Tennessee Valley Authority – Just Another Entitlement Program

Mandeville, LA – Exclusive Transcript – It’s all regulated by the state.  These things are operated under the supervision of these god-awful things called public service commissions.  All they do is ensure that the utility is guaranteed to make a vast, vast profit on the sale.  They could still make the profit, but if they had to compete for it, they would then have to actually be out and in the business of marketing.  They might have to improve delivery of services.  There are all kinds of things that could happen if there was competition for the generation of electricity.  Check out today’s transcript for the rest…

 

Begin Mike Church Show Transcript

Mike:  William is in Georgia.  William, you’re the lone survivor from the first hour.  How you doing?

Caller William:  Good morning.  How are you?

Mike:  I’m just fine.  I can’t speak for anyone else, but I’m just chipper.

Caller William:  I love your show.  I’m in full agreement with you on this, the topic of the TVA.  It epitomizes the entitlement subsidy mentality of this nation.  The left, the Democrats are the far left.  The Republicans, the GOP are the near left.  They are the Wilsonian statists. Everybody has this buy-in into federal government dependency.  It’s frustrating, trying to take away Medicare, trying to take away Social Security.  Don’t touch my subsidy.  Thank you for bringing this to light.

Mike:  I’m still trying to plumb the depths of this and get to the bottom of it.  I don’t quite understand what it is that the Obama administration is trying to do and why it is that Tennesseans are so opposed to it.  If it is indeed because — one of two answers to that question.  One is that the powers that be are feeding a line of propaganda to Tennesseans and telling them that if the federal government steps out of this and unloads it or whatever it is that Obama is saying he’s going to do or would like to do with it, then [mocking] “You just wait and see.  All the rivers and dams are going to go away.  You won’t have any recreation, no fishing.  It’s all going to go to pot.”  There is a campaign to keep the status quo because it is very profitable for people that are invested there.

Or answer number two is that there is fear or there is a lack of willingness on the part of those that run and administer the TVA to compete for electrical services, to compete with competitors to deliver electrical services.  This manifests itself all across the entire North American continent.  There are few places, you can probably count them on one hand, where there is actual competition for your electrical dollar.  Where you live in Georgia, did you have an opportunity to go to — you probably had Georgia Power and Light or you had Duke Power.

Caller William:  Georgia Power, that’s it.  There’s only one.  There’s no competition.

Mike:  It’s all regulated by the state.  These things are operated under the supervision of these god-awful things called public service commissions.  All they do is ensure that the utility is guaranteed to make a vast, vast profit on the sale.  They could still make the profit, but if they had to compete for it, they would then have to actually be out and in the business of marketing.  They might have to improve delivery of services.  There are all kinds of things that could happen if there was competition for the generation of electricity.  The fact of the matter is, in 2013, electrical generation, other than when it’s time to pay the bill, is viewed pretty much by the American sheeple as a function that everyone is entitled to.  You’re right it is part of the entitlement mentality.  Everyone is entitled to electricity.  No one is required through the entitlement to compete to deliver it, unlike food or even bottled water, unlike any other commodity.

Caller William:  Americans believe that they’re entitled to utilities, they’re entitled to home ownership, an automobile.  They can’t function in American society or even be able to get a leg up unless they have these basic things, and I think it’s just BS.  I think it’s fear mongering to try to empower impoverished people by this notion that they should be entitled to these things.  Make it on your own.

Mike:  I don’t think you’re going to be able to cleanse or convince people otherwise when it comes to massive subsidies and massive public works like the electrical generation grid, as they call it, that there is any alternative.  The acquisition cost for delivering the services to people in suburban and rural areas is probably prohibitive.  That’s a result of decades, almost a century, of power companies operating monopolies.

Caller William:  Government-backed monopolies.

Mike:  Isn’t it amazing that we had to expand the power of the federal government because we had to deal with these evil, despicable people that we called robber barons because the big fear was [mocking] “They’re erecting monopolies in their own name.  They’re monopolizing automobiles and steel and railroad and oil.  We gotta get these guys.  We gotta get ‘em!”

Caller William:  You can’t have a monopoly without government.

Mike:  That’s exactly right.  That’s straight out of Hayek.  A free market will not create or allow the creation of a monopoly.  That is not an absolute but it’s pretty damn near an absolute.  Governments create monopolies, that’s the fact of the matter, and they guarantee the monopoly’s existence and its persistence.  I think that when you see something like the TVA or any of these other vast electrical generating, like you say Georgia Power and Light, their livelihood is guaranteed by the existence of public acquiescing to public service commissions.  What the PSC and state legislatures then do and what the federal government then does is makes it impossible for local providers or anyone else to get in there and compete.

Caller William:  That’s right.  And without true competition, you’re going to have these rates that keep going up and up and up.  It’s just like the medical issue, the healthcare issue.  Everybody knows that we are never going to go below the level of Medicaid payoff or Medicare payoff.  There isn’t true competition in the medical and healthcare field.  It’s the same with the utilities run by government, corporate, private-public —

Mike:  Partnerships, they call them.  They’re buddies.

Caller William:  I think Rand was right.  We need a huge wall between business and government, not unlike or smaller than church and state.  We need that wall between business and state.  It needs to be big and they need to get out of it.  Thanks for the conversation, Mike.

Mike:  You’re very welcome.  Thanks for the phone call.  We can desire all that we want.  I don’t see it happening anytime soon because of the enormity and scale of these things.  When I was reading those stats earlier from the Tennessee Valley Authority, that it provides power to 10 million people, just think of that in terms of providing any kind of service in a relatively small, contained environment where you are probably — I don’t live in Tennessee so I cannot say for certain, but I’m sure I’ll receive phone calls on this — the sole provider here to10 million customers.  Is it possible that there could be competition, or if there was competition, that there would be five companies offering services to two million providers?  What would be the end result of that?  What’s the end result of anytime any one industry or business has to compete with another for market share?  There is either a war on for prices, or there is a war and battle on for services.  You either market and advertise and promote the fact that your service is more par excellence than the competition, or that you have a decent service and you clobber them with prices.  There may be luxury competitors as well.  No, we don’t do this and no, we don’t do that, but let me tell you what we do do.  It’s kind of like if there wasn’t competition, then Cadillac, the car brand, would not be able to exist in the same market that the — I’m trying to think of a little car, tiny.  Do they still make a Fiesta?

AG:  Yeah, I was going to go Fiesta.

Mike:  Why would you buy a Cadillac if all you needed was a Fiesta?  Because there’s choice.  [mocking] “That Cadillac rides really nice, and it’s pretty big and roomy, and I like them leather seats and leather dashboards.  I don’t like that cardboard stuff inside the Fiesta.”  You may not need a Cadillac but you may choose to purchase one.  That’s the essence of a market and all is controlled by the price mechanism.  When you don’t have the price mechanism, then you don’t have a market; you have a monopoly, and it’s rigged, and it’s always rigged against the people that need the service.  That’s the dastardly part of this.  Monopolies rig the industry or rig the commodity against the interests of those that consume it.  [mocking] “Yeah, but we get all this out of the TVA.  We get this and that and the other.”  Well, if you’re going to tell me that, then I’m going to say that somewhere along the way there’s a subsidy.  You’re still paying for it.  Would you be willing to pay for it if electrical generation corporation X, Y or Z were doing it, or would you say, [mocking] “I don’t need that.  You guys are supposed to be providing me electricity, not running a state park with bass fishing licenses.”  Yet that’s exactly what’s going on.  If Tennesseans want it and they believe in republicanism, then they ought to have it and they ought to manage it themselves.

End Mike Church Show Transcript