Monday, May 26, 2008

Big government is the problem, not the solution

One of the candidates seeking the presidential nomination of his party said that high gasoline prices will affect how Americans drive - gee, do really think? This is just one of the many profundities spoken by Barack Obama from behind his teleprompter.

We have seen gasoline prices go up strikingly before; sometimes we even had to wait in line for the privilege of paying more money so we could use our cars. The excuse then was we had a shortage of oil; which turned out not to be true. Nonetheless we were urged by the government to keep our thermostats low (the sweater business boomed), to drive the "double nickel", 55 mph, and buy gasoline according to our license plate number on alternate days. Suddenly the oil genie reappeared and we were able to mothball our sweaters, drive at a more reasonable speed limit and gasoline flowed freely into our gas-guzzlers, albeit at a higher price.

Today gasoline prices seem to rise almost hourly (alright daily then) and some of us may have to go into debt to keep our cars fueled; this is no joke, charging gasoline cost on credit cards with increasing unpaid balances is increasing our debt.

Everyone is feeling the pain of increased gasoline prices. But that's nothing compared to the rate at which the cost of other things has risen. For example, first class postage has risen 2,100 % in the last 89 years while the cost of gasoline has gone up 1,400% in the same period.

What's the reason for the higher increase in postal rates, the post office is a monopoly. Anything that is operated by a government approved monopoly has the privilege of charging as much as they want and has no incentive to reduce costs; consider utility rates - electric, gas and water companies have no competition so where else can customers go for their services?

Oil companies individually may not be a monopoly but they are collectively. Who can buck market forces to sell gasoline at lower prices? The government is of course complicit because it will not allow efforts to increase the supply or even to produce oil from different sources; we can thank global warming fanatics and environmentalists for that.

The U.S. government is the biggest monopoly in the world. Like all monopolies it has no incentives to economize. What's worse is that spending decisions are made for political reasons, not because the social benefits outweigh the costs.

The U.S. Postal Service has the power to increase postal rates at will and has no incentive to reduce costs. They recently purchased more than 30,000 ethanol-capable trucks to show their sensitivity for the environment. What has been the result, their gasoline consumption rose by more than 1.5 million gallons. A Postal Service study found that the new vehicles get as much as 29% fewer miles to the gallon.

We can expect the government will solve our energy problems with the same long rang thinking as the post office has. Aren't you glad we have the government to solve our energy and environmental problems?

The sad thing is we are not blameless in this tragic fiasco because we have approved big government at the ballot box. By looking to politicians to solve problems we surrender responsibility to the most wasteful, incompetent, and often harmful institution in the world - our government.

We are told we have to do something about our reliance on foreign oil, which is absolutely true. But how does the government propose to address this, with mandates for mass-produced ethanol and farm subsidies that drive-up the cost of food, while the decentralized sector of our economy is busy trying to create real solutions.

We have a choice. We can either continue to elect politicians who support centralized government solutions or we can elect those who will allow American ingenuity to take care of this for us.

If we rely on private enterprise instead of the government and remove artificial barriers to development, we will surely enjoy the same success that has made our country great. The only way to go is to prevent centralized government action because government is usually the cause of problems, not the solution to them.

1 comment:

Rebel Radius said...

"Capitalism demands the best of every man—his rationality—and rewards him accordingly. It leaves every man free to choose the work he likes, to specialize in it, to trade his product for the products of others, and to go as far on the road of achievement as his ability and ambition will carry him. His success depends on the objective value of his work and on the rationality of those who recognize that value. When men are free to trade, with reason and reality as their only arbiter, when no man may use physical force to extort the consent of another, it is the best product and the best judgement that win in every field of human endeavour, and raise the standard of living—and of thought—ever higher for all those who take part in mankind’s productive activity."

- Ayn Rand