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A fifteen minute conversation with any free-market economist would uncover plans to reduce the cost of everything. Below, the attentive reader will find the essence of such a discussion.
Everywhere in the United States, the law of supply and demand continues to hold sway, although we find here and there performance politicians who pretend never to have heard of it. The Mayor of New York City, Zohran Mamdani, is one of the more persuasive pretenders.
The law of supply and demand holds that the cost of goods and services is directly related to the supply of goods and services. Energy, to choose one product, becomes more expensive as its supply diminishes. The same is true of housing. If the demand for housing is constant and the supply diminishes, housing becomes more expensive, further diminishing supply.
Here in Connecticut, new housing is becoming too expensive to produce. The expense may be mitigated in one of two ways. State government must produce policies that increase the number of potential householders, or it must produce policies that decrease the cost of housebuilding. It can do this fairly and equitably by refusing to choose winners and losers in a housing market. Building monopolies more readily occur in a socialist non-free-market, non-competitive, state arranged system heavily fortified by numerous regulations.
For instance, we might call a truce on the ongoing war between builders and performance politicians -- again, Mamdani comes to mind -- who assert that housing would be much less expensive if politicians were to add to the cost of housing by producing very expensive bills that increase the cost of housing. Former President John Kennedy tangentially touched on that point during a speech he gave to the Economic Club of New York about a year before he was assassinated.
What did Kennedy say?
He said, “There are a number of ways by which the federal government can meet its responsibilities to aid economic growth… the most direct and significant kind of federal action aiding economic growth is to make possible an increase in private consumption and investment demand -- to cut the fetters which hold back private spending. In the past, this could be done in part by the increased use of credit and monetary tools, but our balance of payments today places limits on our use of those tools for expansion. It could also be done by increasing federal expenditures more rapidly than necessary, but such a course would soon demoralize both the government and our economy. If government is to retain the confidence of the people, it must not spend more than can be justified on grounds of national need or spent with maximum efficiency.”
Federal and state business taxes and regulations increase the cost of business and should be, whenever possible, reduced so as to drive down prices. Mamdani and his accolades here in the Northeast counter that budget constraints do not allow such reductions.
Anticipating the objection, Kennedy countered that such measures as he was proposing would, and in fact did, substantially increase federal revenues by increasing business activity throughout the United States. His successor, Lyndon Johnson, benefited by the Kennedy tax reductions because they had occasioned substantial federal budget surpluses used by Johnson to finance his so called “Great Society” programs. Those programs, we now know, were oversold and underfinanced. Democrat presidents, using President Franklyn Roosevelt’s Great Depression era programs as a political template, have continued to offer programs that likewise are oversold and underpriced, such as Barack Obama’s Affordable Care Act (ACA).
In a recent column, Chris Powell writes:
“Yes, electricity in Connecticut is nearly the most expensive in the country, but this is less because the electric utilities are shareholder-owned, strive to earn a profit, and pay some executives excessively than because inflation has increased energy costs generally, the state lacks adequate access to natural gas and won’t use coal, and because state government taxes electricity heavily with its lately infamous “public benefits” charges… Connecticut’s schools are failing the poor, remain largely segregated racially, and still cost more every year without improving their results. The state’s transportation system is creaky. The state has a desperate shortage of housing, and homelessness is rising. State government’s pension obligations remain grossly underfunded. Municipal property taxes keep rising, also without an improvement in services to the public. The state’s cost of living is soaring and no one in authority even tries to reduce the cost of government itself lest government’s employees be offended... So whether he [Josh Elliott, Connecticut’s answer to Mamdani] is elected governor or is just re-elected to the General Assembly, Elliott should apply his socialist inclinations to those problems for a few years before trying to take the electricity business apart. Government in Connecticut has no competence to spare.”
New York for years has prevented the construction of a natural gas pipeline that would lower the price of energy in Connecticut by increasing energy resources, and reducing inflation – defined as too many dollars chasing too few good – is key to reducing prices everywhere. Prices are high because inflation reduces the purchasing power of the dollar. Solving economic problems cannot occur by offering the general public false socialist “solutions” that have caused market shortages everywhere, accompanied by oppressive, top heavy administrative socialist superstructures. Citizens in Venezuela and Cuba have not been oppressed for decades by greedy billionaires operating in a free market.
Socialists cannot help tinkering with the fundamentals of the market driven Republic established by the founders -- shrewd businessmen, most of them – at the birth of our nation, in an age relatively free of disabling socialist dogma. The nation in few days will collectively be celebrating their handiwork, the 250 year celebration of the signing of the Declaration of Independence. “Let there be bonfires and Illuminations from one End of this Continent to the other from this Time forward forever more,” John Adams wrote to his wife. And don’t forget the parades and bagpipes.
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