Political bargains of the past are the burden of the future

california-drought2It may be a, er, dry subject, but:  another great Holman Jenkins column, this one on the CA drought.

From California’s Water Woes Are Priceless:

California’s drought is frightful and a challenge for an 800-word column, since the problem can be solved in five words: charge realistic prices for water.

If homeowners paid two pennies a gallon instead of 0.5, they might take shorter showers and be more parsimonious with their lawns, but their lives wouldn’t change materially. If farmers found it remunerative to reduce by one gallon the 3.5 it takes to grow a lettuce, who doubts they’d make it work.

Yet for all the agonizing of the TV news and Gov. Jerry Brown, the appetite for a price solution is not only nil, it is undiscussed except by bloggers and op-ed writers. Movie fans know why: “Forget it Jake, it’s Chinatown”—California’s convoluted water politics. Imposing realistic prices on urban dwellers might be feasible, but up would go a cry, “What about farmers?” Then politicians would face a skein of favoritism and log-rolling practically beyond the power of democratic politics to unravel…

Making the desert bloom is a lovely sentiment but makes sense only if it makes economic sense: Using five gallons of California’s water to produce a walnut probably doesn’t make sense if water is realistically priced. But then neither does a forthcoming San Diego plant that would incur large energy costs to convert seawater into drinking water.

As the late economist and social thinker Mancur Olson taught, political bargains of the past are the burden of the future. The U.S., like California, is a country that has grown old thinking of itself as young. By now, we’re one of the world’s most aged experiments in representative government, and increasingly paralyzed by an accretion of calcified institutions like Social Security or California’s water politics

If America is not rushing down the tubes quite as energetically as Europe, it’s because in parts of our society (see Silicon Valley, see fracking) politics has not yet completely ruled out the possibility of innovation and surprise.  One of these innovative surprisers isn’t Gov. Brown, whose emergency plan doubles down on political allocation of water, imposing mandatory cuts on population centers. The purpose, of course, is to agitate voters to agitate Washington to do something, meaning free up water from elsewhere and give it to California

Water supplies will fluctuate, like any commodity. The real problem is a non-price allocation system that guarantees waste, shortages and political fights over water.

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