The ABC’s of Government Intervention
Saturday, April 26, 2008 at 05:36PM Why is it a surprise that there is an international food shortage? When has government tinkering with free markets ever resulted in anything other than shortages, inefficiencies, higher prices and the like?
Wizbang says it best:
"The first thing I know about economics is that it does not take well to attempts to control it. Almost every single example I can think of where a government or other body has attempted to command the economy, it has worked out disastrously.
The current example of biofuels is just the latest. The government thought it would be a good idea to replace too-expensive gas with too-expensive food derivatives, and now we have food shortages in the US -- something that hasn't happened in a very long time, if ever.
It's kind of like the time in the 90's when the government thought it would be a good idea to "soak the rich" by taxing yacht sales. The rich just started buying and registering their yachts overseas, and the end result was the near-destruction of the American yacht industry, putting a lot of boat builders out of work -- very few of whom were millionaires." (my emphasis)
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Reader Comments (13)
Patty -
Unless and until these statist imbeciles recant or commit mass suicide, history will record that the drive to biofuels was only one of the first proactive measures made against glowball warmening. And yet this one act alone has brought about food shortages and caused food prices to rocket.
But we must go on, they'll say. We must continue to put our trust in these pillocks and our money in their hands for they can control the climate!
So no, they won't apologise and depart, because they never do. Sixty years of their calamitous social policies have destroyed the fundamentals of our civilisation, and still it goes on. Gordon Brown has taken us back to the 1970s in most respects here, so standby then for price controls and the return of the Milk Marketing Board.
Commentators are widely predicting a Labour defeat here at the next election, which will be within two years. I'm not so sure. We may be dead by then, having been starved during Brown's Great Patriotic Farm Collectivisations of 2009.
When has government tinkering with free markets ever resulted in anything other than shortages, inefficiencies, higher prices and the like?
And government failure to regulate the banks has helped to produce the reckless lending binge, followed by the credit crunch and recession in the USA. Now the same greedy bankers are crying for the state to bail them out.
Unregulated capitalism, the nirvana of Rightworld, always ends in tears. But neo-cons like Patty will never get it.
Peter: "Unregulated capitalism, the nirvana of Rightworld, always ends in tears"
Simply not true.
Show me one socialist country - that is to say a country with a top-down regulated economy - that has more innovation, more prosperity than the US?
Yes, there was speculation in the housing market. It was called a "bubble" and any one with eyes and ears knew it was bound to pop one day. And yes, there is now a market correction and those people who gambled on homes they couldn't afford are now losing those homes...and banks that gambled on risky loans portfolios are now suffering businesses losses - but that doesn't negate the fact that The US banking and mortgage market has allowed more individuals of all economic classes to buy homes than ever before.
Peter -
We have had market failure, that cannot be denied. But one reason for markets is that they correct themselves. If they do not, participants are punished further for their own bad decisions.
But there are reasons for this failure in what is a far from free market. Make a cuppa and then find out what the MSM hasn't told you, particularly the extent of government meddling and how it was crucial in creating the mess we're in:
Part 1:
http://www.samizdata.net/blog/archives/2008/03/what_youre_not.html
Part 2:
http://www.samizdata.net/blog/archives/2008/03/what_you_are_no.html
Peter -
By the way, a word on those demands for yet more taxes and travel restrictions and carbon allowances and supplementary other fascistic proscriptions that you support - they come from the same morons who have managed to devise a food shortage.
Just letting you know.
Peter,
What about Hong Kong? They're about as unregulated as you can get and they thrive.
Peter "BULLSHIT" you wrote:
"And government failure to regulate the banks has helped to produce the reckless lending binge, followed by the credit crunch and recession in the USA. Now the same greedy bankers are crying for the state to bail them out."
The problem was caused by the exact opposit. The banking crises was caused by the passing of laws and regulations forcing banks to end red lining areas and people. The regulations so loosened credit that people who couldn't afford a 100,000 home were able to afford a 300,000
one. It also loosened the restrictions on investment in property. End result collapse of the system.
As usual you have no clue what your talking about.
Hey guys
When Troll accused me of "Bullshit" I knew I musta hit the mark.
So it was commie interventionism and not unregulated capitalism that caused the credit crunch. Yeah right.
LOL!
Actually Peter, in the housing/mortgage crisis it was. The US government mandated that lenders lower their standards so that poor people's crappy credit and lack of cash couldn't be a factor in discriminating against their loan applications. It all kind of backfired didn't it?
Daphne
And there was me thinking it was all down to de-regulation! In the UK it was, but maybe in the US it was due to communism.
I don't think so!
It's just human nature isn't it. When things are going good we behave recklessly - as individuals and organisations. When we are out drinking and getting tipsy we don't think about the hangover - and when we are experiencing the hangover we think 'never again' but we never stick to that do we ? .
Peter, what do you call it when the government dictates to the private financial industry what the lending criteria should be? Especially when sound lending policies are overridden by government fiat?
Patty,
The alternative to unregulated markets is not socialism. There is not a successful economy on the planet which does not have elements of government, regulation, and public property. Somalia provides a good example of what happens when such things are missing, and with only a few exceptions it is a mess.
As for the 'free' market that has you in such thrall, big business abhors it and aside from anti-trust and the like it is not about to give up those tasty regulations any time soon.