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.”
With changed priorities, it’s time to re-evaluate my long-term goal
Federal checks are destroying incentive to take entry-level jobs
Attaining excellence may require some time in painful mediocrity
The cesspool is deep and toxic, but I’m to blame if I remain there
How can a child process seeing his mother trying to stab father?
Unexpected meeting forces me to believe I might fall in love again
There’s a lot to complain about, but miracle is so much goes right
Truth beyond physical world is hard for a skeptical man to see
Bernanke’s ‘helicopter drop’ gave $1.2 trillion to Wall Street banks