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There shouldn't be a profit motive attached to basic services like electricity, policing (private prisons), or medicine. These functions are best handled by gov

There shouldn't be a profit motive attached to basic services like electricity, policing (private prisons), or medicine. These functions are best handled by government because they should be services available fairly and equitably to every single citizen. Capitalist profit seeking necessarily excludes some individuals or generates perverse incentives (private prisons).

tomp 6y ago
This is exactly the wrong mentality that leads to exactly the wrong outcomes (e.g. the title of this article). The goal of “basic services” should never be cheap, but good instead (i.e. quality, not price). And that is what should be regulated (e.g. metrics like “health outcomes” in medicine, “number of blackouts” in power distribution, ...). Then, the market should take over, to optimise for price (== profit), because that also optimises for social well-being (e.g. in medicine, “cheaper” directly leads to “more affordable healthcare” and indirectly to “healthier population”). The idea that “profit” shouldn’t be optimised or that the government should take over is obviously misguided, because there is no guarantee or reason why the government would maintain quality if the free market cannot (instead of “profit” they would optimise for “employment” or “corruption” or “size of bureaucracy”).
- CaptainZapp 6y ago
  > Then, the market should take over, to optimise for price (== profit) The problem with that is that it's far more attractive for a private entity to book profits, instead of investing into their infrastructure. Thinking about it, the Texas disaster seems to be quite a nice illustration of that.
  - tomp 6y ago
    So the metrics should measure the quality of the infrastructure and regulation should reflect that. Without the proper metrics, there’s no guarantee that the government will invest in infrastructure either (instead of, say, corruption - paying outrageous amounts of money to friends&family for subpar service).
Darmody 6y ago
That sounds ok until you hears about state companies and how the run. I was born after the communism fell in the eastern block and we didn't have blackouts every now and then, we had electricity every now and then. Blackouts were the rule. I'm pro capitalism, I think companies work better when there's a profit to be made and I also believe the state should hold a share in what is called "natural monopoly" to keep things on track if it's necessary.
refurb 6y ago
CA very tightly regulates PG&E the “private” company charged with running the electric and gas utilities in Northern CA. You can search for the minutes of the public utility commission’s decisions on budgets. They micromanage down to costs of replacing fences around facilities. The result is a massive cluster fuck that has killed dozens in the state.
bagacrap 6y ago
If there were no profit motive for medicine, we wouldn't have therapeutics. Anyone who invents a cure for cancer deserves to be paid handsomely imo.
heyflyguy 6y ago
In the most altruistic sense, I would love to believe you. Things like the VA, the FAA, the USPS all point me to Milton Friedman's 4th quadrant of spending money. Quality does not equal efficiency or price.
- minikites 6y ago
  I don't understand the problem with the FAA but the VA and USPS have been deliberately sabotaged in the past to "prove" the political end you state in your post.
  - mannykannot 6y ago
    The FAA is often at odds with the NTSB about how to keep aviation safe. The streamed hearing of the inquiry into the crash that killed Kobe Bryant is a rare example of that entering the public arena. On the other hand, commercial aviation has become unprecedently safe, so it is not like the FAA is making a mess of things in general. Nevertheless, the 737 Max debacle has revealed an unhealthy level of regulatory capture.
  - jacob2484 6y ago
    Who do you think is more efficient in terms of utilizing resources, Amazon delivery or USPS, a private hospital vs a public one /VA? There is no reason what so ever to strive to cut waste, as bureaucrats know they'll be getting paid either way. So in all cases it's always "we need more money" at the taxpayers expense. Not sure where this notion that government will deliver services in a more efficient ways come from. As the poster above said, there needs to be middle ground.
    - AnIdiotOnTheNet 6y ago
