the reality of it is that every dollar of 'help' that is given the government takes from someone else.

buh? like from military spending the pentagon never requested, or other pork?

And as I have mentioned before, the government does a horrid job of giving people 'help'

agreed, this is often inefficient, but I don't see any reason to throw out the baby with the bathwater. the fact is, people need help sometimes, and I'd like to live in a place that does even more to see that the young, the infirm, the elderly, and the discouraged are either given the things they need or the tools they need to take care of themselves. that's the preferred use of my tax dollars, in fact.

even if one puts aside the odious way it gets the funds to assist people.

do you mean taxes? odious? - rcb
posted by rebeccablood at 4:45 PM on June 15, 2001

for those of whom are willing to be a part of it, it works big.

Ah, the "deserving rich, undeserving poor" argument.
posted by holgate at 6:19 PM on June 15, 2001

ljromanoff: That sounds lovely but the reality of it is that every dollar of 'help' that is given the government takes from someone else.

buh? like from military spending the pentagon never requested, or other pork?

No, that's not what I meant at all. I mean the people who actually earned the money.

even if one puts aside the odious way it gets the funds to assist people.

do you mean taxes? odious? - rcb

Yes, taxes are odious. The concept, and certainly the current destructive levels of taxation are odious. We keep less of our own earnings than medivial serfs did. And at least they got food and shelter as part of the income they gave up.

for those of whom are willing to be a part of it, it works big.

Ah, the "deserving rich, undeserving poor" argument.

Even I'm not such a capitalism booster that I think that everyone who works hard gets rich. But thanks for misinterpreting my comment.
posted by ljromanoff at 6:31 PM on June 15, 2001

ljr: thanks for misinterpreting my comment.

well, I think the point is that most people who are very poor work very, very hard.

I get so irritated when I hear someone of means explain why they shouldn't pay higher taxes with: "do you think it's fair that I should have worked so hard all these years, and now be penalized for it in taxes?"

the underlying belief there being that those who are poor have not worked hard, which is why they're not so well-to-do. I like to point out that some of the poorest people on the planet do a days work that no one in any kind of white collar job can begin to equal. - rcb
posted by rebeccablood at 6:39 PM on June 15, 2001

(noting, in passing, that the hilariously underperforming Texas Rangers -- the PG of the MLB, currently undergoing regular run blackouts -- are very nearly a pure product of the free market, were it not for the fact that US sports organisations -- in spite of the Republican jock fraternity -- are in fact highly regulated monopolies, the likes of which would never be tolerated in other industries.)
posted by holgate at 7:10 PM on June 15, 2001

LRJ, I think the flaw in your thinking it awful that every tax dollar is money "taken" from someone else is that you seem to think all dollars are equal. In one way they are of course, but in another one can say that money has diminishing returns-

Merely because you're are taking my 50,000th dollar instead of my 1st makes that dollar no less a representation of my skills and labor. To confiscate that from me and hand it to someone else is wrong, regardless of how much I may or may not miss it.

Wealth is largely luck anyway.

That's ridiculous. The vast majority of the people who are well off in this country are that way due to the fact that they spent years working very hard, put everything they had at risk, had a brilliant new idea, or all of the above. Not every wealthy person is born into it like Senator Kennedy.
posted by ljromanoff at 7:36 PM on June 15, 2001

The vast majority of the people who are well off in this country are that way due to the fact that they spent years working very hard, put everything they had at risk, had a brilliant new idea, or all of the above. Not every wealthy person is born into it like Senator Kennedy.

Must. Resist. Obvious. Bush. Comment.

Have you ever considered that, were you in a society where the state didn't "confiscate" your money, you might not actually have the chance to use your skills and labour for profit and satisfaction? Or, to push the boat out, that the money you earn might not, in the grand scheme of things, be an accurate representation of the contribution that you make to the common weal?
posted by holgate at 8:01 PM on June 15, 2001

Have you ever considered that, were you in a society where the state didn't "confiscate" your money, you might not actually have the chance to use your skills and labour for profit and satisfaction?

