It’s starting to look more and more as though Ayn Rand was a psychic or a prophet, at least when it comes to some economic realities more than 50 years after “Atlas Shrugged” was published.
Last July, I watched a mine operator tell a crowd here in Birmingham that he was quitting because of the attitudes of regulators and the public toward the work he did. Wednesday, I learned that six congressional Democrats are trying to make another part of Rand’s book come true. They’ve proposed a Reasonable Profits Board — to decide how much money oil companies are allowed to profit. The market clearly isn’t good enough for these looters and moochers.
This group of economic illiterates is led by U.S. Rep. Dennis Kucinich (D-Ohio). They want a board — completely appointed by the president — to set a target for what a “reasonable” profit would be for oil companies. Any profit that’s slightly more than that would be taxed at 50 percent of the “excess profit.” If a company’s profit reached more than 105 percent of the allegedly reasonable profit, 100 percent of the “excess profit” would be taken as a tax. The bill is called the Gas Price Spike Act.
There’s no such thing as a “fair profit” or a “reasonable profit.” Those things are determined by one thing and one thing alone — the price point at which a willing buyer and willing seller can come together. If there’s a profit at that point, the seller has an incentive to produce more of the product. If there’s not a profit, the product isn’t going to be produced, because there’s no incentive. People who naively believe they can regulate profits are simply trying to regulate prices from the other end. It won’t work — and there’s no rational basis on which to decide what is “reasonable.”
Fear of potential loss is a terrible reason to stay in the wrong place
If God had caused Tim Tebow to win, did He change His mind Saturday?
Love & Hope — Episode 14:
Does mainstream schooling model bring out the worst in teen-agers?
My programming from childhood still equates blame with shame
Market failure? Why do we have so many overeducated people?
Odd interest in UK’s royal family suggests remnant of need for ruler
My heart longs for a future that’s more real to me than the dim past
Genetics, culture work together to drive us to pursue what we want