      > Not sure where this notion that government will deliver services in a more efficient ways come from. All the countries where governments deliver healthcare and it is significantly more efficient than the US system?
      - 6y ago
gruez 6y ago
>There shouldn't be a profit motive attached to basic services like [...] what about food, shelter, and clothing? Those are all privatized and arguably more important than electricity or medicine.
- minikites 6y ago
  Excellent point, there should be government-provided options (not the only options, that's clearly infeasible) or subsidies for those as well, for exactly the reasons you state.
  - ed25519FUUU 6y ago
    You don’t have to speculate on what life is like in conditions you’re describing. There’s tons of first hand accounts of life in East Berlin behind the iron curtain, where the government “provided” food, sheltered, and clothing.
    - minikites 6y ago
      If it's not competitive with the current "capitalist" offerings in those areas, people won't choose them unless necessary. The only reason we have hunger and homelessness in a nation as wealthy as the USA is through choice, not lack of resources.
- pupppet 6y ago
  It’s also a lot easier to shop around for those goods and services.
- bilekas 6y ago
  There's a difference between privatization and extortion.. Also the `whataboutism` isn't productive. There's a clear need for regulation. The customers shouldn't have to foot the bill for the companies lack of investment in their own infrastructure even after 11 years ago it was advised they had to winterize.. Also customers don't have the choice to choose an 'on-the-grid' supplier.. So ?
bshep 6y ago
I grew up in Puerto Rico, the power company there is run by the government, and serves a counter example. There are many articles about the age of the infrastructure and how it collapsed after Maria and the Earthquake. Of course part of the problem is poor management by the government and uncontrolled acquisition of debt. There must be some middle ground that works.
- deleted 6y ago
  [deleted]
- crote 6y ago
  An approach some countries use is to operate it like a company, but have it fully government-owned. If, say, every county it serves owns a share of the company, you set up a structure in which it isn't supposed to generate a profit: shareholders can't run it into the ground for monetary reasons. On the other hand, being independent from the government itself makes it less vulnerable to corruption and harmful interference.
- torwayburger 6y ago
  I grew up in Norway. As a grid customer I could shop around for the best power company that fit my situation (e.g. solar? Apartment?). Norway is covered in snow 8-9 months of the year. I think what you're describing is a problem with money not reaching infrastructure investment locally for whatever reason: not public owned infrastructure issues in general.
  - bshep 6y ago
    Its a complicated subject, the power company is a mandated monopoly, its fully owned by the government. In the 50s or so the infrastructure was created, including power plants etc, it was a profitable venture for the government, so they borrowed against the profits of the energy company, then failed upgrade/update any infrastructure. Add to to that the retirement pensions of all the people which they did not fund and it creates a big problem. So now as it stands the energy company is in debt ( technically the government owes the energy company money but the government is insolvent ) and they are trying to sell it to a private entity. Also if you are wondering why anyone would want to get a private pension plan instead of a 401k, well you werent allowed to put your money in a 401k ( same thing happened to the teachers by the way ). It actually very sadto hear the stories of people that worked theur whole life and have nothing to show for it due to the greed of politicians.
Retric 6y ago
Capitalism works really well when their are penalties for failure. Sell a terrible car and people buy a different product, but when you have local monopolies like rural hospitals you always run into issues. With Texas electricity markets you make more money if everyone is generating 1/2 power in an emergency when the market hits it’s legal maximum. That set’s up very poor incentives. It all comes down to this: ERCOT can be more susceptible to wholesale price spikes because it does not have a capacity market, which pays power plants to be on standby during peak demand and weather emergencies, for example. ERCOT’s model means consumers are not paying for generation that may never be called into action. https://www.reuters.com/article/us-electricity-texas-prices-idUSKBN2AF19A https://www.reuters.com/article/us-electricity-texas-prices-... PS: It’s an often reported lie that the price was set by regulators, they set a limit well before the storm and the market I created the price to 9$/kWh and then was capped by that limit. If sufficient generation was online the wholesale price would have remained anything below that 9$.
