Ok. So I’m starting a new GD thread. It seems to have gotten a little slow around here, at least in the threads I’ve been participating in. Everyone keeps reaching some kind of agreement or truce. So I wanted to start something new. I’ve been thinking about it. Maybe on how homosexual murderers who kill straight gay-baiters shouldn’t serve any jail time. Nah, not controversial enough.
Then I read an artcle in today’s Chronicle. True, not the greatest paper in the world (or even in San Francisco), but it’s passable.
The article was on how much deregulation was costing the average consumer in San Diego. This is a pretty big issue here. Deregulation is coming up in SF, we also have a MUD issue that might or might not be on the ballot (SF politics are so convoluted). There’s also the whole issue of rent control. With opponents saying that the reason rents are high is because of regulation. Well, here you go, deregulation causes prices to rise. So the debate is, is it really good for the common person to deregulate and privatize industries?
Here is the article for reference.
Deregulation of Electricity
also in I think a related note, here is an article on the failure of privatized schools in SF.
Edison Sucks
There are two kinds of “deregulation”:
[ol]
[li]Removing legal price controls, and[/li][li]Removing legal barriers to competition.[/li][/ol]
The bigwigs who own the local “natural monopolies” are very much in favor of the 1st type of deregulation, but against the 2nd type. Once in a while, they get their way – thus getting to eat their cake and have it too.
Incidentally, the deregulation of long distance telephone service has resulted in a steady price drop over the last two decades.
I have a friend who works in the industry (low man on the totem pole, so there’s not a lot in it for him if prices stay high), who says that it is a ** very very very bad idea. ** I wish I could remember the arguments against it (this being #2 we’re talking about here–nobody wants #1), but I can’t. So I’ll email and post it here, if he deigns to reply. Get some inside info, as it were.
** Oldscratch: ** you’re creeping me out; it wasn’t 30 minutes ago I was thinking about this issue and wondering when it would get brought up.
Oh yeah. Rent control works so well in NYC. There’s an abundance of safe, affordable housing. Right.
In NYC they semi-deregulated recently. Meaning, for as long as you stay in said apartment, the price controls still are in effect. Minute you leave, price controls are off and its free market pricing. Whats happened to the cost of apartments here you ask? Shot thru the roof. A small apartment now costs as much as a 2 bedroom house. So I would have to say based on that, it is a VERY bad idea.
What gets me about the landlords in SF, is their blatant dishonesty. They claim that rent-control takes away the incentive for building new housing. Get rid of it, and we will build more apartments. Of course, they neglect to mention that rent-control only applies to buildings built before 1978. In other words it wouldn’t apply to anything they build.
Of course if they told the truth, no one would support them. as it is very few do. SF, I believe has the highest concentration of renters in America, only 20% of residents actually own homes. I think that number’s correct.
If by “SF” you mean San Francisco, then there’s another problem – there ain’t nowhere left in San Francisco to build anything. Homes are already crammed together so tightly there isn’t any space between them. The only direction to build is “up” – i.e. build taller buildings. And in order to build a taller building, you have to evict the people living in the short building that’s sitting on your would-be construction site. You can’t evict people in rent controlled neighborhoods just because you want to build something there.
Well the electricity deregulation issue is right up my alley as I work for one of the major California Utilities right at the heart of the issue daily.
I am not sure how much I want to get into this, because it is an extremely hot topic politically.
The bottom line is I think deregulation can work, but it is not easy and California being really the first state to go all out really mucked it up. ALbeit with good intentions they just had no good precedent to work off of. The problem is not that this happened, but people are more concerned with pointing fingers then trying to fix it.
I note that the water supply in either London or all of England was deregulated recently. The pipes are now full of cracks and the system wastes half of its intake water, because it’s cheaper to absorb the waste than to fix the system. This is causing very serious environmental concerns.
Oh! A favorite topic of mine.
Deregulation started during the 80s, and has on the whole been very bad for poor and middle class Americans. Electric, trucking, cable tv, and railroad deregulation are examples of the bad ones. The only good deregulation has been long distance telephone rates, and even this is mixed.
