California Finally Got a Budget?

I really wish I could put an explanation point on that sentence, but we’ll probably be back in the same place a few months from now. Revenues are still declining precipitously and much of the deal was smoke and mirrors.The deal included $2.1 billion in borrowing and $1.5 billion in fund shifts. The latter includes thing like shifting state workers’ pay day from June 30 to July 1. And the bonds are going to be expensive: our bond rating is at BBB. That’s not to mention the fact that not all of the $15.5 billion of cuts actually deserves the name or the very real possibility that the $4 billion of new revenue likely won’t occur. Personally I think we just needed to realize how obvious the solution really was. Yet before anyone starts laughing at California’s expense, let’s consider a pithy analysis by Joe Matthews:

And where would the federal government be without California? In big trouble. For one thing, the United States would lose the substantial subsidy from our state’s taxpayers. That’s right, we subsidize you. California gets back about 80 cents for every dollar we pay in federal taxes. And, while we’re on the subject, don’t forget the damage that California, as an independent country, could do to the U.S. dollar if we started printing our own currency. The Chinese would be wise to sell their U.S. dollars and instead invest in debt issued by our new republic, which would be a better risk. Perhaps California could provide the new alternative global currency standard that Chinese President Hu and Russian Prime Minister Putin are talking about.

If California wasn’t stuck attached to the rest of the country, we’d be Sweden. A little more exciting and dysfunctional perhaps, but Sweden nonetheless. And regardless of what you think of the welfare state, that certainly beats our current situation. Yet the some think that’s just the tattered remains of what once was; the National Editor of the Atlantic pronounces the Dream dead:

“It was a magnificent run. From the end of the Second World War to the mid-1960s, California consolidated its position as an economic and technological colossus and emerged as the country’s dominant political, social, and cultural trendsetter… It was a sweet, vivacious time: California’s children, swarming on all those new playgrounds, seemed healthier, happier, taller, and—thanks to that brilliantly clean sunshine—were blonder and more tan than kids in the rest of the country. For better and mostly for worse, it’s a time irretrievably lost.”

No, the pundits, as usual, have to be taken with a grain of salt. What this schadenfraude really is about is a perverse combination of angst and pent up anger towards California’s cockiness for the last hundred or so years. The rest of the country always looked at California with suspicion: Why are they so special? What made them think they could have the best of everything? California represented the nation’s hopes and dreams. Just as America offered the promise of a better life for millions around the globe, so did California for millions of Americans—with the same resulting jealousies and love/hate relationship. So now that it’s supposedly that’s over, they can’t help but enjoy it a little. But there’s a nervousness to their laughter.

As John Hodgeman said, “It’s like they think they can Europe over there, but without taxes and clean teeth.” But the California Dream was always a bit absurd: gold literally paving the streams, sunshine all year round, and everyone living the Good Life. If the American Dream is to be thought as taking the ideals of European Enlightenment and amalgamating it across the very American ideology of Pragmatism, then the California Dream has taken that Dream and pulled out the rug of reality from underneath. Why not a house for every home and a starlet in every girl? Why not make the American Dream a reality for everyone? There’s more than enough space here—natural, cinematic, technological—to make it happen.

But occasionally that rarefied ideal crashes into some inconvenient realities. Isn’t that the paradox of California’s Constitution? Seemingly everything deserves a place in the sacred document—a bit of the state for all! The People have said spoken. Of course, if everything is fundamental, then really nothing is. And therein lies the hollow kernel of the California Dream—just as devoid there as in Santa Barbara’s monotonously worry-free living. That’s why there’s no neat, easily referencible parable for it.[i] Yet as we claw desperately for social redemption, there is value and virtue in obfuscation: only there can all of humanity hope to fit. For California’s Dream is ultimately man’s, the idea of creating heaven on earth. That’s why there’s no need to write California off yet: there’s bound to be some earthquakes when you sublate the divine into the temporal.

[i] Compare that to America’s one house, two cars, a white picket fence, and 2.1 smiling children.

Patrick Atwater

Patrick Atwater is a senior at Claremont McKenna College, pursuing a dual degree in Mathematics and Philosophy, Politics, and Economics (PPE). When not playing football or slaving away at the Rose, he spends his time theorizing about the California Dream, which Abhi is foolish enough to pay him for. He enjoys theoretical politics, skiing, Russian literature, genuine people, not swimming back, happiness, the outdoors, Michael Bay movies, trying new things, island paradises, the works of Amartya Sen, traveling, and making gross overgeneralizations.

the slightly less than 2/3 maj

Accounting tricks indeed, but left unmentioned are the huge cuts to secondary education, higher education (considered the best in the nation at one point, maybe still now), removing poor kids from health care, etc. California is probably one of the 5 most Democratic states (the most small d-democratic) but republicans now will get to govern the state like alabama or south carolina (shout out 2 sanford) with all of the spending cuts. One hopes all the 2/3 majority crap gets cut out so we can have a state that THE PEOPLE want and not some right-wing nutjob minority that thinks that obama was born in kenya and that sarah palin will be our next president.
the slightly less than 2/3 majority

Accounting tricks indeed, but left unmentioned are the huge cuts to secondary education, higher education (considered the best in the nation at one point, maybe still now), removing poor kids from health care, etc. California is probably one of the 5 most Democratic states (the most small d-democratic) but republicans now will get to govern the state like alabama or south carolina (shout out 2 sanford) with all of the spending cuts. One hopes all the 2/3 majority crap gets cut out so we can have a state that THE PEOPLE want and not some right-wing nutjob minority that thinks that obama was born in kenya and that sarah palin will be our next president.
The People

Well, we, THE PEOPLE, also voted not to lower the two thirds budget and taxation requirement. We instituted it via Prop 13 and we voted down a proposal to change it this last decade. We have spoken.
The People

Well, we, THE PEOPLE, also voted not to lower the two thirds budget and taxation requirement. We instituted it via Prop 13 and we voted down a proposal to change it this last decade. We have spoken.
http://claremontconservative.com Charles C. Johnson

The 80 cents on the dollar figure is deceptive, at best. California deliberately tinkers with this figure by inflating the numbers of people it has on welfare in violation of federal welfare to work laws, which it refuses to enforce. California accounts for 12% of the nation’s population, but over 32% of its welfare rolls. Compare that to Texas, a state with one tenth the welfare numbers and also a border state. Don’t believe me? Just look at these charts and the data for yourself. http://www.chuckdevore.com/blog.asp?artid=94

Like Sweden, which liberals like Patrick know very little of — did you know, for instance, that Sweden has a school choice program and a conservative government that wants to desperately reduce the nation’s welfare rolls? — California for years has become a haven for the super wealthy and the super poor, as anyone who knows anything about welfare politics will tell you.

