David Roberts at Vox.com--largely relying on the academic work of Northwestern's Lynne Kiesling
--says Dinosaurs still walk the earth
Despite my reputation as a wild-eyed leftie, I'm actually a big fan
of well-regulated markets, especially as instruments of innovation,
which is what's most needed in the world of electricity right now. For
that reason, I favor option No. 3 [in which the utility is not a market participant at all but is instead a
"facilitator of the transactions of independent, distributed agents in
the electric network."]. The danger of the first two, Kiesling
argues, lies in "vertical foreclosure," whereby a monopoly "[fails] to
sacrifice market share or to exit when innovation and dynamism become
relevant competitors, and regulatory institutions likewise fail to
facilitate the diminution of the monopoly." This kind of "failure to exit" has anticompetitive effects on markets largely through "incumbency and consumer inertia."
Another way of putting that is that utilities have every incentive to
begrudge competitors, cling to sunk costs, and use access to regulators
to keep the game rigged in their favor. As long as a company with a
captive set of customers and state-guaranteed returns is participating
in energy-service markets, it will distort those markets.
That's the problem, all right. And it's not confined to electric utilities. As the citizens of Seattle are (or ought to be) keenly aware
There's no school in Seattle for a fourth day Monday as a strike by teachers enters its second week.
strike, over issues that include pay raises and the length of the
school day, has delayed the start of the public school year for about
Anyone want to place a bet on how readily the monopolist's employees would be to see the monopoly broken up, thus giving them competition for their services?
"We want to get kids back in school, and we want to show good faith," Seattle Education Association Vice President Phyllis Campano said Sunday evening.
How about you, Phyllis?
Seattle Public Schools spokeswoman Stacy Howard
said Sunday the strike, which began Sept. 9, will affect the school
year calendar, because it has already eaten up the three snow days the
district set aside. The district will have to consider shortening
holiday breaks or adding days at the end of the school year. Graduation
dates could also be delayed, she said.
Stacy, aren't you clinging to your market share? Begrudging charter school competition
Teacher salaries in Seattle range from about $44,000 to more than $86,000 for more experienced educators with advanced degrees.
Well paid dinosaurs.
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