- gruez 6y ago
  > With electricity markets you make more money if everyone is generating 1/2 power in an emergency. The per-megawatt hour prices might be higher, but is there evidence that overall revenue is higher? I understand that supply is down as well, so overall revenues might be worse or equal to normal levels. Furthermore, people in yesterday's griddy thread mentioned that currently the price is fixed at $9/MGWh by state regulators, which isn't exactly a free market.
  - jlmorton 6y ago
    Note that it's $9000/mWh, or $9/kWh. That's a regulated maximum wholesale price, not a fixed price.
    - gruez 6y ago
      >That's a regulated maximum wholesale price, not a fixed price. Seems to be a price floor and/or set price. > Texas’ Public Utility Commission, appointed by Abbott, raised the wholesale market price of electricity to $9 per kilo-watt hour — a 7,400% increase over the average 12 cents per kilo-watt hour — in response to rising demand. The hope was power generators would be enticed to produce more electricity. https://news.ycombinator.com/item?id=26244895 https://news.ycombinator.com/item?id=26244895
smaddox 6y ago
I think there's a place for privately operated power generation. It doesn't have to be one or the other. There should be some avenue for the profit motive to produce effeciency gains. There needs to be effective regulation, though. And perhaps the amount of regulation needs to be proportional to the fraction of power generation that is privately operated.
- imglorp 6y ago
  Yes. Most of the US has privately operated with close regional oversight usually called a public utility commission for gas, electric, water, landline, and sort of for cable. It approves rate changes, assessments for big projects etc. The system works very well overall, avoiding both extremes of full government and full private. My rates are reasonable and I've very rarely had outages of anything over decades. Edit. Cable is the exception. They are a PUC approved monopoly or duopoly with intensely abusive customer experience, in most places.
- 0_____0 6y ago
  The issue isn't public vs private, it's the combination of a profit motive + inelastic consumer demand + lack of alternatives. It would make sense to run electricity as a public enterprise, to run it as a deeply regulated private one, or run some kind of mix - public ownership of distribution, private ownership of generation.
- orwin 6y ago
  Power generation != power distribution. You can (and should honestly, if you're liberal) have privately owned power generation, but the infrastructure and network? Its a bad idea. Private road, private rail, private lines... The same way, you can have water extraction and cleaning privately owned (and some say you should), but its dangerous to let private sector run the water infrastructure. And also, if any power generation company is caught lobbying against public infrastructure funding or nuclear power plant funding, kill them. force sell or something. You can't have private owners with skin in the game lobbying public spending.
- ed25519FUUU 6y ago
  For the price I paid for power in Silicon Valley (32c kWh) versus what Texas pays, I could have taken the extra money and purchased a spare generator and a large fuel tank, and then enjoyed a fraction of my current bill while still being prepared for a blackout. Or took the different and invested it in the cost of solar panels and a battery. We’re taking about almost $100 a month difference.
bob1029 6y ago
I agree with some hard regulatory angle on the power grid, especially considering the very unique technological constraint of maintaining the required frequency. The thing I am concerned about is masking market forces from consumers. Potential "band-aid" solutions for the current approach might include adding a capacity market, or requiring that all consumers operate on a variable rate plan in order to more fairly mediate demand vs supply. Customers with fixed rate plans in Texas had no incentive to not run things like electric clothes dryers or resistive pool heaters while others were literally freezing to death. If you think about fundamentals of consumer behavior and markets, a fixed rate electric plan is like buying an insurance policy or options contract on some underlying security. If you have a lot of derivatives in play, bad things almost always happen regardless of the underlying asset types.