The reason for all of this? The political influence of the public sector unions. It’s no secret that they have way too much power. “The state’s annual pension fund contribution vaulted from $321 million in 2000–01 to $7.3 billion last year. According to public databases, more than 5,000 people are drawing pensions in excess of $100,000 from the state of California each year.” (http://www.reason.com/news/show/134445.html)

Time for California, New Jersey, and all the other Democrat states with high taxation, low productivity to join the red states with their lower unemployment and taxation before it’s too late. Of course, they won’t and will force their middle class out to go live in AZ, Colorado, etc. Now there’s a subsidy for you! No middle class in California won’t be a problem for some who can afford the higher taxes, but many of them will be refugees coming over to the other states once that foolish climate change bill and the higher taxes kick in.

Add to that the climate change lunacy of our governor and the Democrats and you have a perfect storm of stupidity. California is poised to become the most expensive state in the Union to get energy, despite having some of the mildest weather.

On top of that, the school age population has declined, but our spending on education has exploded.

So, yeah, California way to keep doubling your budget every six years. That’ll sure work out fine!

Kimberly M.

Let me preface this by saying in true California fashion, “Don’t hate.”

Okay now, your point on welfare is a non sequitur. First off, welfare is 1.8% of the federal budget (not including war expenditures), it’s very unlikely that out of all the things the federal government gives out that a slightly disproportionate use of one resource cancels out all our taxes. And that stat about Californians only receiving .80 back on every dollar. That includes welfare. Work provisions in welfare are great, they’re popular, whatever- they are more people on welfare in California. None of these things refute Patrick’s point for you.

On energy: I assume you’re talking about the Renewable Portfolios Standards and the energy regulatory system we have in California. They’re great and not just for climate change. You see, my East Coast friend, California had this energy crisis in 2000, so we’re a bit concerned about energy reliability. In the summer, California boasts some of the hottest temperatures in the U.S. The Coachella Valley regularly hits temperatures above 110. It’s lunacy not to do something about energy. By the way, Texas has these RPS too. They are doing wonders there and haven’t raised the costs of energy to unbearable highs. They’ve created jobs and brought the price of wind power down.

I’m going to skip past your union screed because you’ve missed the real reason those pensions exist and the reason they are hard to remove. Most of those people with those large pensions are safety officers. Cops. Firefighters. The men and women who risk their lives defending ours. You tell me what politician is going to go up to them and say, “Thanks for fighting dangerous LA gangs, now we’re going to cut the pension you’ve been investing in all your career.”

Charles, your comment just reads off like a bunch of half-thought out rants against California because we like to elect people with D’s next to their names. You clearly don’t know the underlying issues that have made our state such a budgetary mess in a year when many other states are having similar struggles. This is not something lower taxes can fix like a magic bullet, alright.

Peace.

http://claremontconservative.com Charles C. Johnson

Thanks, Kim, but I wanted to keep it somewhat less wonky. I’m also heavily critical of some of the Republicans in California, but if you noticed, I didn’t name a party. The problems I identified with the welfare rolls indicate a place where left leaning people have tried — illegally, I might add — to get the risk of the country to subsidize the Californian policy of encouraging welfare rolls to explode. Oftentimes, that leads to a drain on the state budgets that isn’t included just in that welfare costs projection from the federal government, as welfare recipients tend to consume more state — like subsidized housing, (which this state mandates), public education (which this state spends way too much on), and like nearly free medical care (which this state provides).

The cops and firefighters are not the ones who have gotten the most of the money, but for the sake of argument, let’s assume they were — though it’s genuinely dishonest to suggest that the ones being compensated the most are the ones fighting gang life. it still doesn’t justify the town leaders making unwise and downright irresponsible promises to those unions that they knew were unsustainable. Read when America Aged by Roger Lowenstein, if you want a good history of CALPers.

I’ve been reading about California for years. (My dad was raised in Coronado, CA.) I have read enough about the energy debacle to know that it was a predictable result that California would experience it thanks to environmentalist and NIMBY groups tried to shut down energy production in various parts of California’s energy sector.

It was best explained here.

From 1979 to 1999, generating capacity of over 45,000 megawatts was proposed to the [California Energy] Commission,” [Tom McClintock] said. “Only 4,500 megawatts was approved. Nuclear power plants were forbidden, and Rancho Seco and San Onofre Unit One,” another nuclear reactor, “were shut down prematurely. . . . For 27 years, this state has actively discouraged the construction of new power plants, and the day finally arrived when we ran out of power.” Indeed, California’s capability to generate electricity actually decreased slightly from 1990 through 1999. http://www.city-journal.org/2008/18_2_californias_environmentalism.html

California set energy mandates from the other states which make the cost of bringing in energy some of the highest in the nation.

Don’t assume, Kim. I wasn’t calling for lower taxes. Keeping taxes where they are and cutting social services would be the smartest bet. California is one of a bunch of states that spent like drunken sailors. In lean times, we should have had a rainy day fund.
Patrick Atwater

Charles despite your protestations to the contrary, you really have no idea what you’re talking about. For instance: “public education (which this state spends way too much on).” All the particular facts and figures about bloated LA Unified salaries or this that and the other ultimately only obscure a single, devastating fact: California is near dead last in per pupil spending. So then, you would have to be suggesting that all of the US spend less on public education. But that seems absolutely retarded given the dynamics of the knowledge economy.

And you’re wrong about taxes too. California tax rates are clearly too high/progressive. That’s why we have these boom and bust budgets. But go ahead. Link to another of your fellow smug ideologues. Keep yourself in clown status. But meanwhile, some people are actually doing the tough business of making the state a better place (http://www.cotce.ca.gov/).
http://www.indefenseofwonk.com Kimberly M.

Dude. I hate to comment after the weekend with another “Sorry, but no” comment. If you had been reading anything substantive about the California Energy Crisis, you would see it was caused by an unorganized deregulation which led to some utilities to buy energy on spot markets while those spot markets fluctuated like mad. If the problem was that wasn’t enough supply because the environmentalists did it, then the prices of electricity would have just gone up, people would have practiced some conservation and the crisis wouldn’t have ended in as many blackouts.

