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Cities can cost effectively start their own utilities

kevin.burke.dev

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Re: Cities can cost effectively start their own utilities

#351

Post by AnthonyMouse »

wisty wrote: post #160
treyd wrote: post #139

Earlier quoted context omitted.

It's the end state of neoliberal policies . That's the ideological tendency that actually has the obsession with markets and strangling government capacity to do anything other than be a spigot for tax dollars. Scandinavian social democracies aren't perfect but they don't suffer from these entirely predictable problems to nearly the same degree.

Neoliberalism fails because of what economists call "the theory of the second best". Neoliberalism fundamentally assumes that the best practical system is as close as possible to an ideal free market, but it's not, due to local minima (often ones we've already found!) often being better. The best system is a free market, if possible. But the second best system may not be close to the best system, it may be a local mi…

> A classic example is that small companies and no unions is theoretically best, but monopoly unions vs monopoly companies is the second best (since there's no single monopoly, so they negotiate something close to the theoretical ideal).

This is a pretty bad example because monopoly unions vs. monopoly companies is extraordinarily bad to the point of being a plausible worst case scenario. The company is then free to run roughshod over its customers and suppliers and use its resources to capture the government and the union not only does nothing to prevent this but actually encourages it because then they can extract more of the monopoly rents for themselves. Then the normal tendency for the public to demand antitrust enforcement when met with an abusive monopolist is blunted by the union's support for the monopoly and prevents the monopoly from being toppled.

Re: Cities can cost effectively start their own utilities

#352

Post by tofflos »

AnthonyMouse wrote: post #339
econ wrote: post #224

Earlier quoted context omitted.

I would argue that if something may not fail you can only pretend to privatize. You only privatize the profit during the good times. Our railroads paid a nice 300m in divident every year then corona came, people were told to stay home. You can guess who had to pay for the lack of travelers. The most silly are ISP's. The prices in each country depend on how much people can pay and what you get for it is rng

> I would argue that if something may not fail you can only pretend to privatize. You only privatize the profit during the good times. You can straightforwardly privatize things that can't be allowed to fail. Power generation is a decent example: If you have a hundred independent generating companies that all sell into a live auction market, they have to compete with each other which keeps prices down and the market…

There can't be a competitive market. The entity that operates the grid has a monopoly on all customers in the area. So I would say entities that govern grids fall in a can't-be-allowed-to-fail-category while entities that govern generators do not (unless they buy enough generators in a region to effectively become a monopoly).

Re: Cities can cost effectively start their own utilities

#353

Post by maest »

_DeadFred_ wrote: post #200
forgetfreeman wrote: post #194

Earlier quoted context omitted.

I think a related thing that many people get confused by is the idea that market forces even exist. It's very rare these days to find industry segments where participants actively compete on quality or price. The whole idea is a holdover from how business was done 40 years ago.

And with today's investors just buying funds/picking some 'group' on the 401k website, they aren't investing in a company, counting on receiving dividends from the company for the rest of their lives, and therefore forcing the company to be healthy. Instead they are counting on the stock going up short term, something totally different than buying and holding for dividends. And they just keep putting money into the g…

> And then there's dark pools.

This is such a non-sequitor, it undermines your entire post.

Re: Cities can cost effectively start their own utilities

#354

Post by AnthonyMouse »

forgetfreeman wrote: post #196
wisty wrote: post #160

Earlier quoted context omitted.

Neoliberalism fails because of what economists call "the theory of the second best". Neoliberalism fundamentally assumes that the best practical system is as close as possible to an ideal free market, but it's not, due to local minima (often ones we've already found!) often being better. The best system is a free market, if possible. But the second best system may not be close to the best system, it may be a local mi…

I think it's very important to define who's being optimally served when declaring a market ideology "best". Free markets are demonstrably better at servicing capital, but I'm pretty sure that doesn't equate to optimum outcomes for the proletariat (why isn't there a better word for this, I can just see the redbaiting coming from a mile away).

> Free markets are demonstrably better at servicing capital

This premise is highly questionable. Certainly for competitive markets it's entirely false. Uncompetitive markets suffer largely the same failure mode as government bureaucracies, but it's not even clear that this is actually worse, because government bureaucracies are susceptible to not only charging bloated service fees for mediocre service, they can also be captured into diverting tax dollars to private cronies. Just because the government owns the real estate doesn't mean it's manufacturing its own trucks and networking equipment and copy machines, but as soon as it isn't, it's buying that stuff from the market and you need a competitive market or you're still screwed.

So what it comes down to is, you need a competitive market.

