"Davis Is Failing State"
The Star, May 15, 2001
By Terry Paulson, PhD

Watching the California dream become a nightmare is painful. It seems that Governor Gray Davis and his Democratic minions are doing everything they can to turn the California Dream into a raging nightmare. His lack of leadership and vision is showing almost daily as he blames producers, makes promises he can't deliver on, and fails to focus on the long-range strategies that need action now.

It's been said that great leaders take more than their share of the blame and less than their share of the credit. Like Clinton before him, Davis seems to take none of the blame and tries to take credit for answers that are not making a difference. Instead of providing tax relief for the citizens of California who pay the taxes, he spends the surplus on energy purchases that artificially keep prices lower than the market would dictate—actually encouraging people to use energy as they always have.

It's time for some tough decisions that great leaders make. Instead of just pleading with the public and businesses to conserve, he should be allowing energy prices to find their natural level. I appreciate the governor's suggestions to use more romantic candle lights than chandeliers and more fitness-enhancing stairs than elevators, but higher prices for energy would create a wakeup call that would trigger far more constructive conservation decisions by citizens and businesses. The rate increases could kick in after some predetermined "survival needs" level; as a result, those using more electricity would be charged at the higher market rate. Those on fixed incomes who do not have the money to pay for the rate increases could still get by if they conserved. With the increased income generated, the utilities would have the money to purchase needed power supplies, and, with support from Sacramento and Washington, more suppliers would see the reward at the end of the tunnel for building more California power plants in a fast-track-approval environment.

But instead of making the tough choices, Davis is actually encouraging lawsuits against the energy producers who are now supplying the power. What a strategy—give me the prices I want or I'll sue you! I can't imagine that will do much to enhance the partnership motivation for any of the suppliers that are already tired of constantly being blamed for something that is not their fault and for not getting paid by a stalling government or by bankrupt or cash-strapped California utilities. Instead of suing suppliers, Davis should be expediting payments to the suppliers that have already supplied power and are waiting to be paid and by working to encourage more suppliers to build the plants in California that will increase supply. But who will want to do business with us if what you get in return is the promise of price controls, restrictive environmental regulations, slow payments and the potential of lawsuits if you don't match prices the governor wants to see?

In the big picture, unreliable power, an intrusive regulatory environment and high taxes are increasingly making California a less attractive destination for the businesses that fuel our successful economy. With budget surpluses now turning to estimates of budget shortfalls, it's time for Davis to stop blaming and threatening the people that can be part of the answer. It is time for some tough decisions that will let market forces help bring reliable, competitively priced power back to California. Unfortunately, I fear Davis does not have the will or the world view to make those tough choices.

Fellow Californians, stock up on your supply of candles and get those earthquake and Y2K generators ready to use. Don't worry; we only have a couple of summers before we can elect a new governor who will make the tough decisions Gray Davis refuses to make. Until then, try and look at those rolling brown outs as an opportunity to enjoy a few more romantic dinners under the stars without TV or air conditioning.