The President, Socialism, and the TVA

In an interesting recent development, the Administration is taking a stand against big government socialism, and is being opposed by the Republican Party.  Those darn big government reds them. As Bloomberg reports, part of the Administration's Budget is a proposal to privatize the Tenessee Valley Authority (TVA), a proposal which is being attacked by Republican representatives of the area, including Senator Lamar Alexander (R-TN).

The TVA dates back to 1933, and was one of the most ambitious of Roosevelt's New Deal programs during the great depression. The creation of the TVA marks the beginning of the era of "Gas and Water Socialism", the idea that utilities such as power are "natural monopolies", and therefore need to be owned and operated by the government. Today, it mostly operates the area's power plants, but the Authority also had various other programs for developing the Tennessee Valley, including agricultural education and library services to what was, and still remains, one of America's poorest areas.

A mile downstream from Kingston, a 25 ft wall of coal ash

Interestingly considering this is a Democratic Administration, privatizing the TVA was an idea that President Reagan put forward as well. Unfortunately for critics, the TVA is incredibly popular in the area, across liberals and conservatives. Something Reagan probably should've already known from his time working at General Electric Theater: he called it one of the problems with big government, and got himself fired.

The Tennessee Valley currently pays significantly less for energy than the rest of the country, and whether because or despite, the TVA certainly gets the credit among locals. Prices went up dramatically in the nineties, in an attempt to make it competitive, and people are probably wary of a repeat.

I think this is a real example of how much the Democratic Party has changed between Carter and Obama. Part of the reason for privatization has got to be environmental concerns, which the TVA doesn't have a great record with. In '08 it dumped a flood of liquid coal waste from its Kingston plant, after a retention wall broke due to lack of maintenance. There was also the "Snail Darter Controversy" about the Tellico Dam: to listen to greens, the TVA exists mainly to murder endangered fish.  There's a film about government removal of farmers to make room for the Authority's hydroelectric projects, Wild River.  Clearly, government industrialization of the Tennessee Valley has some pretty obvious proponents and detractors within the traditional democratic coalition, and that the President has come out in against the TVA is part of the shifting composition of the democratic party.

Poor public management is a concern here, however.  The Kingston disaster could have been a lot worse, considering it also operates three nuclear power plants. The clearest summation of what selling the TVA entails is that without public backing, projects like the expansion of the nuclear facility at Watts Bar, currently over budget and behind schedule, would be for the scrapper.  There are things that government can do, that the private sector can't, but that's usually because they aren't very good ideas.

I think the President is right here. The TVA did a lot of good work during the depression, work that's rightly remembered in the Valley. Still, it is a holdover from a different time.  To keep operating it needs reform, reform that's easier if it isn't being run by the United States Congress.  The best case for privatization is that, without it, at some point, it probably won't be able to keep operating.  It's telling that Lamar criticizes selling the thing because, after liabilities, it probably ain't worth much.  These sorts of programs can't last forever, and weren't designed to.

Here's the case for the TVA though, by the Drive-By Truckers, far more poetically said than I can manage.  If you're worried though, somehow I don't think it's going anywhere.