Deregulation Reform

The political fad of Deregulation that has occurred during the past two decades has brought some temporary benefits to consumers.  These benefits are rapidly being rescinded as airlines had then forced by higher fuel prices and then over a decade of financial losses to dramatically raise fares and substantially reduce the number of flights and seats available to serve the public.  Fortunately, they have since been able to recover  as the result of increased domestic oil production from fracking. However, telephone deregulation has greatly reduced the cost of communications for business and commerce, but most residential users have seen large increases, not savings  in the cost of their local service.  Outrageous charges for information phone calls, repair service, etc are now the norm.

Similarly, electric and gas utility deregulation has now made its full impact upon consumers, and double digit increases in monthly bills hit consumers as the price caps imposed during the transition periods end.  Large businesses and other large institutions have been able to take advantage of their ability to sign long term supply contracts to minimize their utility costs, but small businesses and residential users have had to compete for the residual supply remaining and could pay much higher marginal rates for their service.   Recent legislation by the Maryland has attempted to introduce competition on the supply of electricity, but buyers should remain vigilant as the terms and penalties offered by the vendors vary widely and misrepresentation has occurred from solely by relying on their telephone assurances.   

No public benefit has resulted from the re-pricing and selling off of existing power generation facilities at inflated prices. The financial cost of this economic artifice is now apparent to all adversely affected by the  increases in the cost of electricity provided to their homes and businesses.  What also really galls is the fact the most of the natural gas produced in the country is taken from Federal owned lands and waters and is now subject to unconstrained market manipulations with the public paying the bill for this speculation.

The solution is for the Federal government to take back control over the allocation of electricity, natural gas and other hydrocarbons produced on Federal lands and waters and designate (i.e., regulate) baseline supplies of these utilities to be set aside at affordable prices for the needs of state and municipal governments as well as residential and small business consumers.  The Congress needs to recognize that the collective market power of large business and commercial operators to negotiate cut-rate prices for themselves works to the ultimate detriment of society at large and that compensating legislation is essential to protect small consumers from market manipulations and price gouging.  

Unfortunately, the Federal government itself is one of the prime exploiters of utility consumers with its telephone Federal Access Charge, which allows phone companies to collect this charge in addition to other basic telephone service charges regulated by state public utilities commissions.  In addition, the Federal government collects for itself  Excise and Universal Service Fund Charges under the guise of keeping local phone rates affordable for all Americans.  (My phone bill has not become more affordable since deregulation, so I wonder who is really getting the "affordability" benefit). Yet, the Republicans in Congress are still much more concerned about eliminating their so-named "death tax" and other taxes on their yet-to-be deceased super wealthy clients.  

Apparently, these Republicans must have discovered a way for the wealthy beneficiaries of the proposed elimination of this "death tax" and other taxes to take their money with them (no doubt, the super-rich also already have made their advance reservations at 5 star lodging in the great beyond).  Meanwhile, the rest of us will continue to spiral downward into the voracious black hole of ever increasing personal debt and bottomless Federal budget deficits.

The destructive consequences of financial deregulation over a decade ago have now manifested themselves as more than 8 million jobs lost and as many as 10 million homes had been repossessed or threatened by foreclosure.  The causes of these disasters have not been corrected, and derivatives and other exotic financial instruments are still being created with the inevitable onset of an even greater financial meltdown in the future.  Fifty to one leverage risks that are created will be again be bailed out to save the greedy from the consequences of their destructive anti-social behavior.  The disastrous result will be more legalized counterfeiting by the Federal Reserve System to create the cash needed to fund these bailouts. Current and future generations will be burdened with the inevitable hyper-inflationary destruction of middle class financial wealth and economic security. 

The only solutions are to restore the Glass-Stegall Act safeguards that were undone by Clintonís financial deregulation and nationalize and/or break-up the too-big-to-fail financial institutions that are still threatening the stability and viability of the nationís financial system. Finally, the Federal Reserve System itself needs to be reorganized to eliminate the conflicts of interest inherent in allowing the bankers to regulate and profit from its activities.  It must have a majority of highly qualified public members not connected with any financial institutions and become an independent Federal government agency.

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