- michaelt 6y ago
  I'm not sure that variable-rate plans would actually have cut demand all that much. I mean, I agree variable rates could stop people running clothes dryers, close down industrial users and so on. But the remaining demand would be extremely price-inelastic; How much would you pay to stop your pipes bursting? $3000? $10,000? More? So long as the amount of power being generated is less than the amount of power needed to prevent anyone's pipes freezing someone's pipes are going to freeze, and no amount of shuffling around who gets the power is going to change that fact.
  - bob1029 6y ago
    I agree with inelastic demand. There is certainly a bare minimum level beyond which we still have a crisis. That said, I think the higher order effects of a market regulated to require more responsive rates could lower this threshold. For instance, if every homeowner in texas might get stuck with an expensive winter heating bill because of new regulations around rates, we would consider requiring all new construction use gas furnaces where possible. As it currently stands, I was just talking to a friend who got taken to the cleaners because his brand new construction uses resistive/heat pump for heating, despite the trivial & cheap availability of natural gas.
ike0790 6y ago
there should some sort of public/private partnership... when governments monopolize industries and there aren't market forces at play at all, it tends to result in a sub par good/service.
jinkyu 6y ago
have you ever received good service from the government? I'll wait.
deleted 6y ago
[deleted]
HenryBemis 6y ago
Yes, "but", capitalism! How dare the State/Gov get in the way of private corporations? Why would the State/Govoffer something for free (or reasonably priced?). What makes it more "fun" (nothing funny about the ordeal and the deaths in Texas)(btw I've been in Texas many many times - wonderful place, great people!) is that Texans are very conservative on one hand, and very pro-super-aggressive-capitalism on the other hand. Which makes no sense. Seth Meyers said something on his show a couple nights ago: if you tell the antilopes that they are free to wander around in the zoo, it is only fair to tell them that the lions will ALSO be free to wander around in the same zoo. Seeing this from Europe, I find it brutally ironic when people lose "free" to a corporation (weather reports, software to do your taxes, etc.) You (citizens of the USA) can do 10 things wrong to get yourselves to this predicament, and you take these 10 steps with acrobatic accuracy.
ryanSrich 6y ago
I generally agree but I can’t in good faith trust anything the US government does. Maybe local and state governments should run free healthcare as many seem to function much better than the federal government, but there are also state governments that are corrupt as well. Until we fix the government corruption I can’t get on the free healthcare for all train. I already pay nearly 50% of my income in taxes with little to no short or mid term benefit. Jacking that up even more for basic health coverage doesn’t feel worth it. If you’re wondering what I mean by corruption, just look at the latest Covid bill that sends billions to other countries and sneaks in random bullshit about internet streaming...into a pandemic relief bill. This isn’t a your side vs my side issue. It’s all bad. They’re all corrupt.
- AnIdiotOnTheNet 6y ago
  > I already pay nearly 50% of my income in taxes ...I am curious as to the math behind that. The highest federal income tax bracket in the US is 37%. Only income over $523,601 (as of 2021) is taxed at that rate.
  - kgwgk 6y ago
    Payroll tax, state and local income tax, property tax, sales tax... Not sure about "over 50%" but "nearly 50%" could be "over 40%".
  - ryanSrich 6y ago
    Federal and State income tax alone bring it to 46.9%. Add in property tax and it’s over 50%. Also it’s not technically income, but there’s also cap gains tax that I pay almost every year. All in all, Americans pay an insanely high tax for what we get. Our tax dollars go to corrupt politicians that use the money on foreign aid and starting wars, defense contractors and military. It’s disgusting.
- orwin 6y ago
  Kill companies caught corrupting politicians. A gas to electricity owner corrupting an official to disapprove a nuclear plant project? Force sell the company. A water company caught paying a city concil to reduce spending on water infrastructure/quality control? Kill the company. It is easier than running through corrupt politicians.

