Don't stop till you get enough

In the summer of 2000, California was enveloped in a major energy crisis. Citizens throughout the state found themselves literally in the dark as rolling blackouts swept along the coast.

At first, there appeared to be little in the way of explanation for the state of affairs. Were electricity sources simply drying up? Had California reached some kind of tipping point?

In truth, the crisis had nothing to do with any natural cause-and-effect. It was a result of nothing more than unbridled greed.

Starting in 1998, state regulators had started setting up what they assumed would be a competitive market for power suppliers. But when they finally removed the cap on prices in 2000, power traders went to town. They jacked up prices by creating artificial shortages. They closed down plants for unnecessary maintenance. Power distributors, who still had a cap on the price they could charge consumers, were left scrambling to supply electricity. They couldn't afford to keep up with demand. Planned expansions were put on hold. The number of outages increased. People found themselves trapped in elevators and seniors were left without air conditioning.

It was a running disaster that continued into the following summer. And throughout it all, energy traders sat in their offices like horrid little gnomes, laughing at the havoc they had wreaked.

Taped conversations between traders, released by authorities in 2004, revealed the extent of the collusion, as well as the cold-hearted mockery that went with it.

"Just cut 'em off," said one Enron trader, laughing. "They're so f----d. They should just bring back f-----g horses and carriages, f-----g lamps, f-----g kerosene lamps."

When a forest fire threatened to down a major power line, creating yet another opportunity for price gouging, traders watched the news coverage with glee. "Burn, baby, burn," one crooned.

Less than a decade later, little has changed. The world, no less, finds itself in an economic meltdown. Financial gurus clamber aboard radio and TV shows to offer their best guess as to where things went awry.

"Greed," says one, "is the root cause of this crisis."

Holy hedge fund! Do ya think?

That anyone could come to such an inane conclusion is symptomatic of our complacency about the long-established perils of greed. Greed is not the cause of this crisis, any more than gravity was the cause of the Titanic's sinking. It's the dwindling controls on greed that are the problem.

"Greed, for want of a better word, is good," says Michael Douglas's character in the 1987 film, "Wall Street."

Douglas was supposed to be the film's antagonist, but his character's ability to cut slippery deals and bend the rules is obviously still the paradigm for Wall Street magnates today.

Greed is not good. Greed is everyone's demon, from the person who steals cake from the lunchroom to the politician who's caught with his hand in the government till.

While we must be vigilant in setting up oversights to guard against such opportunism, we must also stop treating greed as if it were only a harmless vice or, worse, a virtue. For if people assume that getting away with something is sufficient reason to indulge their greed, then we have an ethical gap that no amount of regulatory stringency can fill.

Former PC leader Ed Byrne understands too well the perils of greed. His spectacular fall from grace should be a lesson for us all.

Peter Jackson is The Telegram's editorial page editor. He can be contacted by e-mail at pjackson@thetelegram.com.