Jewish World Review July 9, 2001 / 18 Tamuz, 5761

Thomas Sowell

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Consumer Reports

A political masterpiece -- SOME people were surprised when California's Governor Gray Davis hired two Democratic Party operatives at $30,000 a month to serve as spinmeisters during the current electricity crisis. But all indications are that they are well worth their money.

Think about it: Here is a state that has already had rolling blackouts and is facing more blackouts in the months ahead, not to mention losses of millions of dollars in taxes as businesses start leaving California, taking jobs with them, because they cannot get reliable electricity. Yet a recent poll shows that most Californians do not believe that there is an electricity shortage.

Could you or I have convinced so many people of such a thing under these conditions? Let's face it. We don't have the talent, much less the gall.

It has been a stroke of political genius to get Californians' minds off electricity and onto prices. If the focus is on electricity, then the big question is: Why don't we have enough? And the answer is likely to lead back to bungling politicians.

But if the focus can be shifted to prices, then it is just a matter of blaming electricity generating companies for "price gouging" and blaming the feds for not stopping them with "price caps." On Friday, June 29th, those who have been whooping it up over "price gouging" seemed at last to have come up with a smoking gun.

Three former employees of Duke Energy testified that the company deliberately shut down some generating capacity when it did not have to, in order to drive up prices and make bigger profits. This was a political gold mine, and the politicians were not about to lose it by allowing Duke Energy to testify on the same day with its side of the story. According to the San Francisco Chronicle, Duke will be allowed to testify "later this month."

In other words, these charges will be allowed to be repeated endlessly in the media, until they become "well-known facts" by sheer repetition before Duke Energy belatedly gets a chance to answer them. Meanwhile, Duke has had to buy full-page newspaper ads to try to get its side of the story out.

According to Duke Energy, it shut down when it did under direct orders from California authorities. The Los Angeles Times -- a liberal newspaper -- checked out this version of the story and found it corroborated by official documents. But do not look for this to get big, front-page headlines like the charges made by Duke's former employees. Nor is anyone likely to ask why these employees are "former."

At the heart of all this is the fact that you do not need proof for what people want to believe. And Californians want to believe that their problems were caused by others, not by their own refusal to let power plants be built or by their refusal to pay the cost of buying electricity elsewhere.

The value of Governor Davis' spinmeisters is shown not only by the success of their propaganda campaigns in the media but also by the apparently ineffective attempts of Duke Energy to defend itself. The full-page Duke ad proceeds in classic corporate style by pleading its innocence in an almost whimpering style: "Duke Energy and its employees are working hard to provide Californians with the affordable and reliable energy they need to power their homes and businesses."

The political spinmeisters could have told them that you don't get very far by replying to inflammatory charges by asking people to believe that you are innocent. You counter-attack by denouncing those who made the charges as either ignorant or liars. You tell the public that you don't intend to be used as scapegoats by politicians who bungled the electricity crisis. And you ask why they didn't dare let you tell your side of the story before.

Not only is outrage more credible than whimpering, it is more newsworthy, so that your side of the story is more likely to get mentioned in the media, when it has the spicy ingredient of conflict. Someone once asked General Douglas MacArthur to define defensive warfare. He defined it in one word: "Defeat."

Unfortunately, those who have spent their lives making economic decisions in the real world, leading to productive contributions to the economy and society, are seldom as good at political spin as those who have contributed nothing to the world except spin. Someday the truth about all this may come out but, if it comes out after Governor Davis is re-elected, who will care?

JWR contributor Thomas Sowell, a fellow at the Hoover Institution, is author of several books, including his latest, Basic Economics: A Citizen's Guide to the Economy.


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© 2001, Creators Syndicate