tomp 6y ago

This is exactly the wrong mentality that leads to exactly the wrong outcomes (e.g. the title of this article). The goal of “basic services” should never be cheap, but good instead (i.e. quality, not price). And that is what should be regulated (e.g. metrics like “health outcomes” in medicine, “number of blackouts” in power distribution, ...). Then, the market should take over, to optimise for price (== profit), because that also optimises for social well-being (e.g. in medicine, “cheaper” directly leads to “more affordable healthcare” and indirectly to “healthier population”). The idea that “profit” shouldn’t be optimised or that the government should take over is obviously misguided, because there is no guarantee or reason why the government would maintain quality if the free market cannot (instead of “profit” they would optimise for “employment” or “corruption” or “size of bureaucracy”).

CaptainZapp 6y ago
> Then, the market should take over, to optimise for price (== profit) The problem with that is that it's far more attractive for a private entity to book profits, instead of investing into their infrastructure. Thinking about it, the Texas disaster seems to be quite a nice illustration of that.
- tomp 6y ago
  So the metrics should measure the quality of the infrastructure and regulation should reflect that. Without the proper metrics, there’s no guarantee that the government will invest in infrastructure either (instead of, say, corruption - paying outrageous amounts of money to friends&family for subpar service).

Darmody 6y ago

That sounds ok until you hears about state companies and how the run. I was born after the communism fell in the eastern block and we didn't have blackouts every now and then, we had electricity every now and then. Blackouts were the rule. I'm pro capitalism, I think companies work better when there's a profit to be made and I also believe the state should hold a share in what is called "natural monopoly" to keep things on track if it's necessary.

refurb 6y ago

CA very tightly regulates PG&E the “private” company charged with running the electric and gas utilities in Northern CA. You can search for the minutes of the public utility commission’s decisions on budgets. They micromanage down to costs of replacing fences around facilities. The result is a massive cluster fuck that has killed dozens in the state.

bagacrap 6y ago

If there were no profit motive for medicine, we wouldn't have therapeutics. Anyone who invents a cure for cancer deserves to be paid handsomely imo.

heyflyguy 6y ago

In the most altruistic sense, I would love to believe you. Things like the VA, the FAA, the USPS all point me to Milton Friedman's 4th quadrant of spending money. Quality does not equal efficiency or price.

minikites 6y ago
I don't understand the problem with the FAA but the VA and USPS have been deliberately sabotaged in the past to "prove" the political end you state in your post.
- mannykannot 6y ago
  The FAA is often at odds with the NTSB about how to keep aviation safe. The streamed hearing of the inquiry into the crash that killed Kobe Bryant is a rare example of that entering the public arena. On the other hand, commercial aviation has become unprecedently safe, so it is not like the FAA is making a mess of things in general. Nevertheless, the 737 Max debacle has revealed an unhealthy level of regulatory capture.
- jacob2484 6y ago
  Who do you think is more efficient in terms of utilizing resources, Amazon delivery or USPS, a private hospital vs a public one /VA? There is no reason what so ever to strive to cut waste, as bureaucrats know they'll be getting paid either way. So in all cases it's always "we need more money" at the taxpayers expense. Not sure where this notion that government will deliver services in a more efficient ways come from. As the poster above said, there needs to be middle ground.
  - AnIdiotOnTheNet 6y ago
    > Not sure where this notion that government will deliver services in a more efficient ways come from. All the countries where governments deliver healthcare and it is significantly more efficient than the US system?
    - 6y ago

gruez 6y ago

>There shouldn't be a profit motive attached to basic services like [...] what about food, shelter, and clothing? Those are all privatized and arguably more important than electricity or medicine.

minikites 6y ago
Excellent point, there should be government-provided options (not the only options, that's clearly infeasible) or subsidies for those as well, for exactly the reasons you state.
- ed25519FUUU 6y ago
  You don’t have to speculate on what life is like in conditions you’re describing. There’s tons of first hand accounts of life in East Berlin behind the iron curtain, where the government “provided” food, sheltered, and clothing.
  - minikites 6y ago
    If it's not competitive with the current "capitalist" offerings in those areas, people won't choose them unless necessary. The only reason we have hunger and homelessness in a nation as wealthy as the USA is through choice, not lack of resources.
pupppet 6y ago
It’s also a lot easier to shop around for those goods and services.
bilekas 6y ago
There's a difference between privatization and extortion.. Also the `whataboutism` isn't productive. There's a clear need for regulation. The customers shouldn't have to foot the bill for the companies lack of investment in their own infrastructure even after 11 years ago it was advised they had to winterize.. Also customers don't have the choice to choose an 'on-the-grid' supplier.. So ?

bshep 6y ago

I grew up in Puerto Rico, the power company there is run by the government, and serves a counter example. There are many articles about the age of the infrastructure and how it collapsed after Maria and the Earthquake. Of course part of the problem is poor management by the government and uncontrolled acquisition of debt. There must be some middle ground that works.

deleted 6y ago
[deleted]
crote 6y ago
An approach some countries use is to operate it like a company, but have it fully government-owned. If, say, every county it serves owns a share of the company, you set up a structure in which it isn't supposed to generate a profit: shareholders can't run it into the ground for monetary reasons. On the other hand, being independent from the government itself makes it less vulnerable to corruption and harmful interference.
torwayburger 6y ago
I grew up in Norway. As a grid customer I could shop around for the best power company that fit my situation (e.g. solar? Apartment?). Norway is covered in snow 8-9 months of the year. I think what you're describing is a problem with money not reaching infrastructure investment locally for whatever reason: not public owned infrastructure issues in general.
- bshep 6y ago
  Its a complicated subject, the power company is a mandated monopoly, its fully owned by the government. In the 50s or so the infrastructure was created, including power plants etc, it was a profitable venture for the government, so they borrowed against the profits of the energy company, then failed upgrade/update any infrastructure. Add to to that the retirement pensions of all the people which they did not fund and it creates a big problem. So now as it stands the energy company is in debt ( technically the government owes the energy company money but the government is insolvent ) and they are trying to sell it to a private entity. Also if you are wondering why anyone would want to get a private pension plan instead of a 401k, well you werent allowed to put your money in a 401k ( same thing happened to the teachers by the way ). It actually very sadto hear the stories of people that worked theur whole life and have nothing to show for it due to the greed of politicians.