Rent control, on the other hand, is very mixed. The only places that I am familiar with that have rent control are New York and San Francisco. These are local regulations and the results have been very mixed. I think most of the problems with rent regulation in these areas has been the result of bad regulation, but some regulation in these cities is necessary. The basic problem is how to ensure the market produces a large number of available housing units, and at the same time ensure that there is affordable housing for the maids, policemen, nurses, etc… The cities can’t function without these people, but economic pressure drives the rents sky high.
I’ll be back tommrow with stats and solutions. Must sleep now.
Great topic.
The UK went through a fit of privatisation in the 1980s, as a pet policy of Margaret Thatcher. She was heavily influenced by ideas of laissez-faire economics, and also driven by the idea that nationalised industries were a hotbed of anti-Conservative trade union activities.
The privatised industries (water, electricity, gas, rail, telecoms) have, I think without exception, turned enormous profits. The service has not generally improved, and what few improvements have been made have often been grudgingly after prodding by government regulators. For example, British Telecom has successfully dominated the telecoms market (can you say ‘monopoly’?) to the extent that it is only now considering unmetered local calls as the telecoms regulator has started grumbling.
The rail network was divided up into around 25 local train operating companies (TOCs) and Railtrack, the company responsible for maintaining the physical rail network and stations. The result has been, in my opinion, a lessening of safety (as the TOCs increase profits by rejecting automated train braking systems - cf. the Paddington and Southgate rail disasters) and service - the unpredictability, lack of capacity and poor quality of the service offered by Richard Branson’s Virgin Trains is taking on legendary proportions.
Privatisation / deregulation is a hugely political issue in the UK because it’s historically a defining difference between the major parties. However, at the moment further electricity deregulation is underway (electricity will shortly be bought and sold by franchises like futures), and the Labour government is pushing for the partial privatisation of the London Underground and the full privatisation of the National Air Traffic Control Service (NATS).
In my opinion, privatisation has many theoretical benefits - competition driving down prices, and the like - but in the UK, in practice, the drive for profits has usually overruled this.
> the drive for profits has usually overruled this
That’s funny, because to use phone service as an example, the countries that don’t allow long-distance competition have much higher prices than those who do. Competition will almost always result in lower prices.
Competition will almost always lead to lower prices?
This is something fans of deregulation always say. Is there any proof that deregualtion leads to this? Any scientific studies?? Or is this just one of those “facts” that we are all supposed to accept. Likewise is the truth that private companies are more efficient. BULLSHIT! Give me some proof. Show me that the private sector can do a better job.
But how could this possibly be tested? You’d need two carbon-copy countries, each exactly alike except in that one had deregulated phone service, and one didn’t. And they would need to be unaware of each other.
Guess we’ll never know, will we? 
Personally, my long distance phone bill did drop quite a bit (30-40%) after deregulation. But that was then. Cellular service still ain’t cheap.
Peace,
mangeorge
Exactly mangeorge. Yet conservatives act as if it’s a commonly known fact. I simply want some credible arguments from them. It’s always “of course we have to privatise. As everyone knows, the private sector works better than government.”
Of course deregulation lowers prices and makes things more efficient–the price goes down, but the service goes down twice as mcuh. You end up paying 1/2 for 1/4 of what you got before. Everytime it happens, companies cut corners, pollute more, and generally fuck people over. The aforementioned water in London thing is a good example–it’s cheaper to just fuck around with the environment and the city’s foundation. I really wish that silly putz friend of mine would write bad–then I would have all the arguments laid out in line by somebody with inside knowledge…as it is, I have to think on my own…OUCH 
Ok, so the guy I know in the buis, as is were, wrote beack. Here’s his email (excuse the spelling–he sucks at it):
So that’s the word from a person who’s been there.
Apparently, so do I
Not much time again today. Here is a series of links to anti -deregulation atricles. The magazine is admittedly leftist.
http://zena.secureforum.com/znet/ZMag/articles/june95bacon.htm
http://zena.secureforum.com/znet/ZMag/articles/hartjuly97.html
http://zena.secureforum.com/znet/ZSustainers/ZDaily/1999-10/8schechter.htm
http://zena.secureforum.com/znet/ZSustainers/ZDaily/1999-03/mar_14hightower.htm