In Broad Daylight
By Paul Krugman

"You are one of only a handful of major players selling wholesale electricity. Surely the thought has to occur to you: what would happen to prices if one of my plants just happened to go off line? And when companies act on that thought . . . well, you get the picture."

I wrote that in March 2001, when the California electricity crisis was at its height. Even then the experts I talked to — economists who followed the situation closely, and kept an open mind — believed that energy companies were deliberately creating shortages. But only in the last few weeks, with a series of damning reports and judgments, has conventional wisdom grudgingly accepted the obvious.

And that's the real mystery of the California crisis: how could a $30 billion robbery take place in broad daylight? [read more]