I liked this article from Ben Stein on Yahoo's finance page today. Here's his headline: "Playing Politics At the Pump."
Here's the link: http://finance.yahoo.com/expert/article/yourlife/34125
Here's the article in full below:
Posted on Thursday, May 24, 2007, 12:00AM
Back when I was a student at Parkside Elementary School in Silver Spring, Md., in the mid-1950s, there used to be a day each year when the class went to Annapolis, the state capital.
We would sit in the legislators' seats and pretend to be state assemblymen. Then we would sit in the state supreme court justices' seats and pretend to be jurists. We would even sit in the governor's seat (I think his name was McKeldin) and pretend to be governor.
But we weren't really legislators or justices or governors. We were just little fourth or fifth graders sitting in high officials' chairs. We didn't really have any idea of how to govern a state or judge a case or pass a sensible law. We were just kids.
Playing Government
Time passed, as it so cruelly does. I went to work at the White House for presidents Nixon and Ford. I worked with cabinet members and with the president. I occasionally (OK, rarely) sat in on cabinet meetings. I got briefings from high officials.
Here's a small part of what I learned: None of those big names was especially brilliant. None of them had any super-genius insights or strategies. They weren't Thomas Jefferson or James Madison -- they were just ordinary people with the same limitations all people have.
It occurred to me as I worked with those world-famous names that it was Annapolis Day back at Parkside Elementary all over again. We were just big kids in fancy suits sitting in the chairs of famous men and women, pretending we were smart and knew how to solve intractable problems.
But we didn't, and the problems persisted. If any got solved, it was usually just due to the passage of time or luck or circumstance. Or maybe it was the daily adjustment to change of hundreds of millions of Americans that solved the problems. It generally wasn't the hand of government regulation or the non-existent genius of the bureaucrats.
A Rush to Punish
All this comes to mind because I read that something called "the Stupak bill" just passed in Congress. This bill, named for a representative from the great state of Michigan, basically gives us a socialized energy industry. (As of this writing, President Bush has threatened to veto the bill.)
Of course the bill doesn't come right out and say that, because Americans are wary of socialism. But the Stupak bill allows the Federal Trade Commission (FTC) to issue findings of price gouging against energy companies based on the slenderest of assumptions rather than real evidence, leading to severe punishment for the companies.
This regulation could be triggered by actions that are basic to the free market -- for instance, when an oil company raises prices because there's a shortage of oil due to a revolution in Nigeria that shuts down production in the Niger Delta, or a hurricane that closes refineries in Louisiana.
In the most elemental terms, then, the Stupak bill punishes oil companies when the free market is working as it should, allocating supply by means of the price system.
Suffering the Consequences
When I say punishing the oil companies, I mean that the Stupak bill allows compulsory lowering of fuel prices. That will mean service stations running out of gas, long lines at the pump, and people unable to get to work or school or the hospital.
Who will really be punished when the bill is enacted? Not the top dogs at the energy companies -- they'll continue to be well paid. No, the drivers and homeowners of America who can't get gasoline and heating oil will be the ones to suffer. And ordinary investors who own stock in oil companies are also going to be punished. But everyone will suffer from indulging the fantasy that waving a government magic wand can solve real problems.
The FTC already had the authority to investigate price gougers based on real facts, not just prejudices. The Stupak bill adds nothing to that power. The Justice Department already had the power to investigate price fixing and collusion to violate antitrust laws. Both the FTC and Justice have the authority to go to court to enjoin and punish such acts -- so long as they're genuine.
There Are Always Alternatives
The Stupak bill is just a way for an eager Congressman to grab the spotlight and act as if he's found a better way to run the economy than the free market. He's just a big kid with a fancy chair in the capitol -- but he's dangerous, as little kids with power tend to be.
Mind you, I dislike high gasoline prices, too. I hate that so much of our money goes to petro-states. But socialized energy isn't the way out of trouble -- it's the way into trouble, a la the gas lines and "no gas today" signs of the early '70s. It's frightening how little we human beings learn from our mistakes.
So what's the way out for us? Drive less often. Buy a smaller car. Don't consider burning gasoline via aimless cruising as a legitimate form of amusement. Open the windows and turn off the air conditioner. Walk instead of drive. Stay home and read a book.
But don't socialize Big Oil -- that's a guaranteed disaster.
