Race to the Bottom

Deck: 

Two Eastern governors make war against markets.

Fortnightly Magazine - March 2012
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At first glance, Maryland Gov. Martin O’Malley and New Jersey Gov. Chris Christie would appear as political opposites. Big city Democrat vs. suburban Republican. Classic liberal vs. conservative rising star.

Nevertheless, when it comes to electricity policy, these two unlikely bedfellows have launched twin crusades that could topple competitive energy markets in each of their respective states, and perhaps beyond. Despite the growth of consumer choice across the country, and despite the fact that new states are embracing the benefits of markets, Maryland and New Jersey are being led down a road that returns their citizens to the failed energy policies of the past.

Why are they doing this? It’s hard to say. In each case it appears to be a combination of politics, an incomplete understanding of how energy markets work, and a fundamental distrust of the consumer as shaper of his own destiny. Regardless of the motivation, the end result is the same. If these two states continue down this path, consumers will lose in the long run as state regulators sign them up for bad deals that will take decades to pay off.

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