The Federal government’s non-defense resources ought to be tilted as much as possible in the direction of maximizing consumer welfare. Sometimes this means entire government programs, enterprises, or agencies need to be eliminated or consolidated. A hard look ought to be taken at non-defense related government-held corporations, particularly where government provides goods that are normally privatedly provided.
The Tennessee Valley Authority’s (TVA) assets probably should be unwound and sold off, as David Frum has suggested. Although the TVA receives no taxpayer money, its hard to imagine that the moving parts of a privately run TVA would not be more efficient and lower cost than the current government-run system. At the very least, a privately held corporation would have some actual accountability. The TVA is “not scrutinized by shareholders and, unlike traditional government agencies, it is self-funded, so it doesn’t have to justify itself to Congress to win annual appropriations.” The result? Last year, a TVA screw-up resulted in dumping “5.4 million cubic yards of waterlogged fly-ash” in the Emory River.
The TVA is the nation’s largest public utility. It provides power to 9 million Americans. And those 9 million Americans deserve power generation that gets them the most efficient, welfare-enhancing treatment.
The half-in/half-out approach of no Congressional appropriation oversight, mixed in with all of the effectiveness of a not-for-profit, Federal government-protected corporation simply screams inefficiency. Maybe the TVA is not in the same precarious position as the currently broke U.S. Postal Service, but there is no reason why the bulk of TVA assets: its dams, hydroelectric facilities, and power plants could not be auctioned off to the highest bidder.
Of course, getting rid of the TVA could be a precarious position for some members of Congress. When Senator Barry Goldwater ran for President in 1964, he included TVA privatization on his platform. For this, one voter reported that she could not vote for Goldwater because the Republican nominee planned to get rid of her TV. (This is not a winning position in America, even with the advent of cheap Hulu on the laptop or iPod.)
Oh well. At the very least, perhaps the TVA-run solar panels at Cocke County High School in Newport, Tennessee could be devolved away from Federal administration.
Zac Morgan is a law student at George Mason University and writes for the American Consumer Institute