Re: Cities can cost effectively start their own utilities

#355

Post by a123b456c »

hansvm wrote: post #202
rmason wrote: post #86

I used to live in a small town in Michigan which had city provided power using a dam. It was inexpensive and highly reliable. But every couple of years the big power company in the state would try and get the city to sell them the utility. After I moved a city council for whatever reason ended up selling. As a result the cost of electricity immediately doubled and power outages occurred regularly due to reduced maint…

I've lived in a few dozen cities (most very, very rural) in the US, and The Bay has, by far, the worst electricity out of any of them. We have longer outages as a planned practice than I'd have from ice storms knocking down half the forest or waves partially flooding the town. As an outside observer, the fact that PG&E can lie to the state and request money for maintenance, subsequently sending that money to sharehol…

Don't forget SDG&E/Sempra. San Diego locals hate them with a passion. It is crazy that an area with such abundant solar generation and environmental concerns should have such expensive power.

Re: Cities can cost effectively start their own utilities

#356

Post by DrillShopper »

mschuster91 wrote: post #269
zmgsabst wrote: post #234

Earlier quoted context omitted.

The Enron scandal was 24 years ago, which is a generation ago — almost two. I’d guess the problem is more endemic to their political system.

The thing is, large scandals can have an aftereffect that lasts for decades. Berlin for example had a massive bank collapse in 2001 under the Conservative government that ended up placing the state of Berlin into billions of euros worth of debt and financial risk. The succeeding SD/Left/Green triplet coalitions had to fire-sell off many state-held assets like the water utility (that ended up a disaster on its own [2]…

And then they killed the nuke plants for coal because they're scared little babies.

Re: Cities can cost effectively start their own utilities

#357

Post by mschuster91 »

DrillShopper wrote: post #356
mschuster91 wrote: post #269

Earlier quoted context omitted.

The thing is, large scandals can have an aftereffect that lasts for decades. Berlin for example had a massive bank collapse in 2001 under the Conservative government that ended up placing the state of Berlin into billions of euros worth of debt and financial risk. The succeeding SD/Left/Green triplet coalitions had to fire-sell off many state-held assets like the water utility (that ended up a disaster on its own [2]…

And then they killed the nuke plants for coal because they're scared little babies.

Nuke had no future in Germany. The plants haven't had security maintenance in many years because it all was relaxed due to the pending shutdown, the plants were many decades old, we don't have a place to store spent fuel (unlike Americans who have ample desert space where no one is ever gonna be bothered), new fuel comes to a shocking amount from Russia, constructing new plants takes >>10 years and many billions of euros.

Re: Cities can cost effectively start their own utilities

#358

Post by DrillShopper »

cscurmudgeon wrote: post #250
tmnvix wrote: post #105

Earlier quoted context omitted.

Perhaps I'm too cynical, but somehow I doubt that those with decision making power that were in favour of selling at the time regret much. Our modern political economy is almost entirely focused on ensuring that everything that can be sold to private entities (read, the market) is. In this ideology the sale would be viewed as a success regardless of any practical downsides.

Don’t blame this on the market. A true market won’t have a heavy handed regulator in bed with a govt approved monopoly.

> A true market won’t have a heavy handed regulator in bed with a govt approved monopoly.

So the only way to have a true market is to count on the opposite of human greed.

Well hopefully that works out.

Re: Cities can cost effectively start their own utilities

#359

Post by DrillShopper »

Chris2048 wrote: post #308
threeseed wrote: post #275

Earlier quoted context omitted.

In that video Brexit was not mentioned once. Even though the UK will be £311bn worse off by 2035 because of it [1]. A decision that can't be blamed on the rich but instead is owned by the ordinary voter. Who then demands the same quality of life they had previously with the same taxation levels. It's delusional thinking and unfortunately no one has the political capital nor guts to correct them on it. And it's a very…

Who "demand[ed] the same quality of life they had"?

The majority of Brits who voted for this on the promise that the UK would be richer and better instead of poorer and even more bigoted/fascist.

We can argue about the reasoning behind that, but that seems to be what most Brits who voted for Brexit wanted

Re: Cities can cost effectively start their own utilities

#360

Post by DrillShopper »

mschuster91 wrote: post #357
DrillShopper wrote: post #356

Earlier quoted context omitted.

And then they killed the nuke plants for coal because they're scared little babies.

Nuke had no future in Germany. The plants haven't had security maintenance in many years because it all was relaxed due to the pending shutdown, the plants were many decades old, we don't have a place to store spent fuel (unlike Americans who have ample desert space where no one is ever gonna be bothered), new fuel comes to a shocking amount from Russia, constructing new plants takes >>10 years and many billions of e…

The nukes not having a future in Germany is completely down to the Green Party and their pathological obsession with killing nuclear power.

They organized and succeeded.

Where was the opposition? Is the entire German environmental movement beholden to the Green Party?

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