To make matters worse, you had also had market gaming by Enron, policies allowing large consumers to buy energy from multiple utilities causing massive price fluctuations, confusion between state regulators and the FERC and very high summer temperatures. California’s fixed most of that regulatory mess, but even today there isn’t much economic incentive to build giant energy plants when you can buy long-term fixed-rate contracts with independent power producers.

Energy policy is trickier than whether or not we build more plants and even that process is complicated. Most of the opposition behind nuclear plants comes from Wall Street not environmentalists. Some of the first plants went billions of dollars over budget. Investors were burned with the first round of plants and have been hesitant to put up new capital since then. Talk with Professor Jurewitz at Pomona when you have the time. He’s usually out by the Coop and can tell you useful things about energy policy and the future of nuclear.

Also re: Gang-busting cops and CalPERS. I really hope you never decide to go into political consulting, if you think anyone will touch those pensions. Either way, my point was that there was more than a crazy amount of power from the unions at play here.

P.S. Wonk is awesome and incredibly important when it comes to issues as complex as energy. I came to CMC because I love reading wonk and I assume (I know risky business right?) everyone at this school is smart enough to handle something beyond empty platitudes and rhetoric. But I’ve had a long summer and your comments get predictable after awhile, so I apologize if I wrongly predicted your policy subscriptions.

?

Wouldn’t the fact that California is inflating its welfare roles push that 80 cent figure up? If any federal dollars go towards that higher, “illegal” (according to you) level of service, then it obviously would. I mean welfare is a government service. So I really don’t get what you’re getting at…

http://claremontconservative.com Charles C. Johnson

The argument I was making is that that figure is a lot more complicated.

Much of that 80 cents comes from California’s wealthy — who are increasingly leaving the state due to the high state taxes. Fewer and fewer companies base their headquarters in California, so it’s likely that expanding the welfare rolls will lead to wider consumption of state services.

What happens is that California Dems use that figure to justify all sorts of social spending — including expanding welfare rolls — that ends up increasing state government. Currently, there’s a deal where the feds will recompense California 50-50 but that still means that California has to provide the other 50%. The Dems try to get “back” dollars from the federal government, and so inflate welfare rolls, which in turn, drives out more jobs to subsidize those people in the long run.

In short, you get the behavior you incentivize. In the long run, this bodes poorly for California’s economic well being.
Patrick Atwater

So basically people are using the figure in a way that you don’t like… That makes it wrong how?

http://claremontconservative.com Charles C. Johnson

The 80 cents on the dollar figure is deceptive, at best. California deliberately tinkers with this figure by inflating the numbers of people it has on welfare in violation of federal welfare to work laws, which it refuses to enforce. California accounts for 12% of the nation’s population, but over 32% of its welfare rolls. Compare that to Texas, a state with one tenth the welfare numbers and also a border state. Don’t believe me? Just look at these charts and the data for yourself. http://www.chuckdevore.com/blog.asp?artid=94

Like Sweden, which liberals like Patrick know very little of — did you know, for instance, that Sweden has a school choice program and a conservative government that wants to desperately reduce the nation’s welfare rolls? — California for years has become a haven for the super wealthy and the super poor, as anyone who knows anything about welfare politics will tell you.

The reason for all of this? The political influence of the public sector unions. It’s no secret that they have way too much power. “The state’s annual pension fund contribution vaulted from $321 million in 2000–01 to $7.3 billion last year. According to public databases, more than 5,000 people are drawing pensions in excess of $100,000 from the state of California each year.” (http://www.reason.com/news/show/134445.html)

Time for California, New Jersey, and all the other Democrat states with high taxation, low productivity to join the red states with their lower unemployment and taxation before it’s too late. Of course, they won’t and will force their middle class out to go live in AZ, Colorado, etc. Now there’s a subsidy for you! No middle class in California won’t be a problem for some who can afford the higher taxes, but many of them will be refugees coming over to the other states once that foolish climate change bill and the higher taxes kick in.

Add to that the climate change lunacy of our governor and the Democrats and you have a perfect storm of stupidity. California is poised to become the most expensive state in the Union to get energy, despite having some of the mildest weather.

On top of that, the school age population has declined, but our spending on education has exploded.

So, yeah, California way to keep doubling your budget every six years. That’ll sure work out fine!

Kimberly M.

Let me preface this by saying in true California fashion, “Don’t hate.”

Okay now, your point on welfare is a non sequitur. First off, welfare is 1.8% of the federal budget (not including war expenditures), it’s very unlikely that out of all the things the federal government gives out that a slightly disproportionate use of one resource cancels out all our taxes. And that stat about Californians only receiving .80 back on every dollar. That includes welfare. Work provisions in welfare are great, they’re popular, whatever- they are more people on welfare in California. None of these things refute Patrick’s point for you.

On energy: I assume you’re talking about the Renewable Portfolios Standards and the energy regulatory system we have in California. They’re great and not just for climate change. You see, my East Coast friend, California had this energy crisis in 2000, so we’re a bit concerned about energy reliability. In the summer, California boasts some of the hottest temperatures in the U.S. The Coachella Valley regularly hits temperatures above 110. It’s lunacy not to do something about energy. By the way, Texas has these RPS too. They are doing wonders there and haven’t raised the costs of energy to unbearable highs. They’ve created jobs and brought the price of wind power down.

I’m going to skip past your union screed because you’ve missed the real reason those pensions exist and the reason they are hard to remove. Most of those people with those large pensions are safety officers. Cops. Firefighters. The men and women who risk their lives defending ours. You tell me what politician is going to go up to them and say, “Thanks for fighting dangerous LA gangs, now we’re going to cut the pension you’ve been investing in all your career.”

Charles, your comment just reads off like a bunch of half-thought out rants against California because we like to elect people with D’s next to their names. You clearly don’t know the underlying issues that have made our state such a budgetary mess in a year when many other states are having similar struggles. This is not something lower taxes can fix like a magic bullet, alright.

Peace.

http://claremontconservative.com Charles C. Johnson

Thanks, Kim, but I wanted to keep it somewhat less wonky. I’m also heavily critical of some of the Republicans in California, but if you noticed, I didn’t name a party. The problems I identified with the welfare rolls indicate a place where left leaning people have tried — illegally, I might add — to get the risk of the country to subsidize the Californian policy of encouraging welfare rolls to explode. Oftentimes, that leads to a drain on the state budgets that isn’t included just in that welfare costs projection from the federal government, as welfare recipients tend to consume more state — like subsidized housing, (which this state mandates), public education (which this state spends way too much on), and like nearly free medical care (which this state provides).

