The Deregulation/
Privatization Scam

Cutthroat Capitalism
Vs. the People

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So you're among that group of American zillionaires who have already bought and paid for the U.S. President and most Congresspersons. Your political lackeys make sure that your military-industrial- telecommunication corporations receive taxpayer subsidies and contracts. And you've now taken control of the entire American government.

      You're giving trillions in bailout funds to your own banks while denying unemployment benefits and food stamps to the workers, you've taken most of your manufacturing to lower-wage countries, through NAFTA, WTO, IMF, and other globalization scams.

      But, historically, federal, state, and local governments have managed certain businesses and industries which the American public thought best kept in public hands: prisons, schools, forests, parks, military bases, retirement funds, utilities, etc.

      And American citizens have also wanted those same public governments to regulate certain businesses and industries which the citizens felt could only be scrutinized by public agencies, not privately-owned enterprises.

So, beginning in the 1960s you got your front organizations (Cato, Heritage, Libertarian Party, Ivy League universities, etc.) to raise a loud outcry that governmental regulatory agencies had been "captured" by the industries under regulation. Of course, the allegations were largely true--your political puppets had made sure that the public regulatory agencies such as OSHA (Occupational Safety and Health Administration), EPA (Environmental Protection Agency), and EEOC (Equal Employment Opportunity Commission), were either crippled or co-opted.

But many Americans, made unaware by your having subverted American education for most of the twentieth century, can't see that the groups claiming to be watching out for citizens' interests are actually fronts for your American ruler group. They eat up the catch slogans of: "get the government off the backs of the people" and "consumer choice." So they stand still when your political puppets put through legislation which created your dream state: deregulation and privatization of public institutions.

You got your political puppets to break up some of your large competitors, such as AT&T, IBM, Savings and loan institutions, and airlines, so your cartel could increase its holdings in the telecommunication, computer, banking, and air travel industries.

Then, you began your deregulatory experiments with the opening of access to networks. Under this approach, the physical infrastructures of the networks (such as airports, cables, pipes) remained regulated natural monopolies, but access to these networks was opened so that the remaining elements could be submitted to competition: airline traffic, telecommunication services, gas and electricity production, etc.

From 1998 to 2000, Southern California Edison (SCE) and Pacific Gas and Electric (PGE) paid out $7 million to California politicos to deregulate the state's electrical power sytstem. State Senator Steve Peace, the point man for the deregulation scam, received $179,409 between 1994 and 1998 and Governor Gray Davis received $550,000. SCE and PGE got their money's worth: they've made more than $6 billion in profits since deregulation began and they have combined assets of approximately $71 billion.

In 2001, these political hacks in California completed the biggest deregulation/privatization scam of all time. They first repealed the 1996 state law that sought to boost competition in the state's $20 billion electrical power industry, pretending that the purpose was to pass on the phantom savings to customers.

Under California deregulation, private utilities were required to sell off their power plants and open their markets to electrical resellers, and buy power on the open market, paying whatever price the electricity producers demand from day to day. For San Diego Gas and Electric Co. customers that has meant a 200 percent increase in their electricity bills!

The scam you've created in California is not precisely deregulation of the electricity market, but "restructuring." The generation of electricity is partly deregulated, but additional regulation and controls have been placed on the rest of the system. The result is not a market, but an admixture of semi-markets run by a government body--the Independent System Operator (ISO)--so complex that no one fully understands what's happening.

Your California's electricity "deregulation" law violates most of what are laughingly called the "principles of deregulation": it discourages entry into the market, it restricts expansion of capacity, and it sustains the old systems and rules that hinder competition.

Meanwhile, you made it appear that certain steps would be taken to lessen the burden on the beleaguered taxpayers. You pretended to freeze electricity rates at pre-restructuring levels, but this only confirmed rate-payers' worst fears--California power isn't a deregulated market at all, it's a hybrid that only the insiders know how to manipulate. Unlike genuine deregulation where higher prices would spur more competition, your political hired hands built in hurdles to ensure that no out-of state relief can be expected any time soon.

And you've made sure that you're not immediately threatened by new power supplies in California. Your restructuring law forced California's utilities to get out of power generation and sell their power plants, so they're not going to invest in new plants. And although several groups have applied to build new generation plants, they're not likely to come on-line until 2002. Why? Because your paid-for politicos built in a snail-paced regulatory approval process. Regulatory hurdles ensure that you won't be bothered with competition within the next year or two.

