So it was flawed in that it didn't require California to have a first claim on the power plants. It deregulated part of the market, but not all of the market.
Sentiment: NEGATIVE
The problems in California have been that it's been very difficult to site and build new power plants.
Well, there's no question that the law passed in 1996 was flawed. It deregulated the wholesale market, meaning the price that the utilities had to pay energy companies for power, but not the retail market.
But the most important thing is, Enron did not cause the California crisis.
The California crunch really is the result of not enough power-generating plants and then not enough power to power the power of generating plants.
The truth is in California you can't build a new manufacturing facility, and businesses are leaving in droves because of bad government policy.
There's no question that California, in the last three or four years, has been privileged to add disproportionately to the economic growth of America, and to contribute to its technological productivity.
Because the sad fact is that the Enron Corporation and others manipulated with unfortunately great effect the energy market in the West Coast starting in 2000.
Clearly, high energy prices will have a large negative effect on the California economy and could possibly drag the rest of the nation into a recession.
California is like an artificial limb the rest of the country doesn't really need. You can quote me on that.
Californians devised a system of electricity sales that ignored every dimension of the free market.