Every disaster is an opportunity for a fat payday

I checked Michigan coronavirus data today, data as of yesterday. The number of cases per day is about 1000, deaths per day is about 25. The downward trend from early January continues. We’re down to the plateau levels of July and August. The electricity is back on in Texas. Advisories to boil water continue. It will be a while before stores and restaurants can restock. Plumbers to fix split pipes are in short supply. And the weather isn’t so frigid. The worst is over, though getting back to “normal” will take a while. Even so, some are explaining what happened. Mark Sumner is doing that for Daily Kos in a post about disaster capitalism. He wrote:

When Naomi Klein wrote The Shock Doctrine in 2007, she described a system of “disaster capitalism” in which neoconservative free markets exploited extraordinary situations. Using excuses ranging from hurricanes to government overthrows, systems were instituted on “Chicago school” economics, with a laissez-faire anything goes policy for the wealthy, and a strict insistence that the government do nothing to help the poor. The forces behind this movement are well aware that neither nations nor individuals in the midst of crisis are equipped to negotiate fair long-term solutions. The whole point is. That can be people hawking water for 10 times its normal price. That can be companies selling electricity for 27,000% its usual rate. Those who impose neoconservative market systems are simply at the top of the scam artist food chain. Such systems insist on “austerity” when it comes to social programs designed to lift people out of poverty or buffer them from the next disaster. That’s because these buffers make people less vulnerable, and so less likely to agree to the conditions imposed by the disaster capitalists when the screws get turned again. These systems also insist that the other end—the end where billionaires play with options and financial instruments—has to be essentially unlimited. That makes every disaster an opportunity for a fat payday. … The incentives of that market are intended to keep the difference between supply and demand in Texas razor thin. The way that pricing is conducted under ERCOT means that the price of electricity can fluctuate wildly in a very short period on very small changes in the available supply. Those “spikes” in prices are the primary means by which the system incentivizes expansion of the electricity supply. And it really does provide incentive. It provides incentive to generate more spikes. This doesn’t require that electricity providers be “evil.” It only requires that they mirror the economist’s ideal of a “rational actor” when confronted with a system where limiting supply generates increased profit. After all, when providing less power generates more money … why not?