The cops and firefighters are not the ones who have gotten the most of the money, but for the sake of argument, let’s assume they were — though it’s genuinely dishonest to suggest that the ones being compensated the most are the ones fighting gang life. it still doesn’t justify the town leaders making unwise and downright irresponsible promises to those unions that they knew were unsustainable. Read when America Aged by Roger Lowenstein, if you want a good history of CALPers.

I’ve been reading about California for years. (My dad was raised in Coronado, CA.) I have read enough about the energy debacle to know that it was a predictable result that California would experience it thanks to environmentalist and NIMBY groups tried to shut down energy production in various parts of California’s energy sector.

It was best explained here.

From 1979 to 1999, generating capacity of over 45,000 megawatts was proposed to the [California Energy] Commission,” [Tom McClintock] said. “Only 4,500 megawatts was approved. Nuclear power plants were forbidden, and Rancho Seco and San Onofre Unit One,” another nuclear reactor, “were shut down prematurely. . . . For 27 years, this state has actively discouraged the construction of new power plants, and the day finally arrived when we ran out of power.” Indeed, California’s capability to generate electricity actually decreased slightly from 1990 through 1999. http://www.city-journal.org/2008/18_2_californias_environmentalism.html

California set energy mandates from the other states which make the cost of bringing in energy some of the highest in the nation.

Don’t assume, Kim. I wasn’t calling for lower taxes. Keeping taxes where they are and cutting social services would be the smartest bet. California is one of a bunch of states that spent like drunken sailors. In lean times, we should have had a rainy day fund.
Patrick Atwater

Charles despite your protestations to the contrary, you really have no idea what you’re talking about. For instance: “public education (which this state spends way too much on).” All the particular facts and figures about bloated LA Unified salaries or this that and the other ultimately only obscure a single, devastating fact: California is near dead last in per pupil spending. So then, you would have to be suggesting that all of the US spend less on public education. But that seems absolutely retarded given the dynamics of the knowledge economy.

And you’re wrong about taxes too. California tax rates are clearly too high/progressive. That’s why we have these boom and bust budgets. But go ahead. Link to another of your fellow smug ideologues. Keep yourself in clown status. But meanwhile, some people are actually doing the tough business of making the state a better place (http://www.cotce.ca.gov/).
http://www.indefenseofwonk.com Kimberly M.

Dude. I hate to comment after the weekend with another “Sorry, but no” comment. If you had been reading anything substantive about the California Energy Crisis, you would see it was caused by an unorganized deregulation which led to some utilities to buy energy on spot markets while those spot markets fluctuated like mad. If the problem was that wasn’t enough supply because the environmentalists did it, then the prices of electricity would have just gone up, people would have practiced some conservation and the crisis wouldn’t have ended in as many blackouts.

To make matters worse, you had also had market gaming by Enron, policies allowing large consumers to buy energy from multiple utilities causing massive price fluctuations, confusion between state regulators and the FERC and very high summer temperatures. California’s fixed most of that regulatory mess, but even today there isn’t much economic incentive to build giant energy plants when you can buy long-term fixed-rate contracts with independent power producers.

Energy policy is trickier than whether or not we build more plants and even that process is complicated. Most of the opposition behind nuclear plants comes from Wall Street not environmentalists. Some of the first plants went billions of dollars over budget. Investors were burned with the first round of plants and have been hesitant to put up new capital since then. Talk with Professor Jurewitz at Pomona when you have the time. He’s usually out by the Coop and can tell you useful things about energy policy and the future of nuclear.

Also re: Gang-busting cops and CalPERS. I really hope you never decide to go into political consulting, if you think anyone will touch those pensions. Either way, my point was that there was more than a crazy amount of power from the unions at play here.

P.S. Wonk is awesome and incredibly important when it comes to issues as complex as energy. I came to CMC because I love reading wonk and I assume (I know risky business right?) everyone at this school is smart enough to handle something beyond empty platitudes and rhetoric. But I’ve had a long summer and your comments get predictable after awhile, so I apologize if I wrongly predicted your policy subscriptions.

?

Wouldn’t the fact that California is inflating its welfare roles push that 80 cent figure up? If any federal dollars go towards that higher, “illegal” (according to you) level of service, then it obviously would. I mean welfare is a government service. So I really don’t get what you’re getting at…

http://claremontconservative.com Charles C. Johnson

The argument I was making is that that figure is a lot more complicated.

Much of that 80 cents comes from California’s wealthy — who are increasingly leaving the state due to the high state taxes. Fewer and fewer companies base their headquarters in California, so it’s likely that expanding the welfare rolls will lead to wider consumption of state services.

What happens is that California Dems use that figure to justify all sorts of social spending — including expanding welfare rolls — that ends up increasing state government. Currently, there’s a deal where the feds will recompense California 50-50 but that still means that California has to provide the other 50%. The Dems try to get “back” dollars from the federal government, and so inflate welfare rolls, which in turn, drives out more jobs to subsidize those people in the long run.

In short, you get the behavior you incentivize. In the long run, this bodes poorly for California’s economic well being.
Patrick Atwater

So basically people are using the figure in a way that you don’t like… That makes it wrong how?

http://claremontconservative.com Charles C. Johnson

http://www.reason.tv/video/show/hasta-la-vista-arnold
http://claremontconservative.com Charles C. Johnson

http://www.reason.tv/video/show/hasta-la-vista-arnold
DROOOOGAN

So Patrick my initial question for you is why do you even think that there is a “California Dream”?

First an excerpt from The Chili Peppers:

Psychic spies from China
Try to steal your mind’s elation
Little girls from Sweden
Dream of silver screen quotations
And if you want these kind of dreams
It’s Californication

It’s the edge of the world
And all of western civilization
The sun may rise in the East
At least it settles in the final location
It’s understood that Hollywood
sells Californication

- Californication

It seems to me that California’s bloated appearance has come from our entertainment industry. I mean, this Hollywood culture California boasts has severely skewed what the state was initially meant to be, namely a gateway to the Pacific Ocean and a beautiful frontier to start on a foundation brought from the east. In all, California is:
 The birthplace of Fast Food
 Nor Cal (San Fran, Fresno, Silicon Valley, etc)
 Cen Cal (Farm and Wine Country)
 So Cal (Los Angeles, San Diego, etc)
 Beauty (Yosemite, the Pacific Ocean, etc)
 Opportunity (Gold Rush, Hollywood, etc)
 Turmoil (Illegal immigration, gentrification, debt, etc)
and the list goes on and on. If any one state could indeed step out on its own, I do believe it could be California. ¼ of all homes owned in the United States belong to California. Ultimately: when our economy tanks, the country’s economy tanks. California’s politicians in Sacramento should have also tried to set an example for the country throughout the budget discourse in order to set off some sort of spark for the politicians in DC. In the end, all the citizens of California are left to is a simulated ideal of Californication, where apathy and sunshine rays can blind us into the next budget crisis.
DROOOOGAN

So Patrick my initial question for you is why do you even think that there is a “California Dream”?

