Deregulation is failing this country and state

Monday, October 6th, 2008
by Gardner B.

Every day, we are all witnessing the costs of the deregulation of the financial industry in this country.  Jobs lost, pensions threatened and the American taxpayer now on the hook for $700 billion to bail out the fat cats on Wall Street.

The deregulation of insurance and electricity industries in Texas have also had a cost.  Sky high electric rates and the highest homeowners insurance rates in the country.  Former U.S. Senate candidate, Barbara Radnofsky, ties these threads together in an excellent piece published in the El Paso Times.

Insurance and electric companies want little regulation so they can profit more, and not for the State’s benefit. These companies make the twisted argument that “competing” companies will flock to deregulated states.

It’s untrue; more companies won’t create competition. Multiple, unregulated companies don’t work to keep rates low. They work together to keep rates high. That is why they flock to unregulated states.

The plea “Let us compete without regulation” is the same argument as teen agers wanting no curfew. “Trust us to come in at a decent time. No one else has a curfew. We’ll be responsible out there with our friends.”

Deregulated markets are neither free nor open. Neither competition nor bargaining occurs.

Thus, insurers raise rates because they can, and our electricity rates have gone sky-high.

The Texas Legislature deregulated these industries and the Texas court system protects these industries from ordinary citizens.  Ever try to sue a big industry in Texas for a wrong committed by them?  Even if you win in district court your case will be appealed to the Texas Supreme Court and we all know the magic number there.  87%.  That’s the percentage of the time that the Texas Supreme Court rules against consumers.