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Deregulation Stalls, and Enron Falls

by John Hoefle

The retrenchment and fall of an ``unstoppable policy trend,'' electricity deregulation (as legislators in California put it to opponents during 2000, ``you can't put the toothpaste back in the tube'') is analyzed by EIR economics researcher John Hoefle in a five-page study in our Nov. 23 issue. Here is its introduction.

Just a couple of years ago, electricity deregulation seemed to many to be an unstoppable force, and Enron Corp. appeared to be on a trajectory that would make it one of the most powerful companies in the world. At the time, Lyndon LaRouche, now a Democratic Presidential pre-candidate for 2004, warned that, contrary to widespread perception, deregulation would be a disaster and that Enron's piracy policies would destroy the energy sector, and itself. For many people who chose to join the cult of the quick buck, LaRouche's warnings seemed out of touch; after all, they believed, the market was proving that deregulation worked, and Enron and its fellow pirates were raking in the money hand over fist.

Today, the picture is significantly different. Enron's drive for world domination has ended in failure, deregulation is in retreat in most U.S. states, and many among the quick-buck cult have been bankrupted. LaRouche and the legislators and policy-makers who had the wisdom and courage to work with him battling deregulation, have been once again proven correct. The fight is far from won—energy is just an aspect of a raging fight for the future of mankind—but the rise and fall of electricity deregulation and its champions is an example of how the economic cannibals can, and must, be defeated.