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06/22/2009

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"Where privatisation becomes a backdoor way of expanding the role of the state and thereby reducing people’s freedom this should be exposed and criticised."

This was one of the greater “jokes” of the republican era. Privatization should mean the removal of government control from areas of the market place. Yet in example after example, it meant changing the rules of governance and, as sure as night follows day, many rewards were reaped by those making such changes. As the legal modifications worked their deleterious magic, blame was cast. It was the free market which wrongly took the fall.

Take the California blackouts, for example. When rolling blackouts covered that state, privatization was trotted out as the cause. How convenient for the politicians. What was not discussed was the way those politicians changed the laws concerning the state’s energy creation – as if they should have any say in it at all. Passed under the guise of privatization, the law decreed that no more power companies were to be built within the state (does this sound like a free market?). Also, the price of wholesale power would be allowed to rise but the retail price was to be fixed. Any time you enact price controls, you will ultimately have shortages. Hence, the rolling blackouts occurred as companies, trying to meet the higher electricity demands, were forced to buy from out-of-state at higher prices but not allowed to pass those prices on to consumers. That’s not privatization. That’s a command economy by another name.

Just one example of many, I’m afraid.

Thank you, Eric, for the excellent example and for pointing out other essential aspects of the scam.

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