Sunday, November 02, 2008

Can We Afford to Forget Obama’s Price Signals?

Obama said he wants to send “price signals” to change behavior. In other words, Obama wants the government to raise prices with regard to energy in order to change human consumption behavior.

In an interview on IPTV Nov. 2007, Obama said, “I think voters do understand it. I think it is important for us to send some price signals to change behavior.”

How would that come about? By using taxes or tariffs to drive energy cost upwards.

But government “price signals” don’t affect the rich. Still, Obama wants to protect the poor from the devastating effects of governmental “price signals.” So who pays?

In an Obama administration, the middle class pays.

Obama said “It won’t be painless.”

Yesterday Hot Air asked an important question that highlights the differences between conservatives and liberals. “Is that the function of government — to fix prices as a punitive measure to change consumer behavior?”

If you believe that it is a function of government to change, reward, or punish human behavior, then you are probably a liberal. But even liberals need to be asking some serious questions.

What human behaviors will an Obama administration decide to penalize next?

Hot Air recalled another time when governmental “price signals’ were used to bring about our present day financial disasters:

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 can thank the Democrats for that fiasco. And it’s just another reason why conservatives fear another Democratic administration!

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