I'm dying for you to explain to me your convoluted thinking on this one. How exactly does the forced redistribution of my earnings make it possible for me to make use of the earnings I have remaining?
posted by ljromanoff at 9:30 PM on June 15, 2001

Because you have regulated conditions that see to it that you are safe, have clean water, "know" that the airplane you board is airworthy, the roads are clear of sinkholes and animals, bridges don't fall out from under your car when you drive in the "bad areas" of town, tornado warnings course across the bottom of your television screen, elevators are inspected so you won't get caught mid ascent to your corporate powerlunch. Good grief.
posted by crasspastor at 9:46 PM on June 15, 2001

never mind roads, and elected and unelected officials to do the business of the state, and a military to protect your wealth from being confiscated by an unscrupulous foreign people.
posted by rebeccablood at 9:51 PM on June 15, 2001

In any case, the simple fact is that ljr is correct: the majority of millionaires in the US are self-made. First generation.

Made on the backs of non American potentiates by "unlocking" the profit, otherwise known as the little money they command.
posted by crasspastor at 9:57 PM on June 15, 2001

Because you have regulated conditions that see to it that you are safe, have clean water, "know" that the airplane you board is airworthy, the roads are clear of sinkholes and animals, bridges don't fall out from under your car when you drive in the "bad areas" of town, tornado warnings course across the bottom of your television screen, elevators are inspected so you won't get caught mid ascent to your corporate powerlunch. Good grief.

Crasspastor, as usual you need a reading comprehsion class. None of these things have anything to do with the redistribution of wealth. Furthermore, not all of them can be attributed in any appreciable way to govt. (specifically the airplane example) and most of the rest can be better done by private organzations anyway.
posted by ljromanoff at 10:22 PM on June 15, 2001

In any case, the simple fact is that ljr is correct: the majority of millionaires in the US are self-made. First generation.

Made on the backs of non American potentiates by "unlocking" the profit, otherwise known as the little money they command.

You know, I'm really starting to wonder if you actually believe all of your nonsense or if all of your posts are some sort of attempt at irony.
posted by ljromanoff at 10:23 PM on June 15, 2001

redistribution of wealth:

That is the capitalistic euphemism for taxation. When we pay taxes they also go for these things, among many others that we may or may not agree with.

(specifically the airplane example)

Care to explain what finances the FAA?

most of the rest can be better done by private organzations anyway.

Examples chief?
posted by crasspastor at 10:28 PM on June 15, 2001

ljr: some have suggested we privatize law enforcement. would you go for that?
posted by owillis at 10:34 PM on June 15, 2001

You know, I'm really starting to wonder if you actually believe all of your nonsense or if all of your posts are some sort of attempt at irony.

I just included some links. Read.

You are a dyed in the wool true believing libertarian. There really isn't any arguing with you. You never represent fairly the opposing argument in any of your retorts.

Are you then arguing that Americans profiting off of overseas investments affects the citizens of those foreign places favorably? If not, are you positing that perhaps American profit radar just glides by, unnoticed by their soon to be ravaged economies. Were you to live in Thailand LJR you'd most certainly take a different tact. Your provincial Americanism is personlly obnoxious as you recursively stoop to ad hominem against me and ill information by that exact true belief that free market will benefit everybody equally.
posted by crasspastor at 10:45 PM on June 15, 2001

Misnomer:

"American profit radar" isn't just indigenous to Americans.
posted by crasspastor at 10:50 PM on June 15, 2001

redistribution of wealth:

That is the capitalistic euphemism for taxation.

No it isn't. When I use words, I intend the meanings of the words. Don't try to tell me what I'm saying.

(specifically the airplane example)

Care to explain what finances the FAA?

It's not the FAA that keeps planes safe, it's the market benefit of not being thought of the way ValueJet was/is. Or to put it another way, having safe planes is a good business decision.

most of the rest can be better done by private organzations anyway.

Examples chief?

