In other words, the economic problem is simple. It is the political problem that gets complicated. The economic problem is how to keep electricity flowing to California consumers and the California economy. The answer is ridiculously easy: Pay for it! That is how we get other things that we want.
But it is not that easy for politicians to admit to the voting public that this whole disastrous farce was brought on by them, when they tried to look like knights in shining armor, rescuing the distressed consumers from the greedy electric companies. Such a devastating admission would not be the way for Gray Davis to get re-elected governor, much less remain viable as a prospect for the Democrats' presidential nomination in 2004.
Instead, we get a flurry of activities and a blizzard of rhetoric and regulations. If you cannot follow all the new government policies in response to the electricity crisis, then that shows that these policies are a great political success. If the public understood, it would be a political catastrophe.
There is no Standard & Poor's for politics. Investors may be warned about economic realities ahead but voters are told political fairy tales that blame electricity companies' "greed" -- greed apparently directed solely at California, but not at any of the other 49 states.
As an economist, I wish that everyone understood the economics and politics of the electricity crisis. On the other hand, as a humanitarian I shudder to think of what they would do if they did.
Do we really want to see blood flowing in the streets of Sacramento? Do we want to see mobs rampaging through the state capital, carrying torchlights and pitchforks, and displaying on pikes the heads of Governor Gray Davis and members of the state public utility commission? No. Ignorance may not be bliss but it may be more