Today's New York Times carries on the top of its front page an article that runs under the headline, "Surplus of Finger-Pointing In California Energy Crisis; Critics Tie Profits on Gas to Electricity Shortage." It's an appropriate headline, except that the ones being subjected to the surplus of finger-pointing are the New York Times readers who endure this article in which the Times itself dutifully parrots the complaints of "critics" and "experts" whining about the price of gas and electricity in California. The Times just doesn't seem to understand how markets work.
Today's article, for instance, reports, "In one significant case, California utility regulators and Southern California Edison, one of the state's struggling electric utilities, have accused the El Paso Corporation of using its control of a major pipeline into the state to inflate prices artificially." What's the difference between inflating prices "artificially" and inflating prices naturally? The Times never explains. Why should a business be faulted for raising its prices to what the market will bear?
The same Times article reports that, "Between them, El Paso and Southern California Gas were responsible for $3.7 billion in excess prices for energy in the last year, Edison contends." What constitutes "excess" prices? The Times never explains why a price is "excess" and what a non-excess price would be.
For a full half-page inside the paper, the article continues in this vein, dancing around the energy price issue without ever explaining how the behavior of the energy companies is supposed to have violated any rules of the free-market system, or of whatever other system the Times would like the energy market to operate under. At one point, the Times asserts, "Regardless of whether companies are manipulating prices, the California natural gas market is fattening bottom lines." Again, there's no explanation of what would constitute "manipulating" prices, as opposed to just charging the price that maximizes profits. There are laws about this, but, because the laws are obscure to all but a fairly small circle of lawyers and economists, it would be helpful if the Times would give readers some background.
At another juncture, the Times article says that "Federal regulators, concerned that the high gas prices in California may not be legitimate, have proposed requiring companies selling gas in the state to disclose extensive data about their transactions." Again, there's no explanation by the Times, no definition of what makes a price "high" or "legitimate." The Times article also refers to "problems in the California natural gas markets," but the newspaper never says what the "problems" are. Maybe the problem is the "fattening bottom lines." The Times seems to hate it when any business other than the New York Times Company makes a profit -- it's generally a sign of "excess" prices.
Taking Control: A front-page "news analysis" in today's New York Times reports on negotiations between the United Federation of Teachers and the mayor. "The teachers' union president says she is willing not only to see the mayor take control of the board of education but also to make it easier to dismiss bad teachers and reward good ones with some form of merit pay," the Times says. But as an editorial, also in today's Times, points out, the union proposal would allow the mayor to appoint only six members of an 11-member board of education, and those members would have to be from a list approved by a panel appointed by the state education commissioner. The proposal, the Times editorial says, "does not go nearly far enough in making the mayor accountable for the city's faltering school system." Well, if the proposal "does not go nearly far enough," then why is the newspaper's news department heralding it in today's front-page news analysis as a chance for the mayor to "take control of the board of education"?