Government maintenance of roads gives us $20 billion dollar bridge & highway projects like the one I see every day in Boston. Do you really think $2 billion per mile is an effecient use of resources?

some have suggested we privatize law enforcement. would you go for that?

I'm fairly satisfied with the private/public mix of law enforcement we already have. Although I should point out that the most direct form of government abuse many citizens experience is in the form of a man in a police uniform.

There really isn't any arguing with you. You never represent fairly the opposing argument in any of your retorts.

Physician, heal thyself.

Are you then arguing that Americans profiting off of overseas investments affects the citizens of those foreign places favorably?

Can you cite somewhere I said that? No, what I said was that most so-called rich people in this country did it through their own effort, labor, and skill. It had nothing to do with exploitation, Third World or otherwise.
posted by ljromanoff at 11:02 PM on June 15, 2001

I should point out that the most direct form of government abuse many citizens experience is in the form of a man in a police uniform.

No doubt, I was just trying to gauge how widespread your belief in free market doctrine went.

Do you really think $2 billion per mile is an effecient use of resources?

I sure as hell don't. And there's the problem. I do believe government should be the one building the highway, but they need to be held accountable. When our tax dollars go into the federal pot, I want them to go to the best contractor - not Senator Snodgrass' brother's construction company. If you're gonna take my money, at least spend it wisely.

Or to put it another way, having safe planes is a good business decision.

You would think so, but left to their own designs I truly feel the airlines would cut costs (therefore maximizing profits) as much as physically possible.

For me, that emphasizes the common flaw in libertarian and socialist systems: they have too much blind faith in human beings.

In a socialist system, the government spends money without accountability. In a libertarian system, businesses profit without any regard for the consumers - and monopolies pervert the concept of free markets because they encourage market manipulation.
posted by owillis at 11:21 PM on June 15, 2001

aaron: LJR's use of Ted Kennedy as an example of the privileges of inherited wealth and rich friends... well, if you're going to choose the extreme on one side, you might as well counter it with another absurdity. And you're right: the US is better than most places at rewarding hard work and ingenuity, because there are fewer barriers to entry at the millionaires' club, and because there's a cultural tolerance to small setbacks that you don't tend to find elsewhere.

Not that this doesn't wildly distort the reward for achievement in certain sectors: I bet Henry Blodget or Mary Meeker aren't taking too much of a pay cut, even though they managed to lure plenty of dot-com investors over the cliff like the Pied Piper. And I think people are particularly angered, in the case of California power or British railway management, when executives get bonuses for success and failure, and profits get siphoned off to holding companies, beyond the reach of the courts: you reach a point of wealth and power where you're apparently no longer responsible for your actions, or at least they don't affect your bank balance.

Others have pointed out that one of the roles of taxation is to provide a condusive climate for economic growth, and that this has by necessity a social context. (I'd like to see how many web designers are making a living in Somalia right now, given that the place has struggled on without a government, or taxation, for a long time.)

But LJR lives in a nice little libertarian bubble, so there's no arguing with him. Just be careful with those needles.
posted by holgate at 8:20 AM on June 16, 2001

Well, to refute one of your assertions - there are tons of talented atheletes. The ones that succeed are the ones who work hard. In sports, natural physical talent is only half the game. Look at people like Ryan Leaf, or Dennis Rodman who had physical talent but were not willing to work at their craft.

Someone like Jeff Bezos, as poorly as his business may be run - he took the leap of logic to create an online book store. That seems like a gimme now, but 5-6 years ago? Sure, deposed CEOs get golden parachutes - but that's the nature of the beast. The thinking is that the successful CEO has created something of value, which benefits the shareholders (who could be anyone).

