Isn’t this malfeasance by Cheney when he refused to employ price caps?
My own feeling here, is that this is mephitic claptrappery.
Arguments could be made that:
California lost $30 Billion dollars to Enron’s Schemes.
Enron’s Schemes were illegal manipulations, abusive, coercive hidden monopolistic power behind an opaque regulatory system
Price caps belatedly solved the problem.
Cheney and the rest of the administration were malefactors in delaying the price caps.
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Can you reach any other conclusion than Cheney and his administration owes Gray Davis a check for the amound of the current deficit in California, $30 billion dollars?
OTOH:
Cheney was doing the best job he could, beholden to his ideology.
Enron wasn’t doing anything illegal, nor were Cheney or Bush
Cheney really doesn’t run the government, Bush does.
It’s California’s fault for allowing themselves to be raped.
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If it were up to me, I’d lean towards the side of incarceration. But other arguments might exist. I heard them on some radio show, I forgot which.
ace, in every thread on this, you ignore a massive fact:
The overwhelming portion of the California energy crisis occurred in the year 2000, while Clinton was President. The crisis “stretched into” the year 2001, as one of your links noted, but almost all of the damage was done during the long, hot summer of 2000, with its rolling blackouts and the like.
Taking a stab, probably only about $6 billion of the damage was done on Bush’s (or Cheney’s) watch, while around $24 billion was done under Clinton.
As a final note, it was the Bush Administration, not the Clinton Administration, that finally imposed price caps.
Do you think that Clinton should pay back $24 billion or face incarceration?
I really hate that you keep doing this, Ace. You keep making me defend the Bush Administration, which is definitely something I don’t like doing.
If you hate to keep doing it so much, once in a while provide me a link or a cite. That would be the blue underlined text.
And for another talking point, wouldn’t your argument mean the true egregious and unconscionable behavior occured in the winter, which made it obvious that something was awry and that caps needed to be imposed.
I’m gladdened that you and I are in agreement that it was criminal conduct by at least one administration, and that California was rooked, but I understand you want to apportion the majority of the blame to the Clinton Administration? I disagree there, but sign me up for the investigation! You contact your congressmen, and I’ll contact mine.
A near trebling of prices in two months was plenty of indication, well before the winter, that “something was awry and that caps needed to be imposed.” And all this happened in the summer of 2000.
Again, this was before Bush took office. After the FERC under Clinton refused to impose price caps (though they did impose “soft caps” in December 2000), the FERC under Bush did, in June 2001 (from one of your links).
Anyway, I never said that either administration engaged in criminal conduct, so we are not in agreement there.
I’ve lived in california a long time and I don’t blame anybody from Texas for selling us power at scalper prices. At least they were smart enough to have it to sell. Our boys worked hard to prevent the production of power.
We had price caps in 73 when the gasoline supply failed. That’s what caps do. Caps stop the supply of most anything.
I would make a correction in the way power is supplied. Give us some way to know what power is costing us at the time we’re being billed. I always feel snookered when I get a high utility bill a month after; when I should know the cost before I use it.
Geez. We got computers, after all.
Dammit. The Pit thread where Ace0Spades’s attempts to tar the Bush administration with the Enron scandal was shot down in flames over the fact that the damage he blamed Bush for was caused in the Clinton administration (I recall posting links showing that Enron’s stock had peaked about January 2001, among other tidbits) and where he slinked away without a word, his argument in shreds, has been lost to the great server crash. Those who refuse to learn from their previous mistakes ought to at least be able to have them put on display as a warning to others.
I really have to wonder how you could possibly construe anything that SuaSponte said as indicating that criminal conduct had been done by any administration. He merely pointed out that “damage” was done during the Clinton administration. He also mentioned that price caps were refused by the Clinton administration, without commenting either way as to whether that is to be considered criminal conduct. I find it impossible to believe that anyone could honestly arrive at the conclusion you claim to have.
Sua, your argument contains only a timing caveat, as you say
so you agree the Federal Government fell down, you just disagree about the apportioning of blame.
Your timing argument is both wrong and misguided. It’s wrong because the first rolling blackout weren’t until 2001, conservation efforts allowing California to hang on, if by its fingernails. It’s misguided because my charge of malfeasance by the Bush administration is backed by voluminous cites. Do you have comparable evidence – price spikes don’t cut it – of Clinton malfeasance?
