Back when the California energy crisis was news, Paul Krugman said that there was price-fixing going on, and that this showed that the Texas oil industry is evil. This story has good news and bad news for Krugman. The good news is that there is evidence of price fixing. The bad news is that the party responsible was not from Texas.

...it turns out that the state-created Independent System Operator, or ISO, was the one rigging the price of power, not the evil private generators who everyone suspected.

As of now, the state government is more involved than ever in the California energy market. What does this suggest about the possibility of another energy crisis there this summer?

Return to top

Blogging software: Powered by Movable Type 4.0-rc1.
Pictures of Bryan Caplan and Arnold Kling courtesy of the authors.
All opinions expressed on EconLog reflect those of the author or individual commenters, and do not necessarily represent the views or positions of the Library of Economics and Liberty (Econlib) website or its owner, Liberty Fund, Inc.

The cuneiform inscription in the Liberty Fund logo is the earliest-known written appearance of the word "freedom" (amagi), or "liberty." It is taken from a clay document written about 2300 B.C. in the Sumerian city-state of Lagash.

Contact Site Map Privacy and Legal http://www.econlib.org