It depends on your definition of "working hard", I guess. I don't think Bill Gates ever flipped burgers, but he had a concept that turned into a company that caused him to be the richest dude in the world (while generating tons of Microsoft Millionaires along the way). Does that take away from his success? Not in my view - because how many people had the vision or bollocks to do what he's done? Not many, I'd guess.
posted by owillis at 11:35 AM on June 16, 2001

You don't think Ryan Leaf or Dennis Rodman are millionaires? This may be an argument that it takes hard work to maximize your fortune, but hincandenza's point stands, I think.
posted by rodii at 11:39 AM on June 16, 2001

(I'll just take a moment here to point out that bill gates was born in the lap of luxury, and benefitted from his father's money, the education it could buy him, and old-boys network.)

again, the point is not whether most wealthy people worked hard for their money, but that most people who work as hard or harder than them are not wealthy and some of them are quite poor.

so, there obviously is *some* factor besides working hard here. - rcb
posted by rebeccablood at 5:00 PM on June 16, 2001

Philip Greenspun's comments on Gates can't be topped: "Choose Your Grandparents Carefully".

I was reading a piece from The Nation (in full disclosure of my already-obvious political leanings) about the way Paul O'Neill was retreating from a reform of the offshore banking system: the way in which transnational corporations, or the seriously wealthy, can route their assets through the Cayman Islands or Gibraltar to avoid taxation or investigation.

And that's the crux of the matter: there's a difference between the wealthiest in society and those who strive to accumulate wealth, that's not just a difference in degree, but one in kind. People who work their way up from the bottom of the pile are more exposed to the frailties of the economy, and the inequities of the tax system. In fact, you could argue that Bush's tax cut isn't that much of a reward to the ultra-wealthy, since most have the ability to ensure that their assets are safely sequestered in some tropical tax haven. And it's not just a question of wealth: when you see media magnates like Rupert Murdoch and Conrad Black seemingly switching their nationality at will in order to consolidate their holdings, you realise that the rich are different from you and I, not simply because they have more money. Wealth gives you a mobility of jurisdiction; corporate clout gives you the ability to shrug off responsibilities and debts in a way that no private citizen could contemplate.

In part, it derives from the social networks to which certain sectors of society are privy: I know of dot-coms in the UK that got off the ground precisely because the founders could rely upon their school and college chums to put in a good word to the right people in the right places -- venture capitalists and investment bankers -- whereas someone with the same idea, but without the contacts, would have had to go to the bank for a loan, and most likely have been turned down. I can even say mea culpa, because I've been given a few jobs through friends-of-friends. (The first job is a matter of trust, based upon contacts; I've justified that trust if they come back to me.) But I'm always aware that there's an injustice in the way the system works.
posted by holgate at 5:30 PM on June 16, 2001

Let's not forget that the wealthy are able to buy more of the planet's finite wealth along with, and by way of, the other luxuries holgate spells out above. It's most certainly not the quintessential arduously long ladder that one has to have the extreme gumption to climb, eventually laying hands on that fabled reward of hard-work-will-get-you-anywhere, but instead different ladders of varying ascendable ease. The easy ladders can only be bought in the most exclusive of stores.

Barbara Garson relates in her most recent book Money Makes the World Go Round (Must paraphrase as I've loaned the book out):

In Mexico, traditionally there has been a cheap dessert which amounts to basically Italian shaved ice that kids have clamored for for generations and peddlers have made modest means selling it on the street. What little money the people there do have, there was always just enough of it to get the occasional shaved ice. However, upon the latest "unlocking" of investment potential in Mexican telecommunications, petroleum refining and a host of other all things NAFTA, the subsequent Mexican economic crash and bailout by IMF loans, the teensy surplus Mexican citizens had is now gone. Blame it on lower wages/unemployment, higher taxes, corruption etc. (reasons for all of those), affording shaved ice is now so impossible, that the purveyors were forced out of business, many coming to the US in search of virtually wageless toil and the children largely do without what little (literally 10 cent) luxury they did have. Why? Because, upon "unlocking" wealth, a select few wealthy investors were able to surreptitiously procure a couple of dollars from every Mexican family every week or so until it all crashed, all the while touting "Mexican economic vibrancy" to American middle class investors--whose money they needed to make it happen.

Oh and they'll be back to take more. They're just about done with southeast Asia. Err, maybe they are finished with them about now.

