It’s frustrating to see our head lawmakers head down the failed path of Soviet Russia: increased central economic planning. Since when is the government the best organ to question business ethics, considering the copious lobbying scandals in recent years? For some reason, few bat an eye when Senators somehow ascertain or can determine what level or profits are reasonable for one of the biggest U.S. industries. How can they really know what is “reasonable?” Do I want the government telling me my company’s profits are unreasonable, or telling me my salary is “too high?” This is sheer madness.
This is really the central premise of communism, or central economic planning: some wise individual, or oligarchy, better yet, can ascertain prices and fix supply and demand more accurately than the market can.
This fallacy is a proven failure. It was proved in Ludwig von Mises 1920’s work on Socialism, and has been proven many times over as central economic planning has failed to compete with free enterprise. So why are we turning to this failed dinosaur? How can adversarial Senators really know when prices are “too high,” or even the reasons for those high prices?
The idea that profits can be skimmed off, or are some excess that can be removed at will, is a Marxist notion that the owners’ and the proletariat are inextricably at odds. Are we really Marxist? Does Marxism accurately describe our world view?
The height of my frustration probably came at questions like this one by Dick Durbin: “Does it trouble any of you when you see what you are doing to us, the profits that you are taking, the costs that you are imposing on working families, small businesses, truckers, farmers?”
How can a Senator presiding over the largest deficit spending in history really say this with a straight face? How many hundreds of billions of dollars are being confiscated by the taxpayers, even by low and middle-income families? For the average low and middle-income family, how much is spent on taxes, regulatory, and compliance costs? How much money is being literally taken from us by Congress?
For a high-income individual, how much is spent on providing jobs and services for lower income individuals?
How much lower could prices be if taxes were lower?
On the other hand, what happens to the money they make? Where do they invest it? Who benefits? Oil companies, including the executives that preside over them, have a job to do: preserve shareholder value and provide a high value service to the customer (that’s you and me). That’s it.
If Congress thinks there’s some sort of collusion going on, then for goodness sakes make it easier for a new competitor to prove their point by providing a high quality service at a lower competitive price, thus siphoning away money, profits, market share from these supposedly greedy oil companies and the executives that head them.
Why does greed come and go with the business cycle? Why were these oil executives not greedy in the 90’s, for instance?
To Congress, I say stop being hypocritical. Focus on your own problems and that which you can solve (What can Congress do to decrease oil prices, or make it easier for low and middle-income families to make it?), not inextricable market forces beyond your control.