One of the things I most love is when I make a pronouncement about something, and then events conspire to provide me with a ready-made example of why I’m right. It’s even more satisfying than when it happens beforehand. When that happens, I look merely insightful; when the evidence comes about right after I post, I come across as prophetic.
For example, I’ve written several pieces recently about economics, with the main thesis being variants of “whenever the government tries to fix things, they just screw it up, and the free market tends to correct itself quite nicely on its own.” (No, that’s not an absolute rule, but it’s true far more often than it’s not.)
For example, I’ve cited the price of gas in the United States.
The government response has been — to use a now-discredited but still potent analogy — schizophrenic. Some have argued to raise taxes on gas to subsidize alternate energy. Others have pushed for “gas tax holidays” for the summer. Some want to hike the taxes on the oil companies. But for the most part, the response has been a whole lot of talk and no action. (I find myself wondering how much energy could have been harnessed if we’d insisted that all the politicians who made all these arguments were forced to do so in front of a windmill.)
The one thing they proposed that actually passed was an overhaul of the Corporate Average Fuel Economy (CAFE) standards. Towards the end of last year, they changed the law requiring that automakers sell vehicles that get an average of 35 miles per gallon by the year 2020. Note that this is an average across all they sell; if they sell one car that gets 25 MPG, they have to sell one that gets at least 45 MPG to keep the “average” up or pay a fine. Note, also, that they are not required to offer the vehicles, but actually sell them — to people who have the choice to buy or not to buy. This leads to the companies offering hefty rebates on these vehicles, occasionally even taking a loss on the high-mileage vehicles.
Translation: “we’ll actually pay you to take this car, because it costs us less to lose money on this sale than to pay the govenment penalty if our fleet sales don’t meet their arbitrary rules.”
Well, that’s the government’s solution to the current problem: talk a whole hell of a lot, then pass a law that won’t kick in for well over a decade. I feel SO proud of our elected representatives.
So, how does the free market respond to the same pressures? With consumers actually acting in their own best interests, without the “help” of the government.
Cars outsold trucks in April for the first time in a generation, according to industry figures compiled by Autodata Corp., and four-cylinder powered cars outsold those with six cylinders under the hood.
Gee, why did all these people choose to do this now, instead of waiting to see what the government was doing? Could it be that they would rather take responsibility for their own fates, and not simply trust that well-meaning politicians and bureaucrats would — eventually — take care of their problems for them?
Nah. That would fly in the face of conventional wisdom, as evinced by the economic policies of the three leading presidential candidates, and who the hell could question them?
Anyone, I guess, with a smidgen of common sense.
Which excludes most politicians and bureaucrats.