Former president Jimmy Carter gave yesterday a speech to the Cuban people and criticized the United States for its embargo against Cuba and he criticized Cuba for its lack of political and economic freedom. I appreciated the recognition of the obligation of powerful countries to help other countries as Carter stated that "because the United States is the most powerful nation, we should take the first step" towards improving relations between the two countries. Finally a message of peace, of democracy, and of reconciliation after being demonized by a Bush administration obsessed with the war against terrorism and obsessed with tax cuts and corporate welfare.

Democracy is based on the respect people should have for each other, and certainly democracy is not reflected with the unrestrained capitalistic gospel of making money with money. Our financial and economic systems are inherently unstable and this is why we need to regulate such systems. Our big corporations, our fortunate sons, and our sold out politicians, they all know very well that our financial systems are unstable, and they all know how to use the instability of the so-called free market to make money with money.

The fraudulent energy crisis in California was manufactured by Enron Corporation. The energy market was deregulated and in the absence of regulations it was natural for the greedy corporation to make money with money.

We must understand that in an economic environment of making money with money there is no such a thing as an equilibrium price for a good as determined by the demand and supply for that good. In an unregulated free market we can always have two different prices for the same good, and this difference in price, no matter how small, can be used to trigger ever bigger prices.

This is what happened in California as the energy prices skyrocketed. Frank Wolak, Stanford economics professor, says that Enron was a ruthless speculator and used arbitrage to create money from doing nothing. Wolak says that "if the price in one area is higher than another, you buy in one area and sell in the other. All these guys would do that in a minute."

In California, after deregulation took effect in late 2000 and early 2001, wholesale energy prices shot from $30 a megawatt to $3,000 a megawatt. And as the energy prices were skyrocketing both President George Bush and Vice President Dick Cheney maintained that there was an energy shortage and that the problem was that people would use too much electricity.

Today we know otherwise, and in fact the Federal Energy Regulatory Commission has recently released a series of memos supporting the culpability of Enron in rigging the energy market in California. And it is interesting to note that Enron's services in California were headed by Thomas E. White, who was later appointed by President Bush as Secretary of the Army while cashing in $50 million in Enron stock options.

We cannot trust our unregulated Free Market, and we cannot trust the Bush administration.

References

How free is the free market? By Noam Chomky, Professor of Linguistics at the University of Cambridge, Massachussets, USA http://www.oneworld.org/second_opinion/chomsky.html

Text Of Jimmy Carter's Speech The speech was made Tuesday at the University of Havana by former President Carter and broadcast on Cuban state TV and radio. Wednesday May 15, 2002 http://www.guardian.co.uk/worldlatest/story/0,1280,-1735270,00.html

Memos show how Enron played game By Carrie Peyton Dahlberg -- Bee Staff Writer, May 12, 2002 http://www.sacbee.com/content/politics/story/2671383p-3371681c.html

A 'Free-Market' Debacle Continues. California's Energy Crisis Far From Over Mindy Spatt, http://www.tompaine.com/feature.cfm/ID/5616

The phony crisis Published in the Editorial section of the St. Louis Post-Dispatch on Sunday, May 12, 2002 http://home.post-dispatch.com/channel/pdweb.nsf/text/86256A0E0068FE5086256BB70033785D

HOAX. How Deregulation Let the Power Industry Steal $71 Billion From California By The Foundation For Taxpayer and Consumer Rights, January 17, 2002 http://www.consumerwatchdog.org/utilities/rp/rp002193.pdf

Follow-up questions with respect to Enron memoranda discussing Enron trading strategies in California wholesale energy markets and California ISO sanctions for such strategies. Letter to Enron's Attorney dated May 6, 2002 - [pdf, 71K] Enron Memo dated December 6, 2000 - [pdf, 1,079K] Enron Memo dated December 8, 2000 - [pdf, 1,083K] Enron Status Report (not dated) - [pdf, 868K] http://www.ferc.fed.us/electric/bulkpower/pa02-2/pa02-2.htm#notice