2008-09-13

Bush Attacks Market For Working

So now, the Confuser in Chief has decided to start a brand new war, this one is against the free market. Of course Republicans claim to want a free market, but few of them understand that having a free market involves things like not having corporate welfare, not having price and wage controls, and actually leaving people free to buy and sell based on what they believe to be best, not what some politician thinks best.

So now, Dubya the Decider has decided to crack down on anyone "taking advantage" of the changes in the oil market brought about by the hurricane by adjusting their prices to match reality.

Some who -- like Bush -- never studied economics, must be asking themselves "is this guy arguing for higher prices?" Yes, I am. Why? Because that's what reality requires.

For a time, there is less refining capactity in America. That means we are producing less gasoline. If we continue to attempt to consume the same amount of gasoline, we will have shortages. We cannot consume more than we produce. The free market has a solution to this problem. It's called a price. When the price goes up, people -- even people far away from the hurricaine -- will have incentive to consume less. Prices are always moving towards -- but never reaching -- the point where supply and demand are equal. Any change in production or in the value of consumption must be reflected in the price, or the market fails to work.

So what happens people are frightened by Bush's threat, and fail to adjust the price to match reality? Shortages, and lines. Waste, as people continue to use fuel which could serve more important needs for less important needs ... as long as they can get it. Then lines at the gas station as they try to replace the fuel they wasted, in order to meet their more important needs. We saw this in the 1970's, when the "free market" Republican in office imposed price and wage controls. Does anyone remember the lines at the pump, the "out of gas" signs appearing on gas stations? I do.

The lobotomized market Bush proposes is the road to disaster. A free market, as proposed by the Libertarian Party is the only cure.

4 comments:

Shawn said...

I fear the only way the general population will fully understand the free-market, is when this socialized system we have gets to a point that it collapses in on itself. I have hoped that would not happen. That we could convince enough people that the free-market is the only way to have persistent prosperity. I don't think enough people hear the message. The corporate media is complicit in supporting the state as a means to control the economy, and will not give face time to anyone promoting Austrian economics or actual free-market ideals. Lip service maybe. I fear I may have to move to New Hampshire if I want to see any kind of actual freedom in my lifetime.

cxx_guy said...

I'm looking forward to moving to New Hampshire (for those of you who don't know, http://freestateproject.org/). I must admit I dispair of seeing enlightenment in America's future. I do everything I can to bring it about, but I despair none the less. Oh, well. The up side is that statism, if not brought to heel by others, will eventually be brought to heel by the laws of economics. Collapse will be ugly, but at least we'll have a shot at freedom, if we're surrounded by well-armed and like-minded people.

This is the second reson to live in New Hampshire.

john bryan said...

Interestingly, higher prices lead to conservation. I drive a lot less now, and so do more Americans.

When people use less, demand is lower, and the price drops unless the supply decreases. We have seen this already this year.

The same people in Washington who want us to conserve want the price to be low. It's like opposing wetlands development but selling subsidized flood insurance.

Another thing to consider is, the higher prices get for fossil fuels, the more attractive alternative energy becomes. For alternative fuels to take off, one of two things has to happen. Either fossil fuels go up or alternative sources get cheaper. Windmills and solar power will not require subsidies or any promotion when they become the cheapest thing out there.

The free market means everyone decides for himself. Millions of these economic decisions every day! And the market responds.

I have friends who are environmentalists, and they see this point. They believe we are running out of fossil fuel, and my market explanation makes sense to them.

If we have subsidies and price controls, it will cause shortages as CXX Guy said. But also it will encourage waste and discourage development of alternative energy sources.

Don't be discouraged. People out there will listen.

Donnie said...

The long lines at the pump and the "out of gas" signs—didn't that take place during the Carter administration? That's what I had always thought, but I could be wrong.

As for seeing things like that again, I already have. I live in Nashville, TN, and after the hurricane hit Texas, the city of Nashville's fuel supply got cut off briefly. As a result, everybody freaked out and went and got all the gas they could. People were filling anything they could find that would hold gas, and some were even filling up their boats. As a result, 95% of the stations in the city were completely out of gas for about 3 or 4 days, at least. And then people REALLY started panicking. I saw the loooooong lines and "out of gas" signs. But I refused to freak out. I just walked everywhere I had to go the weekend it hit. And then I was able to get gas again a few days afterward. And somehow, the world didn't end in the meantime. Go figure.