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To: Amy J who wrote (135195)	5/16/2001 9:45:46 AM
From: Joe NYC	Respond to of 186894

Amy J, I can't help but find the whole situation in California comical. All these conspiracy theories are amusing. In the meantime, I would not be surprised if California consumers of gas and electricity received lower increase in prices than the rest of the country. The reason California is so screwed up is because they are not passing along the increasing prices to consumers, who in turn would conserve and end the crises. Rather than do the obvious, California left the utilities go under, and now the energy crises threatens the state finances and credit-worthiness of the state. Btw, Bush didn't like Andy Grove's idea for a high-tech tax cut for PC purchases (to stimulate hightech growth, 20% of GDP), yet Bush seems to like his tax cut for gas/oil. Could this be because there is no tax on PCs, but there are various energy taxes? I guess what Andy Grove was asking was a tax credit, not a tax cut, since you can't cut a non-existent tax. What happened in NYC in mid-70's? What was that like? A fiscal watchdog assumed an overseeing role over the finances of NYC, and could overrule the elected officials, if the budget didn't stay within the guidelines. It basically means that the voters of New York City were not able to elect a responsible government, so their power to govern themselves has been partially removed from them. The increase in demand is marginal, but the price increases aren't. The 13 new generators that are planned go well beyond the needs of the marginal demand increase. I guess now that you know the cost of too little capacity, you will appreciate some redundancy and spare capacity, once it is online. Joe

To: Amy J who wrote (135195)	5/16/2001 9:55:43 AM
From: GVTucker	Respond to of 186894

Amy, RE: Generators suddenly charged 10Xs more, not 2Xs more. You're talking about very short term spikes, where there was simply so energy available. The normalized price increased about 2X. When Intel had 100% of the mobile market, should they have charged the consumer 10Xs more, even if demand was up by only 130%? If Intel wanted to, they should. It would obviously be a poor choice, and would hurt Intel in the long run. Bush didn't like Andy Grove's idea for a high-tech tax cut for PC purchases (to stimulate hightech growth, 20% of GDP), yet Bush seems to like his tax cut for gas/oil. Bush doesn't realize that he has zero credibility when it comes to oil & gas. He and Cheney ought to just shut up and stop hinting at subsidizing oil & gas exploration. That doesn't make a tax cut for PC purchases smart, though. Just because high tech is 20% of GDP doesn't mean it should be any more important than the energy business was 20 years ago when it was more than 20% of GDP. Then, of course, the government did the converse to the energy business by implementing a 'windfall' profits tax. Energy people aren't exactly skilled at PR, that's for sure. What happened in NYC in mid-70's? What was that like? NYC was about a dollar away from having to declare bankruptcy. Every service the city provided, including things like police and fire fighters, was affected. The increase in demand is marginal, but the price increases aren't. Very marginal increases in demand create energy shortages. Very marginal increases in supply create gluts. That's the way it is when you're dealing with a true commodity. When the price of crude collapsed in '86, people in the energy business (the supply side) cried conspiracy and truly believed that there was a price fixing conspiracy. Energy prices have tripled recently, and it is no surprise to me that consumers (the demand side) are now making the same claim. I find it hard to believe that a conspiracy can be propagated on both sides of the economic spectrum so easily. To me, it is much more logical to blame market forces and the normal movement of a commodity's price.