Dispatches > The Buzz


Issue: "Trading places," June 30, 2001

CONSUMERS GET MILKED: Jim Jeffords's departure from the GOP may have a silver lining: cheaper milk. A Wall Street Journal editorial reported that the Vermont senator's pet project, the Northeast Dairy Compact, has inflated prices by 20 cents a gallon in New England. The cartel "was created in 1996 to 'stabilize' the dairy industry by dictating a minimum price farmers are paid for their milk." The Senate did not reauthorize it in 1999, but Sen. Jeffords maneuvered it into the federal budget with one catch: It expires this September. The compact has grown in popularity, according to the Journal. New York, New Jersey, Delaware, Pennsylvania, and Maryland want to join, and 14 other states are trying to start a Southern Dairy Compact. But Sen. Jeffords has lost his leverage over Republicans on the issue. "Unless it's rammed through as part of a political horse trade, it's hard to see how anyone justifies dairy compacts with a straight face," the editorial argues. "They are basically a highly regressive tax on milk drinkers, starting with school-age children. Creating them is a tacit endorsement of the OPEC [oil] cartel model. Claims that it doesn't gouge consumers are preposterous." SCOUTS HONORED: The Boy Scouts won a narrow political victory in the Senate. A 51-49 vote passed a bill to guarantee the group equal access to public-school facilities under threat of losing federal funding. The Helms Amendment also protects similar groups that "prohibit the acceptance of homosexuals." Pro-free speech liberal Nat Hentoff wrote about the bill in The Washington Times, noting that a large list of groups signed a letter protesting it, including the AFL-CIO, Anti-Defamation League, National PTA, and United Church of Christ Justice and Witness Ministries. He complained that those who "cherish their own right to associate with like-minded people" would deny the same to others, and have unfairly made the Scouts national pariahs. "Should the NAACP be forced by the courts or by the ACLU to allow adherents of white racist organizations to take leadership positions in the NAACP?" he asked. "Should disability-rights groups be compelled to have disciples of Dr. Jack Kevorkian in leadership roles?" Democrats countered with a proposal by Barbara Boxer (D-Calif.) barring schools from denying access to any youth group on the basis of their views on sexual orientation. This would mean that schools could not keep pro-gay meetings off campus. SUPPLY AND COMMAND: Months after California utilities went out of business because state law required them to charge consumers less for electricity than the price they paid for it, Gov. Gray Davis is now going after the wholesalers. Specifically, he demanded that the federal government put the arm on power generators for $9 billion in refunds because they allegedly "bilked our state" with overcharges during so-called supply emergencies. Gov. Davis forgets that power producers were left holding the bag when those utilities went belly-up. They are owed an estimated $2.5 billion. Nevertheless, the head of the federal agency responsible for regulating electricity admits he's identified $124 million in overcharges, but no more. The real problem, says a Heritage Foundation study, is "foolish public policy" that seeks to defy the basic economic law of supply and demand. Artificially low prices give producers no incentive to supply electricity, producing blackouts. The federal government last week acceded to the governor's pleas for further price caps and ordered "market-based price limits" on future electricity sales across the West. These new price caps, Heritage warns, will make a bad situation in California worse. "In a state where rising prices are perhaps the only factor discouraging ever higher energy demand, placing caps on energy prices would be a recipe for more and sharper shortages." LOWEST LIBERAL DENOMINATOR: Salon, the much-hyped online magazine with a large following among liberals and literati, may become just another dead dot-com. The publishers announced that the Nasdaq stock exchange planned to boot the company's stock because it stayed below $1 per share too long. In a press release, Salon Media Group announced it's "considering seeking stockholder approval for a reverse stock split in order to comply with Nasdaq's minimum bid price requirement." Wall Street players typically see such moves as signs of deep trouble. Forbes.com reporter Betsy Schiffman noted that Salon is one of several desperate online companies now trying to "sell sex to make a quick buck." She noted that the company gave its shares a temporary rebound in April when it launched an "erotica" area as part of a premium subscription service. But the disrobing couldn't stop the delisting.

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