Learn from History’s Mistakes – Vote “No” for Public Power
By Beth Cody, Guest Opinion
Iowa City Press-Citizen
November 3, 2005

There is a long list of good reasons why public power is a bad idea for Iowa City, many of which have already been clearly outlined in other opinion articles. However, one reason that has not yet been touched upon is an economist’s one: the dismal failures of past experiments with expanded government.

In the first half of the 20th century, socialist regimes around the world nationalized their economies and industries with disastrous results. Because government-run industries cannot accurately predict demand for products or efficiently produce them, the result was shortages and long waiting lines for some products and massive oversupply of other unwanted ones.

The world has begun to realize the folly of relying on government to run everything and is moving away from socialism and toward free markets and private enterprise, the institutions that have made America so wealthy. Even our poor have a higher standard of living than the average citizens of most socialist and ex-socialist countries. To find proof of this just look at how people from those countries vote with their feet, leaving behind everything and often risking their lives to come here. The countries that have embraced capitalism are reaping the rewards with astounding growth in living standards. Even more moderate “social democrat” European countries such as Germany are beginning to realize that they must adopt free market reforms in order to stimulate job growth and economic vitality. Why then are we in Iowa City considering taking a step backward, to increase the authority and administration of our government?

Ask yourself: How often has the government done anything more effectively and efficiently than the private market? Look at what happened in the aftermath of Hurricane Katrina: FEMA and the other government relief agencies were paralyzed by red tape and ineptness at all levels. Private sector firms, by contrast, knew just how to handle such an emergency, sending truckloads of vital supplies, including free bottled water, to staging areas to wait out the storm. Yes, they were motivated by profit, but do you think that mattered to the people who desperately needed their low-priced items to survive? They undoubtedly saved the day for many Louisiana residents. Once again, the private market outperformed the public agencies.

Private companies hold costs down to maximize profits, but government-run institutions have no incentive to minimize costs (we’re all familiar with “pork” projects and $800 toilet seats.) And government institutions actually have a disincentive to be effective. If a program is failing to provide good service, its proponents will argue that it is not adequately funded and needs more “resources” (read: your money). They are in fact rewarded for poor performance. It stretches credibility to believe that a government-run utility will be able to provide the same level of service that we currently have for the same rates, even after taking the private need for profit into consideration.

Mid-America’s Iowa City rates might not be the lowest in the state, although they are in the lower half of rates for Iowa’s comparable non-generating communities. However, we have reliable service and reasonable, predictable rates. Why take risks to “fix” what isn’t broken?

A small minority of Iowa City residents seems to long nostalgically for the “good old days” when socialism was still taken seriously as a viable economic system. Those days are gone, and for good reason. Taking jobs from the private sector and making the government even bigger seems foolish, to say the least. Haven’t we learned anything from the mistakes of history?

Citizens for Public Power want you to give government the power to decide whether to pursue “nationalizing” an important function. Listen instead to history’s lessons and don’t give government that power -- Vote No on November 8.