And here was the timeline for as the administration changed:
Dec 15: The Federal Energy Regulatory Commission approves a flexible rate cap plan, but allows power suppliers to charge utilities more if they can prove a higher price is warranted.
Dec. 26: Southern California Edison sues FERC, alleging the agency failed to ensure that wholesale electricity is sold at reasonable rates.
2001
Jan. 4: State regulators approve emergency rate hikes of 7 percent to 15 percent for customers of SoCal Edison and PG&E, who say they have lost billions of dollars because they cannot pass on high wholesale costs to customers. They later warn of bankruptcy and layoffs.
Jan. 16: ISO declares Stage 3 alert as several plants report a shortage of natural gas needed to operate. Edison says it doesn’t have the money to pay $596 million it owes this week.
Jan. 17: ISO orders the first rolling blackouts of California’s electricity crisis
Add this up with the argument that you’ve tactily accepted – that the dismissal of California, the parroting of Energy positions and talking points, the Kenneth Lay apointing of the FERC head Pat Wood – can you come to any other conclusion than the Bush administration were Bad Actors and are guilty of crimes?!
Oh, and Waterj2, please don’t post unfounded, incorrect, uncited assertions. This is the great debates after all – feel free to post in the pit if you want to re-enact your drubbing at my hands.
I knew that bit of poetic license was going to bite me on the ass. No, I don’t agree that the Federal Government “fell down.” And even if it did, chosing an incorrect policy does not equal criminal conduct or an obligation to pay anybody anything.
Actually, you haven’t provided any evidence of Bush administration malfeasance. Cheney got a memo from a contributor and agreed with most of it. So what? Unless that memo said “We at Enron are illegally manipulating the California energy market, and we need your help to continue to do so,” it’s not malfeasance or criminal activity. Nobody thought anyone was doing anything illegal. From your latest link:
As for your timetable, it’s correct as far as it goes, but it doesn’t start early enough.
As for losses, your own latest link states that, as of the time it was written in December 2000, Californians had paid $10 billion in increased energy bills, and that PG&E had, in addition, lost $5 billion due to the energy crisis. That’s $15 billiion of your lost $30 billion - all under the Clinton Administration. And that doesn’t include: (a) the losses incurred by Con Edison or (b) the losses incurred by businesses because of the brownouts and blackouts of the summer, fall and winter of 2000. My original $24 billion estimate of losses incurred during Clinton’s time in office was a WAG, but it actually looks like a good estimate. (And before you misinterpret me again, I’m not accusing the Clinton Administration of malfeasance or criminal activity.)
I haven’t accepted any of your opinions, tacitly or not. And yes, I can come to other conclusions, very easily.
Here they are.
California botched deregulation. Liberalizing wholesale prices while capping retail prices was inherently dangerous.
(a) if wholesale prices go up, the utilities lose their profits and/or take losses because they can’t pass on the increases to consumers;
(b) because the utilities were losing money, the normal market reaction - additional suppliers come in and compete on price, - was diminished because new suppliers would be turned away by the prospect that the utilities wouldn’t be able to pay for the new power.
Enron (and perhaps other energy dealers) took advantage of the distorted market conditions to manipulate the market, likely illegally.
Both the Clinton and Bush Administrations, because price caps incur the severe threat of discouraging new suppliers from entering the market, shied away from imposing such caps. In December 2000, after waiting through six months of extensive blackout and brownouts in California, FERC (the non-Enron tainted FERC) imposed soft caps, which were relatively easily circumvented.
In June 2001, the (Enron-tainted FERC) imposed hard price caps, thus preventing Enron from manipulating the market further and cutting off their ill-gotten gains. (That wasn’t intentional, because FERC didn’t know that Enron was manipulating the market).
In short, the Bush Administration inherited a massive energy crisis from the Clinton Administration. At least $15 billion - and definitely more - had already been lost, with a good chunk of that ending up in Enron’s hands. The Bush Administration, both because of lobbying by Enron and because of its pro-market ideology, tried to avoid imposing further price caps - the same caps the Clinton Administration had avoided imposing. However, by June 2001, with the peak electrical usage of the summer approaching, the markets hadn’t righted themselves (again likely because of Enron’s manipulations), so Bush bit the bullet and imposed caps.
