The Obama Administration is looking to privatize the crown jewel of the New Deal, the Tennessee Valley Authority, basically because with lots of capital expenditure in its future the agency could become a serious drain on federal finances. Selling it off to private investors could bring in some money now and would ensure that future funding needs would not be federal obligations.Standing in opposition to the plan, the FT reports, is the management of the TVA and…the GOP:
…in an interview with the Financial Times, Bill Johnson, who took over as chief executive of the TVA in January, said the authority “isn’t broke” and could fund the investment it needed while staying in the public sector.His comments reflect an upsurge of support, led by typically pro-privatisation Republicans from Tennessee, for retaining government ownership of one of the largest electricity companies in the US.
Several probable reasons the GOP bigwigs are in opposition:1) If the voters think it ain’t broke, don’t fix it. The electricity works in Tennessee and it’s cheap. Voters like what they’ve got and don’t want change. Rational politicians pay attention to their voters’ wishes.2) If the TVA is privatized, Tennessee voters fear price hikes, because a) corporations like making profits more than government enterprises do, and b) the entire burden and risk of up to $25 billion in new costs would have to be borne by those who use TVA, without the financial resources and credit guarantees of the US government.This isn’t just about household electricity; Tennessee’s economic success in part proceeds from its cheap electric energy.It’s tempting to see this as an unprincipled sellout of the free market philosophy by GOP pols, and a lot of people will look at it that way. Presumably the Obama Administration welcomed the prospect of hoisting the Republicans on their own petard. And we have to say they may have succeeded: this move makes a lot of GOPers look pretty cynical, more interested in pork processing than in government slimming. Selling off the TVA right before huge investments have to be made doesn’t seem like a bad idea to us.The real problem here strikes us as an absence of serious 21st-century policy planning on the GOP side. There’s a lot of ritualistic invocation of the wonders of the Reagan and Thatcher years, but that was a generation ago. There are some policy institutes here and there across the country that do interesting work, but the movement to create a new political vision and equip it with serious policy proposals has not gone far enough. What would a market-oriented energy policy look like for Tennessee? If the goal is ultimately to get the federal government out of the energy production business, what’s the plan? What does the experience with privatization in other countries and states say about the choices Tennessee needs to think about?Liberals tend to be more focused on and more interested in policy than moderates and conservatives. Liberals think that government policy is the answer to many of our most important social problems and the chief means of bettering our common life. So many liberals go into policy studies and policy institutes and learn how the system works and how it can be changed—usually, expanded.People who don’t think blue model liberalism has much more to offer the country in terms of constructive ideas can’t just sit around all day complaining about how they don’t like Obamacare or how entitlements are ruining us. The country needs a generation of smart, active policy oriented thinkers who can compete with the blues to develop new and better approaches.[The Wilson Dam in Tennessee, photo courtesy Getty Images]