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Roadmap for America


Why Liberalism Doesn’t Work




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David P. Price, PhD is responsible for this content, which is not edited by the Wilson County News or wilsoncountynews.com.

February 15, 2010 | 2581 views | 6 comments

At the recent State of the Union, the expectation was that Barack Obama would (similar to Bill Clinton) declare “the age of big government is over”. It didn’t happen. Why? Barack Obama is genuine. He sincerely believes liberalism can be used to make the lives of poor and lower middle class families better.

That is, there are two types of left-wing politicians. There are those who want to get elected by appearing as Santa Claus giving everything away. Then there are true liberals, who genuinely believe in what they are doing. As we have discussed before, true liberalism has noble purpose. The problem is, it doesn't work.

My first experience with liberalism came in Mexico. Working as an agricultural consultant, I was taken to a large dairy. Like many countries, Mexico controls the price of milk. The reason is clearly noble. To keep the price low so poor families can afford it and therefore poor children will have access to milk.

When I looked at what was fed to the cows, I was shocked. It contained no Mexican feed products!? Molasses is a byproduct of sugar refining, highly nutritious, available and inexpensive in Mexico. Yet there was no molasses in the ration? When I showed the owner how molasses and other Mexican feed products could be used to lower costs, he wasn’t interested? Why?

The owner looked at me and said, “if I lower costs, the government auditor will just reduce the price I am paid for my milk!” In years to come I learned this is the same all over the world. Whenever there are price controls, farmers do not see lowering their costs or increasing their efficiency as productive. Rather, they see lobbying their government for increased prices as their means to greater profitability. Ironically, the US does not have price controls (on most commodities) and has the cheapest source of food on the planet.

Another experience came from 1980’s Portugal. The Socialists had taken over the government and expropriated the land. Large landholders were removed and the land split up to be given to small farmers. The purpose was to allow poor families to own land. While this may seem “fair”, what happened is the small farmers only produced for themselves. They had a few chickens and hogs, a milk cow or two, a vegetable garden and produced only enough corn to feed their animals and themselves. Very few produced anything for the urban market. As a result, Portugal went from importing 25% of their food to 70%. This devastated the economy.

Fast forward to the US. In the early 1990’s the Clinton administration deemed it wanted poor families to be able to own their own homes. Certainly a noble gesture. They did this by mandating 40% of all mortgages be made to the “sub-prime market”. In other words, the government demanded loans be made to people who didn’t qualify for them?

George W. Bush who ran as a conservative (but was actually a liberal) not only went along with the Clinton initiatives, but allowed banks to reduce their reserve requirement by two-thirds! This exploded the amount of money available for consumer credit.

What started out as benevolent purpose (to allow more Americans to own homes), turned out as a bidding war with borrowed money. What finally resulted was an enormously escalated market to the point a responsible middle class family could not afford a home! In many markets, because of our policy, a minimum wage earner had to have family with housing, or be homeless (could not even afford rent)! The exact opposite of what was intended.

The fact is that liberalism is always well intended. Ignorance of Power takes many forms, but one of them is thinking government can change the laws of economics. The truth is all government can do is create false economies that we all pay for in the end.
 
« Previous Blog Entry (February 10, 2010)
 


Your Opinions and Comments
 
Rock'n chair Rambler  
Over Taxed, TX  
May 12, 2010 9:07am
 
 
"Man, did I mess up"

Don'tcha wish WCN would finally come up with a better comments section like 99.9% of the other news websites have - one that enables ... Read More Read More
 
 
4 th Generation Texan  
Sutherland Springs  
May 11, 2010 6:41pm
 
 
Man, did I mess up Margaret Thatcher's name...
 
 
4 th Generation Texan  
Sutherland Springs  
May 11, 2010 6:39pm
 
 
It's real easy to figure out why liberalism doesn't work...Market Thacher summarized it very well, "Liberalism(socialism) works well until you run out of everyone ... Read More Read More
 
 
Elaine K.  
Floresville  
May 11, 2010 2:32pm
 
 
I must regretfully inform readers of Dr. Price's columns that he passed away yesterday. He had been on a hiatus from writing since he took ill a couple of months ago. ... Read More Read More
 
 
Ken Semlinger  
Poth, TX  
February 18, 2010 1:50pm
 
 
"The trouble with our liberal friends is not that they're ignorant, it's that they know so much that isn't so." Ronald Reagan
 
 
Rock'n chair Rambler  
Over Taxed, TX  
February 15, 2010 12:29pm
 
 
Another problem with liberalism is that liberals never learn. They deny that their policies don't work, blame their failures on Republicans and bigotry, and attempt to do ... Read More Read More
 

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