Holy topic drift, I must also add.
posted by crasspastor at 8:09 PM on June 16, 2001

I probably sidetracked you guys a bit by throwing Gates in there (first uber-rich guy I could think of). My point is that - yes, being born into wealth sure as hell helps, but there is still the chance that someone can work themselves up to the point of being wealthy (though the road may be longer). I've seen it in my own extended family, and its the thought of this that makes me get up and go to work each morning. Maybe I've had one swig too many of the Kool-Aid, but I do feel a poor person can work there way up to wealth in America.

And, yes - there is an element of luck in just about everything we do/accomplish.
posted by owillis at 11:20 PM on June 16, 2001

I think we all helped to make it drift a little bit owillis. Here here, for good discussion!
posted by crasspastor at 11:29 PM on June 16, 2001

And that's the crux of the matter: there's a difference between the wealthiest in society and those who strive to accumulate wealth, that's not just a difference in degree, but one in kind.

In as much as this is true at all, it is only true for the the very wealthiest (Gates, Ted Turner, etc.) Most of the wealthy are no different from anyone else, as most wealthy are first generation who made their money through many years of work. To suggest that the wealthy are somehow alien from the rest of us is a gereralization with little meaning. One could just as easily make the same argument about being good at basketball, for example. I doubt very much that Shaquille O'Neal's worldview has little in common with most people, either.

Let's not forget that the wealthy are able to buy more of the planet's finite wealth along with

Wealth is not finite. It can be generated or destroyed. The idea that wealth is static is a fallacy that leads to a lot of misunderstandings about the relationship between the wealthy and the poor. If wealth is finite, how has the amount of wealth changed throughout time? Why are we as a world wealthier now than we were in the Middle Ages? Why was the world poorer during the Middle Ages than during Pax Romana? Answer: there is no 'finite' amount of wealth. When one person becomes rich, it is not necessarily due to other people becoming poor.
posted by ljromanoff at 11:31 AM on June 17, 2001

very much that Shaquille O'Neal's worldview has little

Make that 'little', 'much'. Typo.
posted by ljromanoff at 11:44 AM on June 17, 2001

Why are we as a world wealthier now than we were in the Middle Ages?

Ah-ha! Rhetorical question. Answer is, "technology" right? All the en vogue toys of my youth (Stompers), all the luxury items I now own, but don't need (DVD player, 27'' Television, My girlfriend "had" to go to IKEA twice this week) are examples of fair and equal cause/effect wealth distribution and consumer satisfaction? All I can really say here, without delving totally into my brimming mind (the kind of brimming that would lead to an essay), until someone discovers how to use asteroids as viable sources for raw materials, we're stuck here on Earth. Earth being a finite place with, as it follows, finite resources that the global economy precariously teeters on. So yes LJR, wealth is finite. Maybe we can wave to each other in the hallway of the community college. Me coming out of my reading comprehension course and you out of Economics 080.

Why was the world poorer during the Middle Ages than during Pax Romana?

Must. Resist. Obvious. Monty Python. Reference.

"But what have the Romans really given us?"

Have you really, LJR, brought this thread full circle?
posted by crasspastor at 12:46 PM on June 17, 2001

Why are we as a world wealthier now than we were in the Middle Ages?

Ah-ha! Rhetorical question. Answer is, "technology" right?

The answer is yes. Technology is only a small part of it. The larger answer is that the application of human intellect to natural resources of all types has enriched our society. Consequently, the amount of wealth (like the amount of knowledge) has grown. Therefore wealth is not static.

until someone discovers how to use asteroids as viable sources for raw materials, we're stuck here on Earth. Earth being a finite place with, as it follows, finite resources

Your mistake is equating wealth with natural resources - they are not the same thing. Humanity adds to the value of natural resources by devising new and valuable uses for them, as well as devising new and better methods of interacting with each other. While you make an obvious point in describing natural resources as finite, this does not mean that wealth is also finite.

toys of my youth (Stompers)

Stompers!!! Wow, I had forgotten about them. I've got to head over to Ebay for a while.
posted by ljromanoff at 2:11 PM on June 17, 2001