Wednesday, October 22, 2008

The government wins by failing

When businesses fail to satisfy their customers, they produce financial losses, and if they don't improve their performance, they go out of business. The government, on the other hand, acquires more wealth and power by failing to fulfill its responsibilities. That's one of the main differences between government and business.

It is remarkable that the two current crises were both caused by federal government action, yet the government will become far more powerful as a result. Both the critical dependence on foreign oil, and the financial meltdown, were caused by the federal government itself.

In the case of the energy crisis, it was caused by the federal government's suppression of virtually all forms of domestic energy production. New offshore oil drilling? Prohibited. New Alaskan oil production? Prohibited. New nuclear power plants? Prohibited. New coal fired power plants? Prohibited. New oil refineries? Prohibited. Significant oil shale production? Prohibited.

Thirty plus years ago the federal Department of Energy was created to "solve" the energy crisis which began in the 1970's. Tens of billions of dollars have been spent. Have they solved it? The country is much more dependent on foreign oil than it was then. What is the result? Obama is talking about taking more money from the energy industry to give to the government to "solve" the problem.

If the government had allowed the energy industry to produce the ample energy resources we have for the past 30 years, we wouldn't have a shortage today. But because it has utterly failed to solve the problem itself, the government is now spending more and more on ridiculous schemes which have no chance whatever of reducing our dependence on foreign oil. Government has failed, but has gained power as a result.

Government regulation forced Fannie, Freddie, and the banks to make subprime loans which are at the heart of the current financial crisis. Yet, with the help of a compliant media, the government has turned this colossal failure into an opportunity to increase its power over the financial sector.

These are just two examples of a general principle that government wins by failing. Government agencies don't get increased funding when things are going well. They only get increases when there is a problem, usually of their own making. So if you want failure, support government efforts to take over additional areas of the economy.

Health care? If the government takes over, you can expect our 5 year cancer survival rate (for men) to change from the American level of 63% to the British national health care rate of 45%. Just think, 1 out of 3 people who survives cancer here, dies in England. Get ready for this "improvement."

With Obama likely to win the coming election, we can expect more government failure, and more government power as a result.

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