Molly "don't know jack about economics" Ivins
I have the immense pleasure of introducing Michael Van Winkle as a guest blogger today. Michael earned his B.A. in Political Science (graduating with honors) from UIC, and studies philosophy with a passion that is becoming increasingly rare.
For reader convenience, I have taken the liberty of posting a short excerpt of Molly Ivins original column below. Let the scourge begin.
Those of us who live in arid areas and have been through droughts already know how grave and concrete the consequences of running short of water are. [. . .] what is needed is swift international action. Only 5 percent of the water supply is now in corporate hands, but this administration, along with the IMF and World Bank, is pushing for privatization. The House version of a bill currently moving through Congress, the Water Investment Act, would provide funds for cities to upgrade or expand their water systems and also has a nasty little provision that would provide public subsidies to private water companies. Perils of capitalism? Try telling Californians that corporations don't rig prices.
Molly Ivins successfully demonstrated her misunderstanding of capitalism in her Oct. 3 piece entitled “Perils of Capitalism?"
In a private system, where profit motivates prices, diminishing supply creates a corresponding rise in prices. This provides a natural incentive to reduce overall water consumption. In a public system prices come under political pressures and can remain artificially low due to the political incentives against raising prices. This leads to the very shortages that Ivins laments.
In California, had consumer energy costs been allowed to rise to meet the increasing costs of energy production, the energy debacle there would never have taken place.
As for Bolivia, while I don’t know the details, it might be that a drastically needed price spike will correct the distorted market created by government ownership and thereby stave off shortages such as those we have seen out west.
Molly, I suggest you look into you local college’s ECON101 offerings.
