>>Valley Patriot>> |
This is most likely to occur in cases where special interests benefit if the falsehood prevails. Let’s start with a simple example: Earlier
Consensus: We can ensure plentiful affordable housing by
passing rent control laws. History demonstrates that forcing rents below market prices leads to three results: First, it raises demand since prices are lower. Second it reduces supply since the financial rewards for building new housing are less for builders, owners and investors. Third, since demand for rent-controlled housing far outstrips supply and because investments in existing rental property are now less attractive than other investments, landlords have no incentive to maintain or repair their properties. Therefore, they let their properties regress to their rent-controlled value. The rent control fallacy is now understood by anyone that has passed economic puberty, but it took many decades for this insight to penetrate the general population. When you review the three effects of rent control listed above, they are as obvious as the nose on Barbra Streisand’s face. Why did it take so long to figure this out? Rent control is just one instance of Government-imposed price controls. When inflation was rampant in the early 1970s, our “Conservative” President Nixon imposed wage and price controls. Those 55 and older might remember the huge billboards in the front of grocery stores dictating the maximum prices for everything in the stores … from milk and bread to ketchup and mustard. Yet the results were predictably the same as for rent-controlled housing: increased demand, lower supplies, and shortages of quality products. How could a policy this silly be adopted? Watergate was bad, but this is what Nixon should have been impeached for. Hopefully we are past Government imposed price controls … but are we? The same logic that was used to argue for price controls on housing and groceries now are used for “holding down” the costs of healthcare: “These are necessities and people can’t afford them”, they say. But that is precisely why the government should keep out and allow the free market to operate. By letting supply and demand set the prices and the quality of goods offered, you ensure that existing supplies are not squandered and that suppliers are provided adequate incentives to supply the needed quantities of goods and services. The resulting robust and profitable market will attract additional suppliers, thus raising quality and reducing costs/prices through competition. This is precisely what we don’t see in the healthcare market due to government inter-vention in pricing, restraint of trade via licensing, insurance schemes that discon-nect consumer decisions from the cost of services, and other regu-latory interfer-ence with competition. If you want high quality and affordable healthcare, you can have it … just let Adam Smith’s invisible hand and the healthy greed of self-interest provide it. But economics is not the only place where the consensus opinion is routinely wrong. In foreign policy, this country assumed for decades that there was no way to bring down the nuclear-armed Soviet Union. Appeasement accompanied by Mutual Assured Destruction was the only answer according to the vast majority of Americans and government policy makers in both political parties. Tell the world that Communism was evil? Too brash. Confront the Soviet Union militarily? Too risky. Put missiles in Europe? Too threatening. Trigger an arms race? Too aggressive. Develop an anti-missile capability? Too costly. Put pressure on the Soviet economy? Too pushy. But a 3rd rate actor President, who was presumed to know nothing and understand even less, questioned the prevailing wisdom. He did all these things and, only seven years later, the Soviet menace crumbled. So much for conventional wisdom. Peace is a wonderful state of affairs. The prevailing wisdom is that, if Americans can all be reared to be peace-loving and to cherish peace above all else, we and the “global community” will all live in harmony forevermore. Michelle Malkin has a wonderful piece in this edition of The Valley Patriot that details the concerted efforts of those who are trying to indoctrinate our children with this mentality (see page 21). A local example of this was featured in The Eagle Tribune recently in an article entitled “Giving Peace a Chance.” It details “The Dove Campaign” (how clever) in North Andover’s Kittredge Elementary School in which “two artists from each grade were selected by their classmates to create a sign promoting peace on Earth.” Now I wonder, what would have happened if the “artists” illustrated a search and destroy mission to capture or kill terrorists. Ouch!! But this is much more likely to engender peace than holding hands and singing Kumbaya. We neither
prevented WW II nor resolved the Cold War by playing
kissey face. In fact there is no case on record of a
peace-loving people stopping the evil ways of a gang
intent on murder, rape and pillage by singing peace
songs. Are our peace loving students allowed to hate? … Are they taught to or allowed to hate genocide? Here are the top eight genocides of the Twentieth Century: Soviet Union (USSR), Communist China, Nazi Germany, Imperial Japan (WWII era), Communist Cambodia, Turkey (Armenian genocide), Vietnam, and North Korea. The total death count is on the order of 100 million. Did you see any Democracies listed? Could the record be any clearer? What do our children learn about these historic travesties? Why are we wasting our children’s time with peace posters when we could be teaching them timeless truths that will make America stronger and safer … and yes, make the world more peaceful? Education is another example of consensus opinion gone awry. Probably 90% of Americans support Public Education. Since the purpose of Public Education is, presumably, to provide our children with the very best education, it follows that people must believe that public provisioning of education must be the best way to achieve this end. But isn’t that an odd presumption? If the Government is so good at providing goods and services, why don’t we put it in charge of manufacturing automobiles? Or running our nation’s farms? Or baking our bread? Or running the trains … Ooopps … in effect, we have, and what a wasteful mess! Public education is a classic example of a vital necessity being captured by special interests. Is it any wonder that the outcomes are mediocre or worse? The public’s control of the inner workings of our schools is tenuous at best. Without competition, the public’s wishes can be, and largely are, ignored by school personnel. Is it any wonder that the special interests propagate the notion that the answer to education’s woes is more money? If only there was greater funding, they say, all the problems would evaporate. But when billions more are added, it is never enough; improvements never follow. The real solution is competition: First, competition by teachers and administrators seeking to provide better services to maintain their jobs and to garner higher wages, and second, competition between schools to attract students and their tuition checks. We know it works everywhere else. We know we want better educational services and better educational outcomes. So why do we hesitate? What are we waiting for? Finally, who doesn’t believe we have an energy crisis? The clear consensus is that we will soon run out of energy supplies. Over the next few decades, fuel prices will soar, cars will be abandoned on the highways, factories will close and we will freeze in the winter. Poppycock! Oil in the 1880s was over $1000/barrel in present dollars. In the 1970s it was roughly $90/barrel. Those who have to back their opinions with their own money are not betting on such high prices any time soon … just look at oil futures. As oil prices rise it becomes economical to search wider and deeper and to tap more difficult deposits of oil … thus stabilizing the price. If such attempts ultimately fall short, numerous alternatives exist to fuel our economy. A significant rise in oil prices will make economical a nearly infinite supply of energy from other sources such as coal tar, natural gas, wind, solar, and hydrogen … not to mention nuclear fission that remains untapped only because a band of troglodytes hoodwinked public opinion. And this expansion of energy alternatives doesn’t account for the natural improvement in efficiencies (the equivalent of additional supply) and other innovations that are encouraged as prices rise. Don’t lose any sleep as long as the free market is left to tackle the problem … buy the SUV you want and have no second thoughts. But all bets are off if you put the govern-ment in charge. Whether it is housing, wages and prices, healthcare, education, or energy supplies, the market is the proven solution. We are probably stuck with the Government handling foreign policy, but can we at least have the courage to raise our kids with the knowledge and backbone needed to protect our liberties? If not, nothing else may matter. *Dr. Ormsby is a member of the North Andover School Committee. He is a graduate of Cornell and has a doctorate from MIT. If you have any questions or comments, you can contact Dr. Ormsby via email: ccormsby@comcast.net *Send your questions
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I’m a contrarian, not because I’m
naturally ornery – although I probably am, but
because time-after-time conventional wisdom is later
proven to be untrue.