Crisis:
"We are a superpower with a third world grid". That statement, by New Mexico Governor Bill Richardson, just about says it all. Governor Richardson should know, he is a former Federal Energy Secretary. His "solution" to the problem is to set up "reliability standards" and to turn what he calls State monopolies (the utilities) into one gigantic Federal monopoly.
Turning to the people who really know, the people who run the grid, the problem becomes obvious. "No significant additions have been made to the grid in 20 years of bulk electric transmission" - Ellen Vancko, a spokeswoman for the North American Electric Reliability Council. "There hasn't been major spending to improve transmission lines by the state since the 1970s and no major work by utilities since the 1960s" - Paul Tonko, an engineer and chairman of the New York Chamber of the Energy Committee.
Why does this situation exist? "No one ever holds a ribbon cutting ceremony for a new sewer line". That's a quote attributed to former New York Mayor Ed Koch. Or a new power transmission line or power station? The MAINTENANCE of existing economic infrastructure, no matter how vital, is not a vote getter. Until it fails, that is.
What happens when it fails - spectacularly? "The grid needs to be modernized, the delivery systems need to be modernized. We've got an antiquated system." Yep, you guessed it, that's a quote from none other than George W Bush, the President of the United States of America. What with? More deficit spending.
Ask yourself whether any private manufacturing concern would be in business if they were still running production equipment which was installed 30 to 40 years ago and which had not been maintained since installation. Ask yourself how they could compete against concerns which had both upgraded and maintained their capital equipment over that period. The simple answer is that they couldn't, and to judge from the collapse of the US capital goods industries they haven't.
The productive US economy has been collapsing for decades. So has the vital infrastructure without which no modern economy can function. The evidence of the first has long been clear. The evidence of the second has now come into the open. The effects can and will be eventually read on US financial markets. |
