Obamanomics and High Gas Prices

by | May 1, 2011 | POLITICS

Obama says there is no “silver bullet” or quick fix solution for bringing down gas prices. This may be true — but does this mean there’s no solution? First of all, it isn’t the government’s job to bring down (or drive up) gas prices. The government’s job is to stay out of the market. Right […]

Obama says there is no “silver bullet” or quick fix solution for bringing down gas prices.

This may be true — but does this mean there’s no solution?

First of all, it isn’t the government’s job to bring down (or drive up) gas prices. The government’s job is to stay out of the market. Right now, the government interferes in the market in numerous ways. The most glaring way is that government stands in the way of oil production in the United States. Obama has refused to permit additional oil drilling — or really any oil drilling at all — in the United States. As a result, there’s less oil on the market, supply is low relative to demand, and prices are higher than they otherwise would be.

Allowing for drilling is not a quick fix, either. But it’s the only rational step government can take, and it’s an example of why government should stay out of the way. Remember that the most dysfunctional parts of the marketplace are the ones where government interferes the most. Education is a mediocre mess — because government controls and subsidizes most of it. Health care is a growing mess — because government has regulated and subsidized it for decades, and is becoming more involved all the time. On the other hand, technological growth — computers, gadgets, smart phones — and the Internet have been much less regulated than these other sectors of the economy. As a result, customer needs come first and prices have been mostly coming down, not going up.

Obama may be a fool, but he’s not stupid. He knows all of this. He’s obviously not being honest. He says he wants gas prices to come down. If he did, he would immediately get out of the way so that oil producers could do their thing. He hasn’t, and he won’t. This is because he believes Americans should be forced to convert to a different form of energy — energy he considers more pure, and more appropriate. The problem is, there is no such energy that can compete with oil. Obama knows this, too. But all he can say to himself is, “Too bad.” That’s what he’s really saying when he claims, “There’s no silver bullet.” What he means is: “Oil and gas too expensive? Too bad.”

Why “too bad”? Because he wants to force Americans to change. If oil becomes more and more expensive, then Americans (Obama hopes) will be forced to consider alternative fuels. At present, manufacturers cannot sell “green energy” on the market, at least not on any wide scale, because there’s little or no profit to be made from it. But if gas prices go through the roof, that will change. By curbing and (best case, to Obama) destroying the market for gasoline and oil by making it too expensive for most people to afford, Obama thinks he can make people opt for things like wind, solar and other alternative forms of energy.

Imagine if the government had taken this stance back in the 1800s. Imagine if the government had decided that the horse and buggy should be replaced with something better, cleaner and more efficient. Could government have passed laws to make the manufacture and purchase of horses and buggies so expensive that people would gradually stop using them? If government had done this, would the automobile have come about much sooner? If so, then maybe government should restrict everything it doesn’t like. This will make human beings come up with better things. Clearly, this is insanity. But this is the premise implicit in all of Obama’s policies.

Obama’s error is the error of Communism, fascism and every form of force. Obama thinks that force will make people produce. He doesn’t think the profit motive is enough. For example, he doesn’t think that the desire to make a big profit is always a compelling reason to come up with a better, cheaper and cleaner form of energy to ultimately replace oil as the primary one. He thinks people will respond better to force than to profit. He probably thinks that force is more moral than profit. And we all know he certainly does not like profit. He has made that clear whenever he condemns those who make profit, saying they should be taxed at a higher rate, that their wealth should be “spread” around, and that America was made a great place by the poor and the middle class, and least of all by the wealth producers.

A government’s job is not to reinvent the wheel, and a government’s job is not to discover or invent a new fuel source. Governments don’t do this kind of thing, and cannot do this kind of thing. Only minds motivated by financial profit and/or a quest for knowledge ever discover or produce anything. People need to stop looking to government to do this for them, and stop waiting for government. People simply need to demand that government get out of the way and let profit-makers and innovators do the best they possibly can. Leave the best and the brightest unimpeded by self-anointed community organizers who don’t know much of anything.

Obama may think there’s no “magic bullet” for bringing down oil prices, but he surely believes government can come up with a magic bullet for replacing oil with an alternative form of fuel. Yet if such a market existed on any major scale, it would be on the marketplace by now, because there would be profit to be made in it. America elected a man as President who has no remote understanding of how business and markets work, and — more deeply — how the human mind works. Unfortunately, people will pay a higher price for gas and an even higher cost in lost innovation because of their support for this man.

Dr. Michael Hurd is a psychotherapist, columnist and author of "Bad Therapy, Good Therapy (And How to Tell the Difference)" and "Grow Up America!" Visit his website at: www.DrHurd.com.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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