Thursday, May 1, 2008

My two cents...

First...

My use of Upton Sinclair's The Jungle wasn't to show that government doesn't do enough... it was to show that private industry can't be trusted to police itself. Had America allowed the practices detailed in The Jungle to continue while popular opinion caused the free market to grow a conscience, how many more people would have gotten sick and died? Yes, Sinclair blew the whistle, and yes, that prompted the Feds to do something... something the private sector wouldn't have done themselves, because it GOT IN THE WAY OF PROFITS.

This segues nicely into my next point...

If profits are the end-all-be-all of any consumer/production industry in the eyes of the government, and these industries can reach those profits fast and bigger by using unsafe or inferior means and practices... why does the government interfere? Why not take laissez-faire to its logical conclusion and simply allow corporate America to earn its keep however it sees best?

MY response is that the Federal Government's primary responsibility to ensure the safety and security of the general public and society as a whole, and where the general welfare of society conflicts with these corporate profit goals, the general welfare wins. If 5 out of every 100 people consuming canned meat from one particular canned-meat company come down with a case of mercury poisoning because the solder in the can contains toxins but saves the company 20% in production costs, then the 5% loss of revenue due to illness and death is certainly out-weighed by the remaining 15% profit, right? Where is the incentive to remove the toxic solder from the cans, if it means a net loss in the production process?

I have asked this question before, but I don't recall ever getting an answer... When in US history has so much of our society ABSOLUTELY depended on ONE resource the way it does now with crude oil? Why is it SOLELY the responsiblity of the consumer learn to "do without" in times of crisis, but not commercial industry? If it is to protect the investor's money that backs the "Big Oil" machines... then why not institute a national gas rationing program? Allow the companies to continue to produce and distribute fuel at their current costs and prices... but limit the CONSUMER on how much he can purchase over time. This increases the availability of the product, reduces fluctuations in consumer demand, lowers distribution costs, and provides greater supply for the national reserve during a time of war... which, last time I checked, we were in.

The success of rationing in the effort to win WWII wasn't limited to consumers (although they had the greatest share of the burden)... manufacturers and industries were selling to the Feds on adjusted contract bids... meaning the prices varied only semi-annually and were not 100% market-driven. This reduced cost to the government while still keeping costs affordable to the producers.

Should we limit households in America to 40 gallons of gas a week? This will remove the specter of "price caps" by placing the burden of reduced consumption directly on the average working family... rather than the bank accounts of corporations that have watched their profits climb 150% in a matter of months while the national economy tanks around John Q Public's ears.

Didn't anyone read my little scenario about the future of crude prices? It is not a great stretch of the imagination to think that crude could be at $250 a barrel in as few as 24 months... how does the economy function through that? The average American right now is paying 25% of their net income in fuel costs, with oil at $100 a barrel, so $250 a barrel means, what? 50% of our net income will then go to fuel, and the Big Oil companies can still justify QUARTERLY earnings measured in the 10's of billions?

If this were a luxury or non-essential commodity like orange juice or pork belly futures, I'd agree with you 100%... but every single facet of our society does not depend on bacon or frozen orange juice. It DOES depend on crude oil.

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