Hmmm… these links all seem to be referring to brownouts due to a heat wave. For example:
“the dimming of the lights was mainly attributed to a spike in air-conditioning usage in the second-hottest season in the West in 100 years”
I don’t see any mention in any of your links of rolling blackouts occurring before 2001. It’s pretty common to have brownouts during extreme weather when everyone has their air conditioner on at the same time, even in a “normal” electricity market. It looks to me like there was some indication that deregulation wasn’t working, but hardly the crisis situation that occurred later, where California clearly asked the Federal govt. for intervention. I don’t remember it being an issue until Bush was president. Do you really think Clinton dropped the ball first?
Hmmm… these links all seem to be referring to brownouts due to a heat wave. For example:
“the dimming of the lights was mainly attributed to a spike in air-conditioning usage in the second-hottest season in the West in 100 years”
I don’t see any mention in any of your links of rolling blackouts occurring before 2001. It’s pretty common to have brownouts during extreme weather when everyone has their air conditioner on at the same time, even in a “normal” electricity market. It looks to me like there was some indication that deregulation wasn’t working, but hardly the crisis situation that occurred later, where California clearly asked the Federal govt. for intervention. I don’t remember it being an issue until Bush was president. Do you really think Clinton dropped the ball first?
Sua, as usual, nicely said, and I agree with many of the conclusions but your argument still has two unadressed fundamental flaws:
First, You equate 6 months of brownouts in a summer heat wave under Clinton to 6 months of rolling blackouts in the winter under Bush. Do you think those are comparable?
Secondly you say:
And we know this how? Poetic license again?
Putting down our crystal ball, what we do know is:
The FERC took 6 months to act.
Plenty of people were screaming their heads off over possible illegal market manipulation.
The administration went out of their way to disparage the eventual solution and to stonewall communication with California.
*This from an administration of Oilmen, Texans, and ex-Enron employees. *You think they didn’t know what was going on? They couldn’t have picked up the phone?
In addition to these, your argument is shot through with the assumption that no one knew or acted illegally. In absence of hard information to come from the investigation, one turns to the circumstantial evidence, the memos, the broken ideology, the lies, and the stonewalling, and as Vincent Bugliosi might say, the motive of screwing over a Democratic state – all of these signs point to guilty, criminally guilty. While you might want to hold the amount of the Cheney’s billion-dollar check in abeyance, to assume innocent actions in the face of these facts, I find quite absurd.
Perhaps we can agree with DPWhite and incarcerate all the Enron executives, and of course their governmental abettors.
Where the hell were you people in the summer of 2000? I remember this being one of the biggest issues of the year. In his campaign, Bush used the California energy crisis as a justification for pushing for drilling in ANWR. The Gore camp was split over whether to promise price caps to make sure they held onto California.
Blowero, a trebling of wholesale energy prices in two months [June to August 2000] is a mere “indication” that California’s deregulation wasn’t working? A doubling of retail prices in San Diego (the first area to deregulate retail prices) in the same two month period?
Alright, I’m getting tired of searching. I think you get the point.
Blowero, of course the brownouts were weather-related. Without hot (or cold) weather increasing demand, there wouldn’t be brownouts or blackouts. In 2000, however, brownouts and blackouts became so routine that they were being reported on California radio stations along with traffic and weather. (that little tidbit is in one or two of the links I or ace have provided.)
In any event, ace’s claim is that the Bush Administration owes California $30 billion in damages from the energy crisis. His own link from December 2000 demonstrates that at least $15 billion of those damages had been incurred by December 2000, before Bush took office.
the earliest reference I found to a demand for price caps (that is, federal intervention) in the LA Times was from July 7, 2000.
this page is the result of my search in the LA Times archive for “price caps” and energy between 1/01/00 and 12/31/00. As you can see, they were at issue all throughout the second half of 2000.
I don’t think either administration “dropped the ball.” Nobody knew that anyone was breaking the law. The situation was pretty simple in the Clinton Adminstration’s eyes - California had royally screwed the pooch in its deregulation, and it was California’s problem to solve. Without knowing of criminal activity, that was a pretty reasonable response - other parts of the country, including parts that had deregulated, weren’t having California’s problems.
