Elkhorn Creek Lodge

The Economic as Political

Posted in economics, environment, politics by Eugene Podrazik on September 10, 2008

Now, we have the prospect of all sorts of federal interventions into the private sector. The latest is a proposal to bail out Detroit’s Big Three automakers. And, in this red-hot political climate, it looks like the tax payer may be on the hook for yet another economic disaster. Yet, for all of the valid arguments about the moral hazard of such interventions, we enter the conundrum of greater economic interventions into the private sector engender more and render simple economic activities political. A phenomenon alluded in the The Road to Serfdom by F.A. Hayek. 

Detroit’s problems are to some extent a product of their own making. But, some of these problems are because of events and situations created by situations that are political. In many respects, many of the problems that the Big Three auto makers were facing were being solved until the latest gas price crunch. And, four dollar gas was a situation created in Washington D.C.; not in the free market. Energy production has been a political football for the last several decades. The result is no meaningful expansion of energy production. Off-shore drilling, ANWR, new refinery construction, nuclear power all no, no, no and no. Do the thermodynamics, wind and solar aren’t going to be major players–ever.

The sudden rise in gas prices suddenly upended a recovery plan, particularly for GM, by rendering the very vehicles GM planned to sell untenable in this market. And, for many who in the name of global warming (er, now change) this was exactly the plan. So what Detroit planned to sell and what, with cheaper gas prices, consumers wanted was suddenly upended by political decisions and activities designed to specifically thwart such free market exchanges of such goods. What was an aesthetic on the part of some people who felt that others shouldn’t have access to such horrible goods as SUV’s and full-sized pickup trucks became reality by convoluted government fiat. Government fiat that systematically constrained domestic energy exploration driving up energy prices.

In the end, the simple act of pulling up to a gas station and paying money for a simple commody such as gasoline now becomes a political statement. And, as government intervention becomes even more omnipresent, with taxpayers holding the bag for even more economic activities, suddenly everyone’s private economic choices become everyone’s business; they become political.

Smoking in private establishments was once a decision by the bar owner to weigh the economic consequences of whether it was more profitable to allow smoking or not. It now morphs into laws in Southern California to ban the construction of new fast-food emporiums because of the “unhealthy” food served. In Chicago, it becomes a ban on foie gras. Or, for the Democratic convention last August, ridiculous requirements on the types of food to be served–including the color. Or, Palin mentions nary a word on abortion or guns, yet her actions draw the rage of the bi-coastal elite.  The mere act of knowingly giving birth to a Down’s baby, her private decision, is political.

It frankly becomes tedious to live each day having to somehow justify private decisions to every nit-picking activist who lose sleep nightly worrying that somewhere, someone is having a good time and I have to stop it. Wouldn’t it be nice if what we eat, drive, pump or shoot would be regarded as our own business; and none of your damn business.

And, wouldn’t be nice to recognize that there is enough creative energy out there to insure pleantiful and cheap energy without the belief that government has to somehow conjure up that creativity with taxes and regulation.

Drill for oil and watch gas prices drop. Detroit problem solved without a penny of tax money committed.




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