Think Freely Media presents Common Sense with Paul Jacob

It’s a dam shame.

There are plenty of private sector dams in the U.S., but the biggest are federal government projects, like those on the Columbia and Colorado rivers. These government-run outfits aren’t “free,” though. Indeed, they often prove to be good examples of typical government operations, providing special favors to some people at the expense of others.

Take the Hoover Dam, cherished as the nation’s highest symbol by MSNBC’s Rachel Maddow. The dam supplies water and electricity to Las Vegas, Nevada — at cut rate prices. A typical family in Las Vegas pays half for water what the same family would pay in Atlanta, Georgia, despite the fact that Atlanta gets 13 times more precipitation. These cheap rates have predictable consequences — overuse, for one. Which then leads local water authorities to foist on consumers some heavily intrusive conservation rules.

Andrew Wilson, in a report for the Property & Environment Research Center, writes that “A market-ready solution for Las Vegas water,” though not often talked about, would have far fewer negative consequences. And it’s not a difficult idea as such: “discard the historic cost-based pricing model and move instead to a pricing system that recognizes the scarcity value of water.”

Raising the prices for water and electricity to Las Vegas (and, for that matter, electricity to favored Bonneville Power Administration customers in the Pacific Northwest — along with many other federal government “business” products) would not only help forestall shortages and draconian lawmaking, it would be equitable. There’s no reason for the rest of the country to be, in effect, subsidizing Sin City.

Or any other city.

This is Common Sense. I’m Paul Jacob.

By: Redactor

3 Comments

  1. Dave Shaver says:

    So, Las Vegas doesn’t have enough water. And where do you think they want to get it? By buying up areas in Lincoln and White Pine Counties to the north, and in Western Utah where they can put in wells and building a $1B pipe line and draw from the Great Basin aquifer. This would gradually dry up the water supply of dozens of ranches and farms, and the scattered towns in the area. The people of these areas have been fighting this for years but they do not have enough votes to matter to the political powers in Las Vegas. Southern Nevada Water Authority is the driving force. Look into it.
    Thanks, Paul.

  2. Mark Read Pickens says:

    To Dave Shaver:

    If the price of water in Las Vegas was allowed to rise according to the law of supply and demand, as Paul proposes, people would automatically reduce their usage to avoid that extra cost. No rationing would be required because no shortage would exist.

    How is the political struggle between the people you cite and the “powers that be” in Las Vegas germane to that?

  3. […] Local Politics Shapes Federal Policy, economist Robert Meiners considers the political economy of America’s most famous dam: [M]ultiple states wrestled for control of the multi-state Colorado River and for control of the […]

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