Retric 6y ago

Capitalism works really well when their are penalties for failure. Sell a terrible car and people buy a different product, but when you have local monopolies like rural hospitals you always run into issues. With Texas electricity markets you make more money if everyone is generating 1/2 power in an emergency when the market hits it’s legal maximum. That set’s up very poor incentives. It all comes down to this: ERCOT can be more susceptible to wholesale price spikes because it does not have a capacity market, which pays power plants to be on standby during peak demand and weather emergencies, for example. ERCOT’s model means consumers are not paying for generation that may never be called into action. https://www.reuters.com/article/us-electricity-texas-prices-idUSKBN2AF19A https://www.reuters.com/article/us-electricity-texas-prices-... PS: It’s an often reported lie that the price was set by regulators, they set a limit well before the storm and the market I created the price to 9$/kWh and then was capped by that limit. If sufficient generation was online the wholesale price would have remained anything below that 9$.

gruez 6y ago
> With electricity markets you make more money if everyone is generating 1/2 power in an emergency. The per-megawatt hour prices might be higher, but is there evidence that overall revenue is higher? I understand that supply is down as well, so overall revenues might be worse or equal to normal levels. Furthermore, people in yesterday's griddy thread mentioned that currently the price is fixed at $9/MGWh by state regulators, which isn't exactly a free market.
- jlmorton 6y ago
  Note that it's $9000/mWh, or $9/kWh. That's a regulated maximum wholesale price, not a fixed price.
  - gruez 6y ago
    >That's a regulated maximum wholesale price, not a fixed price. Seems to be a price floor and/or set price. > Texas’ Public Utility Commission, appointed by Abbott, raised the wholesale market price of electricity to $9 per kilo-watt hour — a 7,400% increase over the average 12 cents per kilo-watt hour — in response to rising demand. The hope was power generators would be enticed to produce more electricity. https://news.ycombinator.com/item?id=26244895 https://news.ycombinator.com/item?id=26244895

smaddox 6y ago

I think there's a place for privately operated power generation. It doesn't have to be one or the other. There should be some avenue for the profit motive to produce effeciency gains. There needs to be effective regulation, though. And perhaps the amount of regulation needs to be proportional to the fraction of power generation that is privately operated.

imglorp 6y ago
Yes. Most of the US has privately operated with close regional oversight usually called a public utility commission for gas, electric, water, landline, and sort of for cable. It approves rate changes, assessments for big projects etc. The system works very well overall, avoiding both extremes of full government and full private. My rates are reasonable and I've very rarely had outages of anything over decades. Edit. Cable is the exception. They are a PUC approved monopoly or duopoly with intensely abusive customer experience, in most places.
0_____0 6y ago
The issue isn't public vs private, it's the combination of a profit motive + inelastic consumer demand + lack of alternatives. It would make sense to run electricity as a public enterprise, to run it as a deeply regulated private one, or run some kind of mix - public ownership of distribution, private ownership of generation.
orwin 6y ago
Power generation != power distribution. You can (and should honestly, if you're liberal) have privately owned power generation, but the infrastructure and network? Its a bad idea. Private road, private rail, private lines... The same way, you can have water extraction and cleaning privately owned (and some say you should), but its dangerous to let private sector run the water infrastructure. And also, if any power generation company is caught lobbying against public infrastructure funding or nuclear power plant funding, kill them. force sell or something. You can't have private owners with skin in the game lobbying public spending.
ed25519FUUU 6y ago
For the price I paid for power in Silicon Valley (32c kWh) versus what Texas pays, I could have taken the extra money and purchased a spare generator and a large fuel tank, and then enjoyed a fraction of my current bill while still being prepared for a blackout. Or took the different and invested it in the cost of solar panels and a battery. We’re taking about almost $100 a month difference.

