Government should send “price signals” on energy?
posted at 8:30 am on November 1, 2008 by Ed Morrissey
Just in case voters didn’t figure out Barack Obama’s economic instincts towards statism, this interview from 2007 on energy policy should open a few eyes. During the Democratic primaries, Obama had a lot more openness about his desire for top-down control of the economy, especially when it came to energy. In order to change the behavior of consumers, Obama argued, the government had to send “price signals” to deter bad decisionmaking … at least according to the Bureau of Acceptable Consumer Choices:
Q: How do you convince people to change their lifestyles, to live differently, or to turn the question on its ear, are voters ahead of the politicians on this stuff? Do they get it, and maybe the politicians don’t?
A: Well, I think, uh, I think voters do understand it. I think it is important for us to send some price signals to change behavior.
Is that the function of government — to fix prices as a punitive measure to change consumer behavior? It will be in an Obama administration. He and a few elites will decide which consumer behaviors are bad, and penalize it with price signals. That usually means taxes or tariffs that drive the cost upwards. I’d guess that Obama isn’t celebrating the fact that a gallon of gasoline will likely fall below $2 per gallon sometime this week.
When have we seen government send “price signals to change behavior” before? Oh, yes — in the lending markets. When government wanted more loans given to risky borrowers for political purposes, they sent “price signals” to lenders by having Fannie Mae and Freddie Mac buy up tons of subprime paper, and then mandated their conversion to securities to send “price signals” to investors. How did those “price signals” work out for taxpayers, consumers, and investors?
We’ve already had enough “price signals” from government to last a lifetime. We need government to get out of the “price signals” business and get back to normal regulation. Barack Obama revealed himself in this interview as the kind of politician who wants to manipulate markets for his own political ends, and is clueless about how disastrous those actions will prove.