A recent trip to Santa Monica, California, provided me with a clear explanation of why Californians, despite all their wealth, talent, and resourcefulness, have the energy supply system of a Third World country. Like so many tiny Latin American dictatorships, or the outer provinces of India, Californians can no longer rely on a steady supply of electricity.
During my trip, the power went out for hours at a time in much of the Los Angeles area, causing traffic accidents, millions of dollars in lost business, and looting. "If we can only have a summer where we’re socked in by fog for most of the day," said one Los Angeles television weatherman, "we’ll all be better off" because of the reduced electricity use. Wonderful.
The next day the media were abuzz with word that the governor of the state was going to hold a news conference to discuss the energy situation. Docile, state-worshipping newscasters seemed convinced that Governor Gray Davis was about to rescue them. The press conference was hilariously funny—funnier than anything I’ve seen on any Hollywood-produced television show in years.
With great solemnity, the governor introduced the state’s "energy czar," a woman with a cheerleader-type voice who cheerily announced that "Californians are very proud—VERY PROUD—of their devotion to alternative energy sources," such as windmills. Accordingly, she was VERY PROUD to announce that the state had assisted in restructuring the payment schedules for a few windmill operators who produce a minuscule amount of electricity .
That’s it. In the midst of a severe energy supply crisis, that was THE BIG ANNOUNCEMENT. The windmills will continue to spin. Californians may sweat to death in the dark this summer, but they apparently are very, very, very proud of being on the far edge of the lunatic fringe when it comes to environmental policy.
Since my throat was feeling a little dry after all that laughing, I decided to stroll down to a nearby Starbucks for some liquid refreshment. I was met by a mob of "protesters" that was blocking the entrance to the establishment. They were holding large signs, warning me that if I ordered a Tall Latte, I just might turn into Frankenstein. No kidding. Their signs read "NO FRANKEN-LATTE." Apparently, someone convinced these young high-school dropout types, all of whom were dressed like bums, that Starbucks used genetically-engineered products that could transform them all into Young Frankensteins. Oh yes, and the "protesters" were also upset that Starbucks apparently engages in (horror of horrors!) free trade.
Later on in the afternoon, I passed by the same Starbucks. The "protest" was over, but I recognized one of the "protesters" who was still sitting on the sidewalk. This time he said to me, "Got any spare change, man?" And to the next person, and the next person . . .
The local media were all over the "protesters," treating them like celebrities. I overheard one local television reporter actually coaching one of them so that they would look better on television and do a better job of promoting their cause.
I wanted to pick up some reading material for the flight home, so my next stop was a Borders bookstore. The checkout girl was wearing a "Dave Mathews Band" T-shirt and had a stack of the band’s CDs piled up next to the cash register. The customer in front of me asked, "Who’s Dave Mathews?" to which the clerk replied, "Oh, he’s the greatest. He’s the only rocker who hasn’t sold out to corporate America. He tells the record companies to shove it."
The local papers were filled with stories of alleged "price gouging" by the electric companies, reminiscent of all the anti-capitalistic conspiracy theories that were spun during the government-induced energy crisis of the 1970s. No mention was made in any of the articles as to why the electric companies do not always "price gouge"— that is, why they waited until this year and ignored all those potential profits. Logic doesn’t really matter with people like this, however; they will always blame the problems caused by government intervention on "evil capitalists."
This attitude is not restricted to high-school dropouts. California’s two senators, Diane Feinstein and Barbara Boxer, have been demanding that the Bush administration impose price controls to "solve" the California energy crisis. Such gross economic ignorance, combined with a knee-jerk insistence that virtually all the state’s problems are caused by malevolent capitalists, guarantees that Californians will continue to suffer from one government-induced crisis after another in the years to come.
Thomas DiLorenzo is a professor of economics in the Sellinger School of Business and Management at Loyola College in Baltimore. See his archive, which includes other pieces on California; read an interview with the author; or send him MAIL.