So What’s the Lesson?
Charles Pinning’s op-ed in today’s Providence Journal may present an awkward blend of maudlin setting and ideological sneer, but perhaps it offers a chance for productive conversation. Pinning puts the following in the mouth of an older male character from Providence’s west side, speaking of the regular schmoes whom his elderly sweetheart just encountered at the supermarket (emphasis added):
“Right — they’re always kept off-balance. It is the goal of corporations to do this. Deny traction, and you keep people herky-jerky, running in place and churning profits for you. Listen to this:” (He picked up the newspaper.)
“August 27, Business section, front page, headline: ‘National Grid asks rate hike of about 5 percent.’ It goes on to say . . . ‘National Grid also wants the Public Utilities Commission to restructure distribution rates in a way that would protect the company from revenue losses that result from the conservation efforts of its customers.’
“Got that? The raping has been so blatant for so long that National Squid feels it can come straight out and essentially say, ‘You can conserve all you want. We’re still going to squeeze the same amount of money out of you! We’re just shifting the charges to another area.’
“It’s the same thing that the Narragansett Bay Commission is trying to pull by asking the PUC to raise rates because of revenue loss due to customers’ conserving water over the past three years. People logically think they’re going to save a few bucks by using less water or less natural gas — but no! The utilities . . . Narragansett Bay . . . they’re petitioning the PUC to get the same level of bucks they want no matter how much water or gas you use. Where’s the incentive to conserve? We might as well keep nice and cozy and warm, or use as much water as we want because they’re gonna get the same amount of money, whether you use five therms of gas or five hundred; a thimbleful of water or a hundred gallons a day!
“How do I make it clear to people that these corporations have people on a gerbil wheel? That instead of being rewarded for doing the right thing, you will be punished.”
Note the player that is conveniently left out of the condemnation: the Public Utilities Commission, itself — the existence of which gives the evil corporations a limited government body to petition, and the authority of which gives a sheen of legitimacy, even inevitability, to the corporate machinations, should it be persuaded. In the absence of such a group, National Grid might simply enact the rate hikes that it desires, and people would respond by seeking ways to conserve or look elsewhere. At some point, it would become sufficiently profitable for competition to arise (whether direct or with the presentation of an alternative), which safeguard comes with a higher threshold to the extent that market entrants face regulatory hurdles.
Corporations alone are not the enemy, here. Corporations in concert with a limited governing body that is human, and therefore manipulable, create the problem.
That perspective is why such news as the following brings out the conspiracy theorist in me:
The outlines of the plan [to rescue financial institutions], described in conference calls to lawmakers on Friday, include buying assets only from United States financial institutions — but not hedge funds — and hiring outside advisers who would work for the Treasury, rather than creating a separate agency. …
At the end of a week that will be long remembered for the wrenching changes it brought to Wall Street and Washington, Mr. Paulson and Ben S. Bernanke, the Federal Reserve chairman, told lawmakers that the financial system had come perilously close to collapse. According to notes taken by one participant in a call to House members, Mr. Paulson said that the failure to pass a broad rescue plan would lead to nothing short of disaster. Mr. Bernanke said that Wall Street had plunged into a full-scale panic, and warned lawmakers that their own constituents were in danger of losing money on holdings in ultra-conservative money market funds.
People involved in the discussions on Friday said that Mr. Paulson said he did not want to create a new government agency to handle the rescue plan. Rather, he said, the Treasury Department would hire professional investment managers to oversee what could be a huge portfolio of mortgage-backed securities.
The current financial industry is not wholly a free-market animal. It’s a pack of abnormally large beasts nurtured in a particular regulatory environment. And it begins to look awfully convenient that the government that nurtured the creatures will bring their power and responsibilities within its own walls. A quick scan of the economic landscape makes one shudder to think how many industries are evolving in this way.
In other spheres — the social, the religious, the historical — I can at least comprehend the other side’s reasoning, and usually empathize with its motivation. But for the life of me, I cannot understand why subscribers to an ideology so distrustful of people with economic power believe that the answer is to consolidate that power, with other forms, in the hands of an even more limited group.
Absorbing everything under the aegis of Government doesn’t put everybody on equal footing; it puts us within the walls of a political master.