Ace, it actually took FERC 11 months to act. The first demands for price caps came in July 2000. By November 2000, the cries were extremely loud. Clinton’s FERC still did nothing. Even after the first declared Stage 3 emergency in December 2000, Clinton’s FERC still didn’t impose hard price caps. Even after the rolling blackouts in January 2001, before Bush came into the White House, Clinton’s FERC still did nothing. Indeed, the chairman of Clinton’s FERC explicitly rejected the idea of hard price caps on January 11, 2001, as I quoted earlier.
I think it was crystal clear, certainly by August 2000, that California was in a full-bore energy crisis. Yes, it got worse after PG&E declared bankruptcy (did ConEd also declare? I forget), but PG&E and ConEd had been screaming for months that they were going to go under - as your own link noted, PG&E had already lost $5 billion by December 2000, and was losing $1 million an hour.
Again from your link summarizing events:
OK, let’s look at the memo. Lay gives it to Cheney in April 2001. In June 2001, the Bushies impose price caps - thereby preventing Enron from making any more ill-gotten gains. How could the memo be evidence of criminality on Cheney’s part, if the Bush Administration very soon thereafter stopped Enron cold?
What “broken ideology”? The only thing the Bushies did that went against their ideology was to impose the price caps.
Not sure what the “lies” are.
I acknowledge fully that Cheney’s refusal to open the records about the national energy policy meetings is, at best, asinine and, at worst, damn suspicious, but if you’ll note, the national energy policy really had little to do with California. Here’s a admittedly sympathetic summary of Cheney’s energy policy.
All in all, Ace, your assertions wouldn’t survive a motion to dismiss in a civil lawsuit, much less a criminal lawsuit. What you have here is: (1) Enron acted illegally, (2) the Bush Administration had ties to Enron, and (3) the Bush Administration could have acted a few months earlier than it did to impose price caps.
My suggestion is that we investigate Enron. If evidence arises from that investigation to implicate the Bush Administration, by all means go after them. But don’t start the investigation solely on guilt by association.
While I think that there is a strong case to prosecute the executives in all companies who knew about the illegal practices, and as much as I dislike the Bush/Cheney policies in this regard, I’ve seen very little evidence that government people should be prosecuted. It would require a showing of bribery for their policy positions. As much as I despise a policy of letting corporate interests illegally gouge the public, having such a corporate policy isn’t a criminal offense, but rather a consequence of the people voting for those office holders. The complication here is that Gore got the majority, but that isn’t the problem being addressed.
I agree that Enron (and Reliant and other energy companies) demand more investigation at this point, but the Army Secretary, whatshisname White, who previous to his position in the Bush administration ran the Enron division that was the subject of the lawyers memo outlining illegalities, deserves investigation. Whether or not he had knowledge about the illegal practices of Enron while serving as a public servant (that he wasn’t involved in energy policy is moot) screams for a little look-see. But either way he doesn’t look too slick.
I thought the issue here was whether the Bush administration should have done something about the out of control wholesale price-gouging. If I understand this right, we know that the Bush admin. was asked to impose wholesale price caps, and they refused. But you’re saying that the Clinton admin. is equally responsible? I agree that the energy mess had already started, but was the Clinton admin. called upon to do anything at that point? I’m just going by the links you posted, and I’m really not seeing that in any of the articles.
From the article:
“But the alert lasted for only two hours and did not result in any rolling blackouts”
Maybe I’m missing it, but all I see in that link is a discussion of foreign-oil dependence and long-range national energy strategy. Where’s the part about wholesale price caps for California energy suppliers?
I think you are being misleading. AceOSpades said that there weren’t any rolling blackouts until 2001. In response you linked to several articles, and even used the word “rotating” in one of your links, even though there were no rolling blackouts at the time, and all of those articles refer to black/brownouts caused by unusually severe weather.
Yeah, well I don’t think anyone is seriously expecting Cheney to pay us out of his own pocket, so that’s not really the point. The point is whether shifting the blame to the Clinton administration is justified. That’s what I would like to know, and I’m not seeing it in any of your links. Was Clinton supposed to have done something while he was a lame duck?
Doh! Now we’re getting to the real issue, and your links aren’t working for me. Anyone else having trouble?
I’m still skeptical about this - what exactly was Clinton supposed to do that he didn’t do?
By the way, I’m not necessarily saying you’re wrong, just that some clarification would help.
