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Obama's TVA gesture: Am this Bizarro World?

Am this Bizarro World? For years, Superman's Action Comics did their best to warn us about the existence of a creepy cube-shaped planet where everything was really its opposite. Come to think of it, Action Comics and the Tennessee Valley Authority are roughly contemporaries.

For decades, it was the left's worst-case scenario, the boogie-man story Tennessee liberals would tell each other around the campfire. One day, they said, conservative Republicans will take over--and sell off TVA to private interests!

President Eisenhower called TVA "creeping socialism" and hinted that selling it off might be the final solution. So did Ronald Reagan, more forcibly, in 1962--early in his political career (and late in his acting career), when he was trying to show America how conservative he was.

But when Reagan became the actual nominee of his party in 1980, he came to Market Square to speak to a big crowd just to assure us that he'd changed his mind about TVA, and had no intention of selling it off. He had become convinced of the importance of this particular federal agency. Not that it didn't need some trimming. Since then, Democrats and Republicans alike have been loath to suggest that TVA is not sacrosanct and permanent.

Now a president really is proposing that TVA be sold. And it's a reputedly liberal Democrat! And the suggestion of selling TVA to private interests is being opposed by reputedly conservative Republicans!

Launched in 1933, the Tennessee Valley was one of the most surprising parts of Franklin Roosevelt's New Deal. In the presidency that spawned the term Liberalism, TVA was maybe the most radical concept, a sweeping and comprehensive federal takeover of a troubled region, for flood and erosion control, agricultural improvement, power generation, and recreation, "For the People," as they said.  

TVA has evolved over the years into something more like a giant power company with unusual recreational responsibilities. But it's more complicated than it seems. It has not been supported by federal taxpayers in some years, and though "selling it off," whatever that may entail, would seem to suggest a major one-time infusion that could reduce the federal budget, the accounting gets very tricky.

"This is one more bad idea in a budget full of bad ideas," our Republican Senator Alexander said of Obama's gesture. "There is today no federal taxpayer subsidy for TVA, period. There is by law no federal taxpayer liability for TVA debt. And after deducting its debt, selling TVA would probably cost taxpayers money."
Alexander continued, "Finally, there is no assurance that selling TVA to a profit-making entity would reduce electric bills in the TN valley - which should be the overriding objective - and it could lead to higher electricity rates. While TVA management prefers a flexible debt cap, it has assured me that it can live within the current debt limit if necessary."

If the sale of TVA to private interests could lead to higher electric rates, of course, it raises a pretty basic question about conservative orthodoxy, that free-market competition always yields the best result for the consumer.

This is an interesting year.


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