ABSTRACT
The complexity of our health care system costs us a lot. It is the same in energy, particularly in the production and distribution of electricity. As in health care, a complex web of public and private sector companies contributes to high costs and poor services. This has its roots in the history of the electrification of the country, from Thomas Edison, George Westinghouse, and other pioneers, to the New Deal policies of the FDR administration. Standards, incentives, and regulations vary across state lines, so innovations have an uneven impact and price signals are not effective. The fragmentation of the industry and regulations has had a particularly negative effect on nuclear power, which broke construction and operating cost records when it was deployed in the U.S. It has also caused many deregulation attempts to fail, with dramatic consequences such as in California with the Enron saga and its collapse. Beyond high costs and some high-profile bankruptcies, we have experienced more electricity blackouts than other developing countries, some leading to riots and others to significant loss of economic output. Our drive towards clean energies such as solar and wind is constrained as well by the same lack of unified standards and policies. Just as in health care, though, complexity for all can also mean profits for some. Our oil and gas companies have accumulated record profits throughout the last decade, and even with much lower oil prices since 2015 are still very profitable – like health insurance and pharmaceutical companies, before, during, and likely after Obamacare.
