Since the 1930s U.S. wholesale markets for natural gas and electricty, today totaling over $400 billion annually, are subject to comprehensive regulations that set every price. These laws and regulations remain in effect. Yet, today, electic and gas prices are largely set by free markets, just like those of other commodities. How can this be?
It is a commonly heard impression that most appliances just aren’t as good as they used to be. Even high-end washers don’t wash, showers don’t clean, driers don’t dry, refrigerators don’t cool, and toilets don’t flush as well as the average model did thirty years ago. That this is not just a case of the nostalgic fallacy can readily be confirmed by anyone with access to older, but still functional appliances.
Less well-known is the cause of this decline. The technology to make effective appliances has not be lost. No rare or no longer extant raw material is needed for their construction. Nor has the Great Appliance Maker Cartel finally gotten its act together and started to foist off ever shoddier products at ever higher prices.
The title of this post is the license plate the author is sorely tempted to acquire for the Tesla Model S he has been driving for the last few years.The author of course realizes that in so posting, he’ll cause the hordes of Tesla-driving readers to snap up this plate in all states, thereby frustrating his plan. For that is indeed what his car runs on: coal delivered via high-voltage wires. So the environmental benefits of Teslas are probably non-existent or at least greatly exaggerated.
Moreover, Tesla and its founder Elon Musk have with some justice been criticized for pocketing large subsidies offered by the federal and state governments for electric vehicles. That criticism, while valid, is more properly directed at the politicians for instituting these subsidies, than at Musk for pocketing them.In so far as Musk lobbies for maintenance or extension of these subsidies, he of course bears some contributory guilt. If the government offered large amounts of free cash to the author, he would take it too; as he did, when taking the $7,500 tax credit for Tesla buyers.Some concern has been raised regarding the high cost of fixing dents and scratches on the Model S. That is true because the Model S is mostly made of aluminum, which while stronger and lighter than steel, is also more expensive and harder to repair. But that is a downside that the Model S shares with virtually all cars in its price range.
These points notwithstanding, the Tesla Model S is a very, very good car:More objection can be made to the noun than the adjective. Arguably a Tesla Model S is not so much a car, as a giant iPad that can take you places. This, some discussion elsewhere notwithstanding, is high praise.
Ordinarily, I try to refrain from commenting on matters on which others far better qualified than I have already commented at greater length and with far greater authority. Hence, the low volume of this blog.
Some years ago, I participated in a D.C. Circuit case which involved, among other issues, the question of whether individual New England states could be counted on to voluntarily build reserve electric generation capacity or whether they'd ignore such obligations and just lean on the excess capacity of their neighboring states in times of shortage.1 The telegenic Attorney General of one state assured that the former would most definitely be the case:
Suppliers, PJM, and ISO-NE attempt to resurrect an argument that … states may not be permitted to set individual resource adequacy requirements because they will act parochially, in their own self-interests to “free-ride” on the reserves of other states in the region. … In fact, the New England states' self-interest dictates the same type of cooperation that has produced regional reserve levels in New England for decades[.]
Joint Reply Brief for Intervenors Richard Blumenthal, Attorney General for the State of Connecticut, et al. at 8, Conn. Dep't of Pub. Util. Control v. FERC (D.C. Cir. 2008).
One can imagine my surprise upon now reading the following pronouncement by the same telegenic Attorney General:
Blumenthal to Maine company: Hire Connecticut workers
…
“Workers and businesses in Connecticut need and deserve the benefit of jobs and revenue from this massive construction project, which must move forward as quickly as possible,” Blumenthal said.
“Amtrak's contract award may be final, but its practical effect may be improved by insisting that subcontractors and workers come from Connecticut.”
…
“I am deeply disappointed that Amtrak awarded this huge contract - one of the largest federal stimulus projects in Connecticut - to an out-of-state company,” Blumenthal said. “I will seek assurances that Cianbro will hire Connecticut workers and contractors, and ensure fair wages and equitable working conditions.”
…
“This federal taxpayer-funded project is designed to benefit Connecticut workers and businesses and kick-start the state's economy,” Blumenthal said. “Sending vital stimulus dollars out of state is unacceptable and unconscionable. I urge the company to keep in Connecticut as many stimulus dollars as possible - as Congress and the President intended.”
(emphasis added) Legal NewsLine, Blumenthal to Maine company: Hire Connecticut workers (Jan. 25, 2010).
Claims of comity and willingness to act for the general good rather than parochial interests may serve to attempt to bamboozle federal courts, but one could hardly expect an on-the-make politician to take such things seriously.
1The upshot of course being that all states would engage in this beggar-thy-neighbor strategy, nobody would buy reserve capacity, and in times of shortage the lights would go out all over New England, Tragedy-of-the-Commons style.
[T]he Coalition claims that only a 'a structurally competitive market' qualifies. Id. (emphasis added); accord id. at 11, 22, 23, 24, 28.2Brief of Supplier Intervenors at 8, Public Service Electric & Gas Co. v. FERC (D.C. Cir. 2008).
2 '[They] keep using that word. I don’t think it means what [they] think it does.' William Goldman, The Princess Bride 114 (Harcourt 2007) (1973).
However, this still leaves an Underpants Gnome-sized chasm3 at the core at the center of the California Parties’ argument: The California Parties completely failed to establish any causal connection between propositions 1 and 2.Id. at 8.
3 The industrious underpants-stealing gnomes were introduced to the world by the television program “South Park.” Famously, their business plan consists, in its entirety, of three stages: “Phase 1: Collect Underpants. Phase 2: ? Phase 3: Profit.” Wikipedia, Gnomes (South Park), http://en.wikipedia.org/wiki/Gnomes_(South_Park) (last modified Jan. 2, 2010). The gnomes’ business plan have since become a byword for theories with large logical gaps of which their expositors appear to be blissfully unaware. See, e.g., Editorial, Obama and the ‘South Park’ Gnomes, The Wall Street Journal at A16 (May 26, 2009) (postulating that the television episode may “surpass[] Milton Friedman’s ‘Free to Choose’ as the classic defense of capitalism”); Ezra Klein, The Underpants Gnomes Theory of Single-Payer, The Washington Post Blog (June 26, 2009), http://voices.washingtonpost.com/ezra-klein/2009/06/the_underpants_gnomes_theory_o.html. So too here: The California Parties proceed, as if blissfully unaware, to propound a theory in this case that totally lacks any causal connection—or even any attempt to draw a causal connection—between the successive steps of argument. In actuality, of course, the California Parties are keenly aware of these fatal flaws but apparently have no choice other than to pretend that they simply are not there.
Update on July 12, 2010: FERC adopted the position argued in the brief and dismissed all claims by California against my client and even went on to quote the underpants gnomes. Initial Decision on Motions for Summary Disposition at P 221.