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Wind of Change Challenging Utilities

July 13, 2015 by Llewellyn King Leave a Comment

On Feb. 3, 1960 in Cape Town, British Prime Minister Harold Macmillan shook up what was still the British Empire in Africa by telling the Parliament of South Africa that “the wind of change is blowing through this continent.”

His remarks weren’t well received by those who that thought it was premature, and that Britain would rule much of Africa for generations. The British ruling class in Africa – the established order — was shaken.

But Macmillan’s speech was, in fact, a tacit recognition of the inevitable. It was the signaling of a brave new world in which Britain would grant independence to countries from Nigeria to Botswana and Kenya to Malawi. Britain would not attempt to hold the Empire together. His speech was seminal, in that Britain had signaled that things would never ever be the same.

To me, the appearance of investor and entrepreneur Elon Musk at the Edison Electric Institute’s annual convention in New Orleans was a “wind of change” moment for the august electric utility. It was a signal that the industry was coming to terms, or trying to come to terms, with new forces that are challenging it as a business proposition in a way that it hasn’t been challenged in a history of more than 100 years.

But whereas Britain could swallow its pride and start a withdrawal from its former possessions, the electric industry faces quite a different challenge: How can it serve its customers and honor its compact with them when people like Musk, who is the non-executive chairman of the aggressive company SolarCity, and a passionate advocate of solar electricity, and Google are moving into the electric space?

At EEI’s annual convention, Musk didn’t tell his audience what he thought would happen to the utilities as their best customers opted to leave the grid, or to rely on it only in emergencies, while insisting that they should be allowed to sell their own excess generation back to the grid. Musk also didn’t venture an opinion on the future of the grid — and his interlocutor, Ted Craver, chairman and CEO of Rosemead, Calif.-based Edison International, didn’t press him.

Instead Musk talked glowingly about the electrification of transportation, implying — but not saying outright — that the electric pie would grow with new technologies like his Tesla Motors’ electric car.

The CEOs of EEI’s board were ready for the press by the time they held a briefing a day after Musk’s opening appearance. They spoke of “meeting the challenges as we have always met the challenges” and of “evolving” with the new realities. Gone from recent EEI annual meetings was CEO talk of their business model being “broken.”

The great dark cloud hanging over the industry is that of social justice. As the move to renewables becomes a flood, enthusiastically endorsed by such disparate groups as the Tea Party and environmentalists, the Christian right and morally superior homeowners, and companies like SolarCity and First Solar, the poor may have difficulty keeping their heads above water.

The grid, the lifeline of U.S. social cohesion, remains at threat. Utilities are jumping into the solar business, but they have yet to reveal how selling or leasing rooftop units — as the Southern Company is about to do in Georgia — is going to save the grid, or how the poor and city dwellers are going to be saved from having to pay more and more for the grid while suburban fat cats enjoy their sense that they’re saving the planet.

My sense is that in 10 years, things will look worse than they do today; that an ill wind of change will have reduced some utilities to the pitiful state of Amtrak — a transportation necessity that has gobbled up public money but hasn’t restored the glory days of rail travel.

People like myself — I live in an apartment building — have reason to fear the coming solar electric world, for we will be left out in the cold. The sun will not be shining on those of us who still need the grid. It needs to be defended. — This column was previously published in Public Utilities Fortnightly.

Filed Under: King's Commentaries Tagged With: Amtrak, Edison Electric Institute, Edison International, Elon Musk, environmentalists, First Solar, Harold Macmillan, King Commentary, renewables, rooftop solar, social justice, solar poeer, SolarCity, Southern Company, Tea Party, Ted Craver, Tesla, wind of change speech

Winds of Change in Washington?

August 29, 2011 by Llewellyn King 5 Comments

They are not a gale, not even a stiff breeze — more like a zephyr really — but there are winds of change stirring Washington. There are hints that when Republicans return from their travels and their time with constituents they will be ready for some righting of their ship, which has been listing heavily to starboard.

Over in Democratic circles there are hopes that President Obama, presumably buoyed by the fall of Tripoli, will tighten his grip on the helm and begin to assert himself in ways that his party has felt that he has been missing.

The Associated Press released the results of a new poll on Thursday that showed approval of Congress has dropped to 12 percent, down from 21 percent in June, before the ugly debate over raising the debt ceiling. The Associated Press-GfK poll taken earlier this month also showed that the Tea Party has lost public support, Republican House Speaker John Boehner is increasingly unpopular and that people are warming to the idea of not just cutting spending but also raising taxes, just as both parties prepare for another struggle with deficit reduction.

Stuff happens — and when stuff happens, the political dynamic is changed.

An earthquake and hurricane, for example, has convinced people along the East Coast the cutting the funding for the U.S. Geological Survey, as has been proposed, may not be so prudent. Likewise, the National Oceanic and Atmospheric Administration might need full funding.

Enter states in economic shock. From Maine to California, they are bracing for the impact of federal grants drying up.

At least two Republican governors, who were out in front with austerity programs, are looking less sagacious.

New Jersey Gov. Chris Christie, a Republican Party favorite, sacrificed a long-planned new tunnel into Manhattan on the altar of economic rectitude, just before it was becoming apparent that the only way government can really create jobs is through big infrastructure projects.

Farther south, in a burst of ideological zeal, Florida Gov. Rick Scott waved off federal stimulus funds for high-speed rail and other things. So the funds traveled up the coast to be plowed into road projects in Massachusetts, much to the joy of Democratic Sen. John Kerry who crows about his state's infrastructure progress. The wily presidential hopeful Texas Gov. Rick Perry denounced the stimulus package and then pocketed $14 billion for his state.

