Utility Rates and the Poor
Lets help each other
In the DC area there has been a lot of news and discussion about the increase in utility rates from Pepco. With the gentrification of DC (and no doubt other cities) the indigenous populations are feeling priced out of their homes. The media stories and the rate increases themselves of course don’t help.
Economics teaches you that 1) utilities are a natural monopoly and therefore need to be regulated for the good of society (the secret is to find a way to get the best financial return and not rent-seeking eg abnormal, non-entrepreneurial, profits on behalf of the utilities) and 2) that prices need to be set high enough to ensure that adequate investment is made to make the service delivery efficient (and this includes environmentally friendly) and as cheap as possible.
The media, and therefore those who read it, don’t understand 1) and 2). Therefore there is a lot of deserved righteous indignation on behalf of the poor. One solution might be to have a check box on your utility bill to create a fund for the poor to help them pay their utility bills. If your tax bill to the IRS has a check box to give to our monopolistic political campaigns, this direct philanthropy should palatable (and a better investment for society). Then the word could get out (somewhat) on the economic facts of life, voluntarily philanthropy can become more of an option to State redistribtion, unfruitful and alienating us versus them constructs can be minimized, and we can all live happily ever-after, little by little.
In the DC area there has been a lot of news and discussion about the increase in utility rates from Pepco. With the gentrification of DC (and no doubt other cities) the indigenous populations are feeling priced out of their homes. The media stories and the rate increases themselves of course don’t help.
Economics teaches you that 1) utilities are a natural monopoly and therefore need to be regulated for the good of society (the secret is to find a way to get the best financial return and not rent-seeking eg abnormal, non-entrepreneurial, profits on behalf of the utilities) and 2) that prices need to be set high enough to ensure that adequate investment is made to make the service delivery efficient (and this includes environmentally friendly) and as cheap as possible.
The media, and therefore those who read it, don’t understand 1) and 2). Therefore there is a lot of deserved righteous indignation on behalf of the poor. One solution might be to have a check box on your utility bill to create a fund for the poor to help them pay their utility bills. If your tax bill to the IRS has a check box to give to our monopolistic political campaigns, this direct philanthropy should palatable (and a better investment for society). Then the word could get out (somewhat) on the economic facts of life, voluntarily philanthropy can become more of an option to State redistribtion, unfruitful and alienating us versus them constructs can be minimized, and we can all live happily ever-after, little by little.
posted by Cameron Weber at 5:14 PM
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