First an excerpt from The Chili Peppers:

Psychic spies from China
Try to steal your mind’s elation
Little girls from Sweden
Dream of silver screen quotations
And if you want these kind of dreams
It’s Californication

It’s the edge of the world
And all of western civilization
The sun may rise in the East
At least it settles in the final location
It’s understood that Hollywood
sells Californication

- Californication

It seems to me that California’s bloated appearance has come from our entertainment industry. I mean, this Hollywood culture California boasts has severely skewed what the state was initially meant to be, namely a gateway to the Pacific Ocean and a beautiful frontier to start on a foundation brought from the east. In all, California is:
 The birthplace of Fast Food
 Nor Cal (San Fran, Fresno, Silicon Valley, etc)
 Cen Cal (Farm and Wine Country)
 So Cal (Los Angeles, San Diego, etc)
 Beauty (Yosemite, the Pacific Ocean, etc)
 Opportunity (Gold Rush, Hollywood, etc)
 Turmoil (Illegal immigration, gentrification, debt, etc)
and the list goes on and on. If any one state could indeed step out on its own, I do believe it could be California. ¼ of all homes owned in the United States belong to California. Ultimately: when our economy tanks, the country’s economy tanks. California’s politicians in Sacramento should have also tried to set an example for the country throughout the budget discourse in order to set off some sort of spark for the politicians in DC. In the end, all the citizens of California are left to is a simulated ideal of Californication, where apathy and sunshine rays can blind us into the next budget crisis.
Patrick Atwater

Ah, Drugan my dear friend, the Chili Peppers are indeed illustrative here: “The sun may rise in the East – At least it settles in the final location.” Mankind has always had a fickle relationship with the other, with the strange and foreign. Witness Plato’s Atlantis: initially he used the island as a foil to highlight the perfection of an allegorical Athens but eventually it came to hold promise as well as fear.

California too has always been something of an island. Whether due to some conspiracy of cartographers or more mundane reasons, California was depicted as an island up to well into the 17th century. Clearly of course it’s not. But it is in a sense. Southern California is ringed by mountains and then by desert on two of its three sides. It is an island on the land. More generally, California has always had an ethereal, surreal quality to it. Gold country! That idea of a promised land has persisted in the public mythos. Witness the Great Depression and the Grapes of Wrath stories of people disparately trying to get to California. Even today, can you imagine South Park using any other place in its episode on the death of the internet? California is a place away, an island in the mind.

California also is, as you say, the “gateway to the Pacific.” It is where East meets West—both literally and in the universal appeal of its ideology. A part of all mankind yearns for the land of milk and honey, of eternal sunshine. The bloated Hollywood culture you reference here is not something in excess here but rather just a continual recapitulation of that Goldrush mentality. Anyone can make it, anything can happen, life’s crazy. It’s Hollywood folks! That’s as Californian as In-n-Out or surfing.

So to return to your original question, man came to this paradise by the sea—this land of eternal sunshine, of startling natural beauty and resources—and asked himself the question that has always plagued him: “If we can’t make it here, then where…?” The yawning awesomeness of paradise stared him in the face and let loose his capacity to wonder. That’s why we have the California Dream.
Patrick Atwater

Ah, Drugan my dear friend, the Chili Peppers are indeed illustrative here: “The sun may rise in the East – At least it settles in the final location.” Mankind has always had a fickle relationship with the other, with the strange and foreign. Witness Plato’s Atlantis: initially he used the island as a foil to highlight the perfection of an allegorical Athens but eventually it came to hold promise as well as fear.

California too has always been something of an island. Whether due to some conspiracy of cartographers or more mundane reasons, California was depicted as an island up to well into the 17th century. Clearly of course it’s not. But it is in a sense. Southern California is ringed by mountains and then by desert on two of its three sides. It is an island on the land. More generally, California has always had an ethereal, surreal quality to it. Gold country! That idea of a promised land has persisted in the public mythos. Witness the Great Depression and the Grapes of Wrath stories of people disparately trying to get to California. Even today, can you imagine South Park using any other place in its episode on the death of the internet? California is a place away, an island in the mind.

California also is, as you say, the “gateway to the Pacific.” It is where East meets West—both literally and in the universal appeal of its ideology. A part of all mankind yearns for the land of milk and honey, of eternal sunshine. The bloated Hollywood culture you reference here is not something in excess here but rather just a continual recapitulation of that Goldrush mentality. Anyone can make it, anything can happen, life’s crazy. It’s Hollywood folks! That’s as Californian as In-n-Out or surfing.

So to return to your original question, man came to this paradise by the sea—this land of eternal sunshine, of startling natural beauty and resources—and asked himself the question that has always plagued him: “If we can’t make it here, then where…?” The yawning awesomeness of paradise stared him in the face and let loose his capacity to wonder. That’s why we have the California Dream.
http://claremontconservative.com Charles C. Johnson

Patrick,

If you’re going to resort to ad hominem attacks, I’m just going to have to keep coming back with the facts. I know, I know, they’re tough to handle, but I refuse to be called a “clown” merely for pointing to uncomfortable figures. I’ll go toe to toe with you any day of the week on California state politics and challenge you here and now to a debate in front of the entire school at a time of your choosing on California spending. I’m confident that I can make a more persuasive case that it needs to be reigned in then you’re incoherent — and oftentimes unsubstantiated — ramblings on the Forum. It might be easy for some to fork out the money for ever bigger and bigger California government — earlier this year, there were nearly 10 California state workers per thousand residents — but many of us are starting to get sick of it. The onus is on you — not me — to explain why California’s budget needs to double every ten years. In fact, it’s growing faster than that. In fiscal year 1990–91, California took in more than $38 billion in general fund revenues. In 2008–09 revenues are $102 billion. If the state had simply limited spending increases to the 4.4 percent annual average growth in consumer price index plus population, the state would be sitting on a $15 billion surplus this year instead of a $42 billion deficit.

