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Here we go again

Lead Summary
By Jim Thompson
HCP columnist

Oh, how I wish all politicians were required to have a degree in economics. Not the Paul Krugman style of economics; his are more closely related to Stalin’s, but rather the Thomas Sowell style of economics – economics closely related to common sense and how humans actually behave.

"Here we go again" relates to the drug price controls in the recently passed Democratic Senate “Whip Inflation Now” bill (my title, with apologies to Gerald Ford).

This new bill puts in place price controls for some Medicare-provided drugs. The last administration to gloriously fail at price controls was Richard Nixon’s, when he put price controls on everything, causing years of shortages and a decade of serious inflation.

Politicians who think the government can fix anything, irrationally think price controls work. Price controls never work and when finally loosed, create unbelievable inflation.

Just ask New Yorkers who have lived under rent control since almost the end of World War II. When you go to Manhattan, you easily detect buildings under rent control. They are dismal, shabby and maintained only to a minimum level.

Price controls cause shortages and shut down innovation. Politicians who promote price controls are like timid pilots that want to fly with one foot on the ground. Doesn’t work too well.

Another great example was the old highly regulated (and hence price controlled) AT&T. When it was broken up in the early 1980s, competition flourished and we had all sorts of innovation in the field of telephony, eventually leading to the cell phone and widespread internet accessibility.

Same thing happened when airlines were deregulated. And yet again, the same when trucking was deregulated. These both happened during the Carter administration – about the only thing Jimmy got right.

Free and open markets with only a light regulatory touch from the government result in innovation, more plentiful products and lower prices. Price controls stifle innovation and promote scarcity. These are conditions that have been duplicated time and again, in all seasons, in all places, under all forms of government. Heavy-handed price controls simply do not work; in fact, they cause an opposite effect of that desired.

Yet, here we go again.

Then, there are the other parts of this bill. Trying to skew the energy markets with subsidies and controls will have a similar effect to that provided by price controls. There are conditions related to the laws of thermodynamics that cannot be changed by legislation.

It is like trying to repeal gravity. Most of the Green New Deal falls into this category. Legislators with no idea of the laws of physics and its subset, thermodynamics, think they can just pass laws and the outcome will be as they wish.

The icing on the cake in this bill is the 87,000 new IRS agents, put in place to audit the rich. Who is rich? Well, it doesn’t take much to be worth $1 million today (thanks to past inflation).

If you have good Highland County farmland, it only takes about 170 acres. Or perhaps you own a new John Deere Class 9 combine with a 50-foot draper head. That set you back nearly a million bucks, so you must be at least a millionaire.

The IRS says this staffing increase is needed to go after the “rich.” Well, if you are a millionaire – and that becomes a lower and lower threshold each year thanks to inflation – you’ll find that you belong to club of about 20 million other Americans.

Doing a little math, this new crop of agents means there is one agent for every 230 millionaires. Since there is one congressional member for every 700,000 citizens, you’ll have a better chance, by about 3,000 times, of knowing your IRS auditor than knowing your congressional representative. Isn't that comforting?

Ignorance and an obsessive need for control among the ruling class has and will continue to cause us a great deal of pain. This is our fault as voters.

The population does not ask the right questions of the candidates when they are out on the campaign trail. Instead of listening to their empty promises, let’s interview them as we would job candidates (which is what they are). Let’s ask them what their education is, what practical experience they have, who they seek out for advice on the complex economic and technical subjects of today. Let’s ask them their view on individual freedom. Then, vote accordingly.

Stop voting based on promises that are never kept. This approach is not providing us with the qualified politicians necessary in today’s world and is leading to the destruction of the United States.

Jim Thompson, formerly of Marshall, is a graduate of Hillsboro High School and the University of Cincinnati. He resides in Duluth, Ga. and is a columnist for The Highland County Press. He may be reached at

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