Paul Jacob

If we want electrical power, we'd better let people provide it.

So far, it looks like the professionals haven't yet figured out exactly which renegade electron sparked the cascade of power outages that darkened eight states and part of Canada, though it looks like the problem may have started in Ohio.

Of course, we must look at the forest here, not just the trees or electrons. Everybody agrees that the power grid is getting rusty even as demand for power grows. Everybody agrees we need an upgrade.

Problem is, though, we need a political upgrade too. We need deregulation.

I know, I know. We already "have" deregulation in the power market. That's what "caused" the problem in the first place. All this power freely flowing around the country for the past several years as a result of the deregulated market has been putting an unusual strain on the transmission lines.

But the kind of deregulation that's been taking place is akin to removing a man's handcuffs but keeping him in leg irons, then telling him to go forth and do gymnastics. Sure, he can move around more easily than before, but he's going to trip over a monkey bar eventually.

The other minor problem with the thesis that "deregulation" is the "cause" of the recent blackout is that in 1965 and 1977, when previous sweeping blackouts occurred, Mr. Deregulation was nowhere to be seen. Well, they never caught the Zodiac killer either.

The power grid with all its power plants and transmission lines may be very complex and very interconnected. But this is no reason to favor centrally-planned regulation and subsidies of the power grid. A great many products and services in a modern economy involve very complex chains of production and distribution. The proponents of regulation and central government planning look at such sprawl and see chaos--and say it must be tamped down, hemmed in, "coordinated." The proponents of markets see that, thanks to the information and incentives conveyed by prices and profits, the desired coordination is already happening--and say we better let it keep happening.


Paul Jacob

Paul Jacob is President of Citizens in Charge Foundation and Citizens in Charge. His daily Common Sense commentary appears on the Web and via e-mail.