The lesson for those who thought that statesmanship lay in placating the well-intentioned but economically challenged Tea Party movement is that surgery with a machete is doomed to terrible results when a laser scalpel is needed.

Malcolm Muggeridge, the great British essayist and popular philosopher, wrote a prescient essay on the failures of reform. Of 12 major reforms, from the Russian Revolution to the ending of Tammany Hall political domination in New York, people who were supposed to benefit were left worse off.

The latter is an issue that Obama may want to ponder as his health care reforms are implemented. Without a public option to benchmark prices, he may have covered more Americans but, in so doing, allowed for prices to further escalate.

It is by the Republicans that the larger pressure for course correction is being felt. "No new taxes," increasingly sounds about as sophisticated as what spectators to the guillotining of French aristocrats chanted, "Off with their heads!"

The public wants government to do many and mysterious things, like invent the Internet, go to Mars, cure cancer, build better highways, and keep us safe at home and abroad. Whether we enunciate it or not, we want the government to look after us in areas of health, world stature, scientific discovery, defense, and food supply and safety. Business does not do those things, and even the most rugged of individualists cannot do them for themselves.

Ergo, we have to pay for those things and the credit card is maxed out.

Tax is back on the table, if not in fashion. Tax and judicious cuts in spending.

Members of Congress also read the poll numbers. At around 13 percent, their approval ratings do not make them feel good. Nobody likes to be told they are an incompetent bum, especially incompetent bums.

So for the first time there is some feeling that the super committee, which is set to tackle the deficit problem, may actually do something before Congress allows mandated cuts — the machete to start hacking.

Just a little more wind, and a grand bargain will be scented on it. Wet a finger and hold it up in September. — For the Hearst-New York Times Syndicate

Filed Under: King's Commentaries Tagged With: approval of Congress, Chris Christie, deficit reduction, John Boehner, Republican Party, Rick Perry, Tea Party

Out, Damned Washington! Out, We Say.

October 4, 2010 by White House Chronicle Leave a Comment

“Out, damned spot! Out, I say.” So says the demented Lady Macbeth.
Not demented but exercised, the tea party movement says, “Out, damned Washington! Out, we say.”

They say this even as they are trying to get into Washington themselves—indeed to take it over. And no Republican politician, no matter how aware of the naivete of this new dimension in conservatism, dare ignore them.

They are a force to be accommodated for now. In time, they will be blunted by being incorporated.

Running against Washington is not new. It worked like a dream for Ronald Reagan who preached the need to reduce the size of government but let it grow in wondrous ways. Astonishingly, he won re-election in 1984 by again campaigning against Washington, even though he had been president for the past four years.

Part of Reagan’s genius was in channeling the anger of Middle America to his purposes. He was so alluring a figure to Republicans that many were prepared to abandon businesses and careers to serve—often far down the ladder—in his administration.

In the far off days of Jack Kennedy, Washington still had its charm. Knowing people in Washington meant something—at least socially, if not financially and politically. Chicago bankers, New York consultants and Western cattlemen all came to Washington, where they would lunch with minor political appointees.

These lunches in the nation’s capital impressed their colleagues back home.
As in the Reagan years, capable businessmen (it was mostly men then) abandoned careers to serve in the administration.

Edward Stockdale, a successful Miami Beach realtor, gave up everything to serve Kennedy as ambassador to Ireland and in other ways. Bill Ruder, a brilliant New York public relations executive, quit his company just to serve as one of those assistant secretaries in the Commerce Department. His PR firm, Ruder and Finn, went into a severe decline without its top man.

There is a difference between those who came to Washington to serve in the Kennedy administration and those who came later, and with the same passion, to serve in the Reagan administration: The Kennedy recruits felt they were doing it for America, whereas Reagan’s people did it for Reagan.

This made them more political and, as a result, they were more frustrated. They wanted the world to know that their man, Reagan, deserved everybody’s adulation and respect. People like John Herrington, who worked his way from the personnel office at the White House to being secretary of energy, would explode with rage when people didn’t speak deferentially of Reagan.

There was plenty of the cult of personality around Kennedy, but it enhanced the idea of Washington rather than diminished it. Washington was cool in the time of Kennedy. Reagan was cool, but not Washington, in the time of Reagan.

For today’s tea party set, Washington is an alien bridgehead, manned by Euro socialists with U.N. numbers on their speed dials.

Anyone who has ever walked a picket line or joined a mass protest knows the joy of being at the barricades, the adrenalin rush, the thrill of righteousness. The tea party people have had enough and they’re not going to take it anymore.

So have most of us. We are the victims of insensitive government agencies, stagnant wages and large, faceless corporations with automated phone systems.
Any full-blooded citizen who doesn’t feel the rage ought to see a doctor—if he can afford that. The pull of the tea party is there.

But hating Washington is neither a remedy nor a policy, especially when there is no leader like Reagan to produce a policy.

It also is a trifle disingenuous to be trying to take over the place you have so reviled.

Without a leader, Washington will swallow the tea party activists, who will either drift to the center of Republican thought or settle for the no-man’s land of eccentric nobodies, like Rep. Dennis Kucinich, D-Ohio, on the left, and Rep. Louis Gohmert, R-Texas, on the right.

Weak tea, indeed. And poor Lady Macbeth died without getting the stain out.

Filed Under: King's Commentaries Tagged With: Dennis Kucinich, John F. Kennedy, Louis Gohmert, Ronald Reagan, Tea Party

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