[Expletive Deleted]

The thing you always have to remember about the California debacle is that, practically speaking, California begged the traders to please, please, please come in and rob us blind. California: froze retail prices, freed wholesale prices, refused to build enough transmission, refused to build enough generation, and then set up a “competitive” market with a whole host of arbitrary – read, stupid – rules that allowed traders to follow the rules and make ungodly profits. Surprise, surprise, traders did. The traders, being traders after all, enjoyed themselves immensely and, largely being a bunch of guys in their 20s and 30s, did so in a swaggering and profane way. The lesson, as always, is, the rules matter.

Sexy red dress – actually, I try to avoid rape metaphors. It’s less provocative, and perfectly accurate, to note that the California government left huge piles of cash lying around, wrote laws saying that if, say, you sold a kilowatt to someone in Arizona and then bought the kilowatt back again you could have that huge pile of cash, and then was shocked that people took the huge piles of cash. I do agree that, in a perfect world, necessarily inhabited by some species other than humans, the traders wouldn’t have taken the piles of cash.

The way power companies created the crisis there: so-called “capacity withholding”, mostly by taking powerplants off-line for phony maintenance – is totally illegal. Thus the rape analogy holds. Had the power companies obeyed the law, there wouldn’t have been any energy crisis in CA. There was enough supply to satisfy the demand.

Now, it doesn’t mean the CA politicians are blameless – we live in the real world where people do break the law when they feel they can get away with it – but even so, it seems kinda tasteless to blame the victim.

If by “a few bad apples” you mean “plutocrats”…

There is also a not so subtle difference between being a criminal — breaking the law — and legally taking advantage of poorly written laws, similar to the difference between tax evasion and tax avoidance. The latter — taking advantage, avoiding — constitutes the vast majority of what the Enron traders were snickering about.

The Enron traders were not “plutocrats,” by the way. They were mostly mid-level to lower-upper-level, extremely intelligent, quick, nervy cowboys.

The latter — taking advantage, avoiding
I think they called it fucking. Hard to tell from the typing. From their own self-characterization, it seems the culprits would be likely to disagree with your characterization.

Then again, the little guy is just here to get fucked, so it’s not like they were doing anything they (or Microsoft or Intel) don’t do every day. Fuck whom you can to get what you can simply because you can. You can buy good PR later, as if you care.

What they did was illegal. Not “taking advantage”, but committing crimes. Manipulating prices is illegal.

Enron Investigators Expand Probe To California Energy Trading

Washington Post Staff Writers
Wednesday, January 8, 2003; Page E01

…
Enron’s former chief West Coast trader, Timothy N. Belden, pleaded guilty in October to federal fraud charges. He admitted that he helped rig electricity prices there through strategies with code names such as “Death Star” and “ricochet” and has promised to point prosecutors toward others involved in manipulating prices.
…

“Being Abu Ghraibed”

WTF?

How about this. The traders were bad actors and California was stupid. There. Can’t we all just get along?

California foolishly allowed sellers with large amounts of monopoly power to go unregulated, so they manipulated the market by withholding supply, which is how you take advantage of monopoly power. They needed to use their buy side power to lock the companies into long term contracts at reasonable (low) prices.

My favorite libertarian argument is that they should have deregulated retail prices. So consumers would have held off buying electricity until the price went down? Right. The power companies had market power; they used it. You can’t shop your way out of that. You think California state government wasn’t trying to?

Xavier: “natural supply and demand shifts”??? What a coincidence that we have only seen them in California during the deregulation period.

if you don’t confess, we’ll force you to hire a lawyer who’ll suck all of your money out of you, and since defending such a complex case takes more money than you have you’ll lose anyway

So? What are you bitching about, that this isn’t fair?

This was not just a few bad apples. These morons were part of the lie that was the “energy” crisis for CA. Rolling blackouts with fat suits getting rich while the rest of CA sweated like pigs in the heat. Energy is not a problem for CA. Criminals hiding amongst the energy industry and the government are.

“You’re absolutley correct mq. Quantity demanded doesn’t decline when the price rises! Those silly libertarians!”

My point was that the demand elasticity for essential goods tends to be rather low (in absolute value, that is). Not high enough to remove massive profit rates from manipulating prices in a market with large economies of scale and therefore few effective providers. Perhaps you should actually move on to chapter 2 of your intro to economics textbook before you start spouting off.