the REA
Topics: Misc
08 Jul 1992
From: ervan
Socialism is bad. A little bit is worse.
A good case example is the REA (Rural Electrification Association).
The REA was founded in the depression to subsidize the construction of
electrical tranmission and generation facitilities for rural America.
Presuming it was ever useful, it has long outlived its usefullness.
Now, most of the REA budget goes to large corporations who are already
very powerful.
That being the case, many do-gooders have suggested that REA subsidy
be need based. Apparently, the only reason that hasn't happened is the
usual pork barrel logic of the Hill. It would be a bad idea though.
It would put the government in the business of encouraging the losers.
The less efficient one is at producing power, the more you get. Whoever
is good at it, get's cut off at the knees by having his competitor
subsized. The way it is now, the government is simply in the business
of making power cheaper than it really is and wasting my tax dollars
in the process, but at least it is consistently helping to improve
the infrastructure. Making it needs based would be worse.
Another example is the S&L bail out crisis. FSLIC (& FDIC) was
foolish enough in the first place, but at least they regulated the S&L's
they insured so that the cost of the forced insurance premium was in
line with the risk. Deregulation was necessary because regulation was
causing the S&L's to go bankrupt by not letting them compete effectively
in the market. Unfortunately, deregulation only went half way, it
deregulated conduct without deregulating the price of insurance
(what the S&L's had to pay FSLIC). We all know the rest of the
sordid story. A little bit of socialism is even worse.
The state of education is another example. The federal government
imposes numerous restrictions on states and it funds to a limited
extent certain programs. The result is that most school districts
have three levels of management to appease, local, state, & federal.
The result is a school system that wastes more money on bureaucracy
than it spends on basic educational needs (okay, it's not quite that
bad). Most European countries have gone the route of more socialism
and totally federalized their schools. They manage better results
with equivalent money. That would be better than what we are doing
(though it's worse than privatizing of course). It would succeed,
in part, by steamrolling individual objections to what's wrong and
force everyone to conform. I find that abhorent, but it would be
more efficient than the current system.
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