by Mitch Kokai
Senior Political Analyst, John Locke Foundation
I am glad California is having a drought. Not because I hate California (I love California) or Californians (I hate them only a little, for what they’ve done to California) or Central Valley farmers (some of my best friends . . .) or even Governor Jerry Brown, droll disco-era anachronism that he is, but because the episode presents an excellent illustration of the one fundamental social reality that cannot be legislated away or buried under an avalanche of government-accounting shenanigans and loan guarantees or brought to heel by politicians no matter how hard the ladies and gentlemen in Sacramento and Washington stamp their little feet: scarcity.
California has X amount of water at its disposal, and it has politicians in charge of overseeing how it gets divvied up. Which politicians? The same ones responsible for the current sorry state of California’s water infrastructure, of course.
Should be a hoot. …
… Governor Brown’s response is a textbook example of the central planner’s fatal conceit. He issued an executive order imposing 25 percent cuts on the state’s 400 local water agencies, which supply about 90 percent of Californians’ water but do not supply the farms that consume most of the state’s water. That 25 percent figure looks bold and authoritative, but when was the last time you saw the production, consumption, or price of a scarce commodity in the real world move by such neat increments? When something disturbs the equilibrium of the world’s oil markets — which happens every single day — then the markets make minuscule, complex adjustments, and continue to make them around the clock — the markets never sleep — with producers and consumers both modifying their behaviors to accommodate the new economic realities as they emerge. Amazingly (but not amazingly), this happens with no Governor Brown in charge of the process. You’ve never seen the price of pork bellies or soybeans simply jump 25 percent and stay there indefinitely, or rice or wheat consumption fall by neat round numbers. But Governor Brown imagines that he can rationally manage by fiat the consumption of the most important commodity in the world’s seventh-largest economy.
Good luck with that.