As for education, I’m not even talking about LA Unified. I’m talking about the entire state system.

Here are my facts. Do you even have any?

From 2002 to 2007, overall spending rose 50 percent faster than inflation. Education spending increased almost 70 percent faster than inflation, even though the relative school-age population was falling. Medicaid and salaries for state workers rose almost twice as fast as inflation.

Now you can argue that we need 70 percent more spending on education, but you cannot argue that we don’t spend the money. As for per pupil expenditures, you’re right — but that’s only because California’s teacher’s unions take most of the money that goes into the schools, which incidentally, is why California’s public school teachers are some of the highest paid in the nation (with, might I add, some of the worst outcomes.)

All of the data I cite I always check in data that the state government provides. (It tends to be one of my more obsessive tendencies.) I cite to some things on Reason or whatever, because I was trained that you cite where you initially found the data, not the government reports backing it up.

So it’s on you now. Do you want to actually argue or will, clown that YOU are, the joke be on you?

Wait

Charles, why are you the only one talking about California’s spending growth? And why then are you attacking Patrick based on that? Did he make some earlier statement in favor of that?

http://claremontconservative.com Charles C. Johnson

Patrick,

If you’re going to resort to ad hominem attacks, I’m just going to have to keep coming back with the facts. I know, I know, they’re tough to handle, but I refuse to be called a “clown” merely for pointing to uncomfortable figures. I’ll go toe to toe with you any day of the week on California state politics and challenge you here and now to a debate in front of the entire school at a time of your choosing on California spending. I’m confident that I can make a more persuasive case that it needs to be reigned in then you’re incoherent — and oftentimes unsubstantiated — ramblings on the Forum. It might be easy for some to fork out the money for ever bigger and bigger California government — earlier this year, there were nearly 10 California state workers per thousand residents — but many of us are starting to get sick of it. The onus is on you — not me — to explain why California’s budget needs to double every ten years. In fact, it’s growing faster than that. In fiscal year 1990–91, California took in more than $38 billion in general fund revenues. In 2008–09 revenues are $102 billion. If the state had simply limited spending increases to the 4.4 percent annual average growth in consumer price index plus population, the state would be sitting on a $15 billion surplus this year instead of a $42 billion deficit.

As for education, I’m not even talking about LA Unified. I’m talking about the entire state system.

Here are my facts. Do you even have any?

From 2002 to 2007, overall spending rose 50 percent faster than inflation. Education spending increased almost 70 percent faster than inflation, even though the relative school-age population was falling. Medicaid and salaries for state workers rose almost twice as fast as inflation.

Now you can argue that we need 70 percent more spending on education, but you cannot argue that we don’t spend the money. As for per pupil expenditures, you’re right — but that’s only because California’s teacher’s unions take most of the money that goes into the schools, which incidentally, is why California’s public school teachers are some of the highest paid in the nation (with, might I add, some of the worst outcomes.)

All of the data I cite I always check in data that the state government provides. (It tends to be one of my more obsessive tendencies.) I cite to some things on Reason or whatever, because I was trained that you cite where you initially found the data, not the government reports backing it up.

So it’s on you now. Do you want to actually argue or will, clown that YOU are, the joke be on you?

Wait

Charles, why are you the only one talking about California’s spending growth? And why then are you attacking Patrick based on that? Did he make some earlier statement in favor of that?

OhhhhMG

“I’m confident that I can make a more persuasive case that it needs to be reigned in then you’re incoherent…”

I’m confident that this is ridiculous. I think it’s time to make a compartmentalized message board for all this jibber jabber.
OhhhhMG

“I’m confident that I can make a more persuasive case that it needs to be reigned in then you’re incoherent…”

I’m confident that this is ridiculous. I think it’s time to make a compartmentalized message board for all this jibber jabber.
Patrick Atwater

Charles you’re a clown because you start quoting facts about things that aren’t relevant to the topic at hand, but I’ll happily debate you about the problems of California.
Patrick Atwater

Charles you’re a clown because you start quoting facts about things that aren’t relevant to the topic at hand, but I’ll happily debate you about the problems of California.
http://claremontconservative.com Charles C. Johnson

I disagree. The facts are completely related to how California got its budget to be so bloated.

Time and a place?

Patrick Atwater

Haha this is turning into a bad caricature of West Side Story. Charles, I was disagreeing with you about our education and tax policy. Then all of a sudden you start accusing me of wholeheartedly supporting California’s spendthrift ways. Maybe that makes sense to you, but it doesn’t to me.

As for the debate, I think we can wait until school starts to hash out the details.

Andy Fastow

Patrick, you’re a G. I loved your comment response addressing “californication”. As an implant to California, I couldn’t agree more. The innovative spirit of California and the feeling that it inspires will live much longer than the current crisis and may very well beckon in the next bull market.
wooo!

There will be blood!

http://claremontconservative.com Charles C. Johnson

I disagree. The facts are completely related to how California got its budget to be so bloated.

Time and a place?

Patrick Atwater

Haha this is turning into a bad caricature of West Side Story. Charles, I was disagreeing with you about our education and tax policy. Then all of a sudden you start accusing me of wholeheartedly supporting California’s spendthrift ways. Maybe that makes sense to you, but it doesn’t to me.

As for the debate, I think we can wait until school starts to hash out the details.

Andy Fastow

Patrick, you’re a G. I loved your comment response addressing “californication”. As an implant to California, I couldn’t agree more. The innovative spirit of California and the feeling that it inspires will live much longer than the current crisis and may very well beckon in the next bull market.
wooo!

There will be blood!

http://claremontportside.com Andrew Bluebond

I don’t want to get buried in the extracurricular debate, but I have a question. Can you back us this statement, Charles:

“Much of that 80 cents comes from California’s wealthy — who are increasingly leaving the state due to the high state taxes.”

I would be curious to see how you can show causality.
http://claremontportside.com Andrew Bluebond

I don’t want to get buried in the extracurricular debate, but I have a question. Can you back us this statement, Charles:

“Much of that 80 cents comes from California’s wealthy — who are increasingly leaving the state due to the high state taxes.”