Your lackeys left California's existing power supply dangerously exposed by lengthening the regulatory process for repairs and upkeep. The last thing you want to happen during a power shortage is to have existing plants break down. But because of the deal you built into restructuring, power companies must now get regulator approval before doing major repairs or refits. The result -- while San Diego County suffers blackouts, the power supply problem gets worse as several plants break down because regulators take up to a year to approve maintenance expenditures.

Best of all for you, because electricity rates were not uniformly deregulated (only San Diego is experiencing "unregulated rates") taxpayers upstate have no incentive to conserve power. Hence supply is further diminished and prices pushed higher.

Your bought and paid for politicos in California passed legislation in 2000 to limit the authority of the California Energy Commission (CEC), which is responsible for licensing new plants. Local water boards, air boards and state wildlife departments like Fish & Game may look at power plants individually or on a regional basis, but all the agencies send their assessments to the energy commission, which can ignore or embrace their concerns, as well as those of local citizens.

Your hirelings in the California legislature passed a bill to finance a $10 billion fund to purchase power, with the result that the taxpayers will be paying twice to provide you gargantuan profits: money to pay for the $10 billion fund and increases in electricity prices

And your political puppet, Energy Secretary Spencer Abraham, disallowed a cap on prices for electricity. You now probably feel that you can proceed apace with privatizing anything and everything you desire: Social Security funds, prisons, schools, and any activity or commodity you want.

Adoption services Municipal water supply
Air traffic control Museums
Airports Nursing homes/services
Animal control/shelters Parks and preserves
Campgrounds Parking lots/fines
Concessions Personnel management/recruiting
Data processing Printing/publishing
Day care centers Prisons and jails
Dropout prevention Road maintenance and repair
Employment training Renewals of drivers'/vehicle licenses
Food services Satellites/telecommunications
Fire suppression Schools
Garbage/refuse collection Security personnel/systems
Hazardous waste management Social security/pensions
Information technology Sports facilities/stadiums
Inner-city housing Street cleaning
Inspection/testing services Substance abuse treatment
Janitorial services Tax collections/returns processing
Landfills/solid waste Telephone services
Landscaping Toll roads/bridges
Liability insurance Utilities (electric/gas)
Libraries Vehicle maintenance
Locator services Wastewater treatment
Mail/postal services Welfare (via donations/volunteerism)
Mass public transit Weatherization
Medical insurance Wildlife resources
Mental health Weather forecasting

Everything seems to be going your way. But watch out, you may have awakened a sleeping giant.

The American People Are Not As Stupid
As American Fatcats Think They Are

You're an average citizen who's experiencing a 200-300% increase in your electricity bills. You're pretty sure that the newspaper and TV reports are feeding you lies about the so-called energy crisis.

You know that historically, the U.S. was created on the principle that citizens own public land, highways, schools, ports, airports, parks, the airwaves, government buildings and other assets. The Constitution created a government that was to serve as the protector of the citizenry, and their champion when confronted with the predatory greed of profit-motivated corporations and individuals. But you don't see anyone in the federal or state government doing anything but assuring that the big energy producing companies' profits skyrocket even more. So you begin to inform yourself.

You find out that this is the reality of the "energy crisis:"

  • There is no real shortage of electricity, only a fake shortage created by the big corporations that produce electricity so they charge cutthroat prices

  • The federal and state legislators, bought and paid for by the big money interests, created this entire scam to benefit their "sponsors"

    • They created legislation which forced utility companies such as Pacific Gas and Electric (PG&E) and Edison International to sell their power plants to private companies such as:
      • Enron (Texas-based)
      • Calpine Corporation of San Jose
      • Dynegy Inc. of Houston
      • Duke energy of Charlotte, N.C.
      • Reliant Energy of Houston

    • The legislation set limits to what the utility companies could charge consumers but did not limit what the power producers could charge the utility companies, resulting in:
      • Windfall profits for the power producers
      • Huge losses for the utility companies, leading to their bankruptcy (but stock profits for their executives)
      • Legislation to "bail out" the utility companies, to the tune of $10 billion of taxpayer money and counting
      • No legislation to "bail out" the beleaguered consumer forced to pay huge energy bills
      • No cap on the prices the power producers can charge (as dictated by Energy Secretary Abraham)

So you're mad as hell and you're not going to take it anymore. You join with groups that are doing something about this scam and the American plutocracy's war against the citizenry :