Thursday, February 01, 2007


With Ehrlich gone, so does blaming the sitting Governor

Over at fellow MBAer Stephanie Dray’s spot, Jousting for Justice, she has a post up about a recent meeting with some Democratic State legislators: Dana Stein and my good friend Jon Cardin. The topic was the looming rate hike by BGE and…let’s just say she’s not too happy with them right now:

I'm deeply dissatisfied with the Democratic Party in Maryland if Dana Stein's reaction to this problem is a common one in the party.


How is it going to look to voters that Maryland Democrats throw up their hands and look helpless now that they have control of the entire state, after we hung the last rate hike around the GOP's neck like an anchor?”
Maryland Dems Will Let BGE Steal Your Lunch Money

Good point, Stephanie, esp. as you mention hanging it “around the GOP's neck like an anchor” in the last election. But it’s the part that follows that I don’t understand:

“And I'm sorry, but there's a limit to what O'Malley can do here. It wasn't a governor that deregulated energy in Maryland. It was a legislature. This is their mess. “

First off: I think a governor was very much involved. His name is Parris Glendening and he signed off on that legislation.

Second: If it truly is a legislature mess, are you then admitting to a bit of electoral dishonesty seeing as how the only Republican of note in this matter would have been our former governor. In other words: If it isn’t Governor O’Malley’s mess, how could it have been Governor Ehrlich’s?

For the record, I don’t blame the current legislature or Governor O’Malley for any potential rate hikes we may see. The deregulation scheme, as approved by the Democratic-everything back in 1999 was laughable. It capped our energy prices at an artificially low level for 7 years. Predictably, with BGE unable to make a respectable profit on its sales, no one else rushed in to compete for a piece of that same unacceptable profit.

Basic Adam Smith Economics: Energy demand is up greater than any corresponding supply and accordingly it is more expensive. If the critics of BGE believe they can do a better job and provide the same level of service at a lower price (because, of course, there wouldn’t be any greed factored in) well…we’re deregulated - have at it. Until then, I’m going to trust the business judgment of the people who have actually put their time, effort and money into providing me energy (you know, like the folks at BGE). And fervently hope that all these preening elected energy populists don’t muck it up any more than they and their predecessors already have.

UPDATE: Also see above: Maryland Conservatarian: Giving the People What They Want

UPDATE II: Over at Kevin Dayhoff's site, the ever astute host there is correcting me for my comments on Paris Glendening’s actions in enacting the instant deregulation:

“First off, former Maryland Governor Parris Glendening did not support electric deregulation. He signed into law legislation that was veto-proof. He fought the legislation aggressively and only agreed to not veto it anyway when he was given the concession of the rate caps – which is perhaps the fatal fly in the ointment.” Kevin Dayhoff -The Electrocution of Ken Schisler

Good point Kevin, but he did sign the bill. Governor Ehrlich had no problem vetoing bills he considered wrong – no matter how popular they polled. On a more general note, I hope my overall tone makes clear that I consider the cap to be the “fatal fly in the ointment” for this deregulatory scheme. Governor Glendening’s only contribution then acted to totally screw it up. I should have made clearer what exactly his role was in this mess but he doesn’t get a free pass from me.

Kevin’s entire post on this issue provides a wealth of information and historical perspective. The Electrocution of Ken Schisler

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