bob1029 6y ago

I agree with some hard regulatory angle on the power grid, especially considering the very unique technological constraint of maintaining the required frequency. The thing I am concerned about is masking market forces from consumers. Potential "band-aid" solutions for the current approach might include adding a capacity market, or requiring that all consumers operate on a variable rate plan in order to more fairly mediate demand vs supply. Customers with fixed rate plans in Texas had no incentive to not run things like electric clothes dryers or resistive pool heaters while others were literally freezing to death. If you think about fundamentals of consumer behavior and markets, a fixed rate electric plan is like buying an insurance policy or options contract on some underlying security. If you have a lot of derivatives in play, bad things almost always happen regardless of the underlying asset types.

michaelt 6y ago
I'm not sure that variable-rate plans would actually have cut demand all that much. I mean, I agree variable rates could stop people running clothes dryers, close down industrial users and so on. But the remaining demand would be extremely price-inelastic; How much would you pay to stop your pipes bursting? $3000? $10,000? More? So long as the amount of power being generated is less than the amount of power needed to prevent anyone's pipes freezing someone's pipes are going to freeze, and no amount of shuffling around who gets the power is going to change that fact.
- bob1029 6y ago
  I agree with inelastic demand. There is certainly a bare minimum level beyond which we still have a crisis. That said, I think the higher order effects of a market regulated to require more responsive rates could lower this threshold. For instance, if every homeowner in texas might get stuck with an expensive winter heating bill because of new regulations around rates, we would consider requiring all new construction use gas furnaces where possible. As it currently stands, I was just talking to a friend who got taken to the cleaners because his brand new construction uses resistive/heat pump for heating, despite the trivial & cheap availability of natural gas.

ike0790 6y ago

there should some sort of public/private partnership... when governments monopolize industries and there aren't market forces at play at all, it tends to result in a sub par good/service.

jinkyu 6y ago

have you ever received good service from the government? I'll wait.

deleted 6y ago

[deleted]

HenryBemis 6y ago

Yes, "but", capitalism! How dare the State/Gov get in the way of private corporations? Why would the State/Govoffer something for free (or reasonably priced?). What makes it more "fun" (nothing funny about the ordeal and the deaths in Texas)(btw I've been in Texas many many times - wonderful place, great people!) is that Texans are very conservative on one hand, and very pro-super-aggressive-capitalism on the other hand. Which makes no sense. Seth Meyers said something on his show a couple nights ago: if you tell the antilopes that they are free to wander around in the zoo, it is only fair to tell them that the lions will ALSO be free to wander around in the same zoo. Seeing this from Europe, I find it brutally ironic when people lose "free" to a corporation (weather reports, software to do your taxes, etc.) You (citizens of the USA) can do 10 things wrong to get yourselves to this predicament, and you take these 10 steps with acrobatic accuracy.

ryanSrich 6y ago

I generally agree but I can’t in good faith trust anything the US government does. Maybe local and state governments should run free healthcare as many seem to function much better than the federal government, but there are also state governments that are corrupt as well. Until we fix the government corruption I can’t get on the free healthcare for all train. I already pay nearly 50% of my income in taxes with little to no short or mid term benefit. Jacking that up even more for basic health coverage doesn’t feel worth it. If you’re wondering what I mean by corruption, just look at the latest Covid bill that sends billions to other countries and sneaks in random bullshit about internet streaming...into a pandemic relief bill. This isn’t a your side vs my side issue. It’s all bad. They’re all corrupt.

AnIdiotOnTheNet 6y ago
> I already pay nearly 50% of my income in taxes ...I am curious as to the math behind that. The highest federal income tax bracket in the US is 37%. Only income over $523,601 (as of 2021) is taxed at that rate.
- kgwgk 6y ago
  Payroll tax, state and local income tax, property tax, sales tax... Not sure about "over 50%" but "nearly 50%" could be "over 40%".
- ryanSrich 6y ago
  Federal and State income tax alone bring it to 46.9%. Add in property tax and it’s over 50%. Also it’s not technically income, but there’s also cap gains tax that I pay almost every year. All in all, Americans pay an insanely high tax for what we get. Our tax dollars go to corrupt politicians that use the money on foreign aid and starting wars, defense contractors and military. It’s disgusting.
orwin 6y ago
Kill companies caught corrupting politicians. A gas to electricity owner corrupting an official to disapprove a nuclear plant project? Force sell the company. A water company caught paying a city concil to reduce spending on water infrastructure/quality control? Kill the company. It is easier than running through corrupt politicians.