Roosevelt Understood the Power of a Public Option
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By ADAM COHEN
Published: November 30, 2009
As governor of New York, Franklin D. Roosevelt crusaded for “public power,” government-owned electric plants. He was outraged by the high prices that monopolistic utility companies were charging and by their refusal to bring electricity to rural parts of the state, which, they said, could not be done economically. Public plants, Roosevelt said, could bring power to those who needed it and serve as a yardstick for measuring and keeping in check the prices charged by private power companies.
Many decades later, a major point of contention in the debate over health insurance reform is the so-called public option, a government-run program that would compete with private insurers. Critics have tried to paint it as a wild-eyed experiment, but it echoes F.D.R.’s battles for public power — in fact, the entire New Deal he later created. The argument Roosevelt made — that a government program could fix the flaws in a poorly functioning private market — applies with even more force in health care.
In the early 20th century, electricity was a hot political issue. It was expensive and did not reach many parts of the country. To Roosevelt, it was an important social justice issue. “When he talked about the benefits of cheap electricity he did not think in terms of kilowatts,” a top adviser said. “He thought in terms of the hired hand milking by electricity, the farm wife’s pump, stove, lights and sewing machine.”
When he ran for president in 1932, Roosevelt made public power a cornerstone of his campaign. In a speech in Portland, Ore., he explained that it could be a “birch rod in the cupboard,” which the citizenry could use to punish private power companies that were gouging the public or not providing good service. Critics accused Roosevelt of Bolshevism, but he was not deterred. Public power was no more radical, he said, than the public mail.
F.D.R. championed public power as president. During his first 100 days in office, he backed a bill to create the Tennessee Valley Authority, a federal authority that brought affordable electricity to an impoverished 40,000-square-mile stretch of the rural South.
Roosevelt had hoped to create other projects like the T.V.A., to establish yardstick pricing power on a national scale, but it proved to be a heavier logistical and political lift than he expected. In 1935, he brought government into the electricity business in another way. By executive order, he created the Rural Electrification Administration, which used federal money and local farm co-ops to lay electric lines in parts of the country that private companies had no interest in serving. The R.E.A. drove down electricity prices and helped bring lighting, sewing machines and radios to the 90 percent of rural Americans who were without them.
more:
http://www.nytimes.com/2009/12/01/opinion/01Tue4.html?ref=opinion
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