I would be curious to see how you can show causality.
http://claremontconservative.com Charles C. Johnson

http://www.laweekly.com/2009-01-29/news/middle-class-flight-from-san-fernando-valley/

There’s a lot more, but I promised that I would go outside today.
http://claremontconservative.com Charles C. Johnson

http://www.laweekly.com/2009-01-29/news/middle-class-flight-from-san-fernando-valley/

There’s a lot more, but I promised that I would go outside today.
http://claremontportside.com Andrew Bluebond

I don’t see anything that would show causality, and most of it is speculation by the author. Did the people move to areas with lower taxes? Did they leave to find new jobs? None of that is covered, and so I remain unconvinced.
http://claremontportside.com Andrew Bluebond

I don’t see anything that would show causality, and most of it is speculation by the author. Did the people move to areas with lower taxes? Did they leave to find new jobs? None of that is covered, and so I remain unconvinced.
http://claremontconservative.com Charles C. Johnson

@Kim,

I think it’s you who gets the “Sorry, but no” comment here. I confess that it’s widely believed that California’s energy market was “deregulated” but it’s more like it was “restructured”. Again, here are the facts.

If you disagree with them, please let me know, because perhaps — though I doubt it — I was misinformed.

Since the early 1990s California hasn’t built a single power plant in the entire state. Much of the reason for that is that the investor-backed plants that you mentioned have had to deal with increased regulation, not less of it and at least with nuclear power, environmentalist groups targeted them for being shut down.

Here’s how the entire mess happened. In 1996, responding to the political watch word of the day — “deregulation” — Steve Peace got the legislature to unanimously pass a bill that had the backings of big industrial customers, utilities, environmental groups, and consumer groups — groups that typically never get along.

in fact, the bill created something of a cartel. Consumer and environmentalist groups succeeded in getting a ten percent rate cut and numerous price controls — which any student of economics knows works so well. Big business hoped that it could get cheaper, subsidized electricity, so it went along. Meanwhile, investor-owned were forced by the rate cut to sell off many of their power plants. But they got the state to increase the “competitive transaction charge” which was effectively a license that restriction the entry of new energy players. Hence a cartel was formed.

The so-called spot market you’re referring to was the Power Exchange in Pasadena, which was a centralized marketplace where buyers were forced to trade there. State law prohibited buyers and sellers from agreeing to individual contracts and mandated that everyone pay the same — and highest — price offered on any given day. So, in short, it wasn’t a free market. To make things that much better, regulators could decide what price the utilities could charge energy customers.

The results were predictable. Under the restructuring plan, this capacity crunch got very severely out of wack.

The wholesale prices paid by utilities increased until they were as much as 100 times greater than the retail price utilities are allowed to charge consumers. In short, there was an energy box created by the law that led to the shortages.

re: environmentalists and supply. According to the California Utilities Commission, demand has outstripped supply, which grow respectively at 12 percent and 2 percent each year. Why? Because state law and various environmentalists groups sue for environmental impact reports which increases the cost of actually building anything. Investors are delayed and so when they are holding the money, they often find it hard to cover the money’s interest and so they only pay for projects with short term bang — which power plants are most certainly not.

As for deregulation, why has Pennsylvania achieve it to the support of nearly all relevant groups, but California languished behind? Could it be that California never had deregulation of its energy markets?

If you want to wonk it out, I’ll wonk it out. But please have the facts and don’t just read the LA Times. Thanks.

As for CalPERS and the pensions, it needs to happen whether or not its politically astute. And no, I’m not interested in doing political consulting, I’d rather run for office.

Kimberly M.

I’m glad you’ve hashed out your argument from blaming “environmentalist and NIMBY groups tried to shut down energy production in various parts of California’s energy sector” to something closer to the truth– a flawed deregulation execution, some fraud and political paralysis with basic energy economics. Facts will do that, you know?

I hate sounding arrogant, but I’m a little annoyed– why is it that whenever anyone asks you to bring facts to the table, you feel the need to resort to ad hominem attacks and odd snide comments? I spent most of my junior year learning about energy policy in Washington DC and the Claremont Colleges. I know enough about energy to out-do your anecdotal-based accounts.

For example, your statement about investors and long-term energy projects. The problem with power supply isn’t that investors aren’t investing in long-term energy projects because of NIMBYism; there are incentives for these projects. Independent Power Producers set up contracts with utilities for 30-year periods under the popular and oversubscribed Standard Offers to purchase power at a set price and set amount. Utilities bought energy from IPPs under favorable rates and conditions (example: solar is cheap during peak usage hours and any renewable source of energy is likely to give utilities RECs which will become tradable for utilities in the future), so to say that investors are ignoring power plants because they’re going for projects with more “bang for their buck” is just false. You could have gotten all the details about this if you attended the Southern California Edison presentation in Claremont last Spring.

Nuclear and large plants are special cases. With nuclear plants in particular, you have investors still aching over losing millions in the last round of plants. New technological advances reducing costs might bring those investors back, but environmentalism and NIMBYism are only a few of many causes outlined for why these plants haven’t been built. Professor Jurewitz wrote a chapter on Nuclear Power in the United States which goes into all this and the new stuff in the EPAct of 2005 regarding nuclear since it’s only tangentially related to California.

Now the crisis wasn’t caused by environmentalists foolishly restricting supply and anyone who tells you that should not be allowed anywhere near Sacramento. Like you stated yourself, it was badly executed deregulation that led to the crisis. However, fraud and political paralysis exacerbated it. Your account about price caps is close with a few flourishes, but my clarification wouldn’t really change the fact that the price ceilings promoted a massive amount of demand when there wasn’t enough supply to go around. None of that changes how erratically the spot markets were behaving due to the massive gaming by energy traders and a lack of long-term contracts for a number of large buyers of electricity. (By the way, the California Power Exchange only dealt in next-day energy trading. The California Independent System Operator handled the real-time trading which had none of this nonsense you’ve been talking about.) Californian utilities were required to buy power on these real-time markets to serve their customer despite the high price and the rate caps. Other deregulating states like Pennsylvania mandate utilities to have a diverse sources of energy to ensure reliability.

LA Times, really?

http://claremontconservative.com Charles C. Johnson

I’d congratulate you on your time spent in D.C., but I really mustn’t let you browbeat me into agreeing with you. I’ve perhaps read more about electricity than you have, especially early twentieth century efforts at national grid electrification and I’ve been a good friend of Lynne Kiesling at Knowledge Problem for over a year. In short, I think my energy creds stack up.

