Say It With Me: Supply and Demand

Charles Krauthammer nails it today in his latest Washington Post column (via Real Clear Politics), about the blatant pandering from Congress and the White House in response to rising gasoline prices:

Say It With Me: Supply and Demand

If you thought the Dubai port deal marked a record high in Washington cynicism, think again. Nothing can match the spectacle of politicians scrambling for cover during a spike in gasoline prices. And this time, the panderfest has gone all the way to the Oval Office. President Bush has joined the braying congressional hordes by ordering the Energy and Justice Departments and the FTC to launch an investigation into possible gasoline price-fixing.

What a disgrace.

It really is a disgrace, seeing American politicians so eager to run away from the free market system at the first sign of a price for a product that’s “too high.” Even more insulting is this crazy idea of sending every American a hundred bucks to ease the pain of paying $3 for a gallon of gas. That idea amounts to nothing more than vote buying. And they’re trying to buy us off with our own money, no less.

Businesses – yes, even Big Oil companies – even the company you work for perhaps, exist to make money. Profit is not a dirty word in America, or at least it didn’t used to be. It isn’t the job of Congress to decide how much profit is “too much.” Of course the Democrats, many of whom are in their hearts socialists, can’t be expected to respect the basic laws of economics, or the free market. But for the Republicans in Congress, there’s just no excuse.

Of course, much of the blame has to be put on the public, who seem ready and willing to quickly abandon free market principles as soon as things don’t go exactly their way. It’s really hard to imagine mere politicians respecting a principle when voters won’t.

2 responses to “Say It With Me: Supply and Demand

  1. It is true that it isn’t the job of Congress to decide how much profit is “too much” profit.

    That’s not even a job for capitalism.

    In capitalism there simply is no end-game. There is just no answer to how much profit is enough profit.

    The creation of wealth is posited by capitalists as a good thing. It often is, and you’ll get no disagreement from me about the power and beauty of capitalism when compared to manorialism, socialism, or most any otherism.

    However, without the idea of how much wealth is enough, every resource will eventually and inevitable be consumed, at increasing rates, in order to support consumerism.

    This is a great time to be an economist, as the proddings of environmental damage, so-called peak oil, and continuing cultural damage from greed all provide an obvious impetus for smart people (whether they be in economics, philosophy, or business) to revisit the underlying ideals and concepts of capitalism, and decide how to respond to the structural weakness of having an open-loop economic system where there is simply no answer on how much is “enough”.

    In other words “Supply and Demand” isn’t the whole story in a world with finite resources, and the continuing blindness to that issue will destroy capitalism just as surely as the continuing blindness to economic realities destroyed socialism.

  2. Pingback: The Unalienable Right » Democrats: Working hard to make gasoline more expensive, less available