I fail to see how it was deregulation at all, given what I laid out in the past post.

I’m sticking by my statement about how mandates led to a warped energy market that continues to be anything but free market and that one of the fastest ways to meet our energy needs would be allow companies to build more power plants. (Right now they already have to keep with state run power plants, kind of like how Obama wants health care to operate.)

They’re more interested in gaming the system because they don’t know if the entire system might change. Who would blame them for eschewing long term investments?

http://claremontconservative.com Charles C. Johnson

@Kim,

I think it’s you who gets the “Sorry, but no” comment here. I confess that it’s widely believed that California’s energy market was “deregulated” but it’s more like it was “restructured”. Again, here are the facts.

If you disagree with them, please let me know, because perhaps — though I doubt it — I was misinformed.

Since the early 1990s California hasn’t built a single power plant in the entire state. Much of the reason for that is that the investor-backed plants that you mentioned have had to deal with increased regulation, not less of it and at least with nuclear power, environmentalist groups targeted them for being shut down.

Here’s how the entire mess happened. In 1996, responding to the political watch word of the day — “deregulation” — Steve Peace got the legislature to unanimously pass a bill that had the backings of big industrial customers, utilities, environmental groups, and consumer groups — groups that typically never get along.

in fact, the bill created something of a cartel. Consumer and environmentalist groups succeeded in getting a ten percent rate cut and numerous price controls — which any student of economics knows works so well. Big business hoped that it could get cheaper, subsidized electricity, so it went along. Meanwhile, investor-owned were forced by the rate cut to sell off many of their power plants. But they got the state to increase the “competitive transaction charge” which was effectively a license that restriction the entry of new energy players. Hence a cartel was formed.

The so-called spot market you’re referring to was the Power Exchange in Pasadena, which was a centralized marketplace where buyers were forced to trade there. State law prohibited buyers and sellers from agreeing to individual contracts and mandated that everyone pay the same — and highest — price offered on any given day. So, in short, it wasn’t a free market. To make things that much better, regulators could decide what price the utilities could charge energy customers.

The results were predictable. Under the restructuring plan, this capacity crunch got very severely out of wack.

The wholesale prices paid by utilities increased until they were as much as 100 times greater than the retail price utilities are allowed to charge consumers. In short, there was an energy box created by the law that led to the shortages.

re: environmentalists and supply. According to the California Utilities Commission, demand has outstripped supply, which grow respectively at 12 percent and 2 percent each year. Why? Because state law and various environmentalists groups sue for environmental impact reports which increases the cost of actually building anything. Investors are delayed and so when they are holding the money, they often find it hard to cover the money’s interest and so they only pay for projects with short term bang — which power plants are most certainly not.

As for deregulation, why has Pennsylvania achieve it to the support of nearly all relevant groups, but California languished behind? Could it be that California never had deregulation of its energy markets?

If you want to wonk it out, I’ll wonk it out. But please have the facts and don’t just read the LA Times. Thanks.

As for CalPERS and the pensions, it needs to happen whether or not its politically astute. And no, I’m not interested in doing political consulting, I’d rather run for office.

Kimberly M.

I’m glad you’ve hashed out your argument from blaming “environmentalist and NIMBY groups tried to shut down energy production in various parts of California’s energy sector” to something closer to the truth– a flawed deregulation execution, some fraud and political paralysis with basic energy economics. Facts will do that, you know?

I hate sounding arrogant, but I’m a little annoyed– why is it that whenever anyone asks you to bring facts to the table, you feel the need to resort to ad hominem attacks and odd snide comments? I spent most of my junior year learning about energy policy in Washington DC and the Claremont Colleges. I know enough about energy to out-do your anecdotal-based accounts.

For example, your statement about investors and long-term energy projects. The problem with power supply isn’t that investors aren’t investing in long-term energy projects because of NIMBYism; there are incentives for these projects. Independent Power Producers set up contracts with utilities for 30-year periods under the popular and oversubscribed Standard Offers to purchase power at a set price and set amount. Utilities bought energy from IPPs under favorable rates and conditions (example: solar is cheap during peak usage hours and any renewable source of energy is likely to give utilities RECs which will become tradable for utilities in the future), so to say that investors are ignoring power plants because they’re going for projects with more “bang for their buck” is just false. You could have gotten all the details about this if you attended the Southern California Edison presentation in Claremont last Spring.

Nuclear and large plants are special cases. With nuclear plants in particular, you have investors still aching over losing millions in the last round of plants. New technological advances reducing costs might bring those investors back, but environmentalism and NIMBYism are only a few of many causes outlined for why these plants haven’t been built. Professor Jurewitz wrote a chapter on Nuclear Power in the United States which goes into all this and the new stuff in the EPAct of 2005 regarding nuclear since it’s only tangentially related to California.

Now the crisis wasn’t caused by environmentalists foolishly restricting supply and anyone who tells you that should not be allowed anywhere near Sacramento. Like you stated yourself, it was badly executed deregulation that led to the crisis. However, fraud and political paralysis exacerbated it. Your account about price caps is close with a few flourishes, but my clarification wouldn’t really change the fact that the price ceilings promoted a massive amount of demand when there wasn’t enough supply to go around. None of that changes how erratically the spot markets were behaving due to the massive gaming by energy traders and a lack of long-term contracts for a number of large buyers of electricity. (By the way, the California Power Exchange only dealt in next-day energy trading. The California Independent System Operator handled the real-time trading which had none of this nonsense you’ve been talking about.) Californian utilities were required to buy power on these real-time markets to serve their customer despite the high price and the rate caps. Other deregulating states like Pennsylvania mandate utilities to have a diverse sources of energy to ensure reliability.

LA Times, really?

http://claremontconservative.com Charles C. Johnson

I’d congratulate you on your time spent in D.C., but I really mustn’t let you browbeat me into agreeing with you. I’ve perhaps read more about electricity than you have, especially early twentieth century efforts at national grid electrification and I’ve been a good friend of Lynne Kiesling at Knowledge Problem for over a year. In short, I think my energy creds stack up.

I fail to see how it was deregulation at all, given what I laid out in the past post.

I’m sticking by my statement about how mandates led to a warped energy market that continues to be anything but free market and that one of the fastest ways to meet our energy needs would be allow companies to build more power plants. (Right now they already have to keep with state run power plants, kind of like how Obama wants health care to operate.)

They’re more interested in gaming the system because they don’t know if the entire system might change. Who would blame them for eschewing long term investments?

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