Cheating the Free Market

In 1973 America got its first wake-up call in the form of the Arab-Israeli Yom Kippur War. That war brought with it an oil embargo resulting in long lines at the pump and even no gas at all in some places. For the first time, America began to realize its dependence on unfriendly countries and the unsavory nature of international relationships required to sustain its standard of living.

Over 35 years have passed since America got that clear call to action to achieve energy independence. Despite that early warning, America has made little progress towards energy independence. If anything, we are more dependent than ever. Why is this?

One faction of our population argues the private sector and market forces should be the ones to drive us to energy independence. If that’s true, then why isn’t energy independence already a reality? Instead, the “market” has worked to maintain the status quo. I spoke to someone recently who told me a story seeming to reinforce what I’ve been told. That story is every time investments are made to create alternative energy sources existing industries cut their prices sufficiently to drive the alternate providers out of business. Obviously, such a strategy not only leaves existing providers in the driver’s seat without competition, but acts as a deterrent to the next potential competitor and their investors.

The story my friend told me was he was contracted to deliver corn to a new ethanol facility. The recent reduction in gas prices, however, has driven the ethanol plant into bankruptcy. So now not only is there no emerging competitor for alternative fuel, but my friend is without a buyer for his corn.

So, what’s to be done? Here is an idea based on experience from another area of life.

If you have trained with weights for personal fitness, then you know how easy hitting plateaus is. You reach a point whereby your personal strength will not allow you to go to the next level in your development. Trying to reach higher levels of weight on your own is unsafe and risks personal injury. Overcoming this obstacle is possible using a common technique called “cheating”.

Cheating means you find a partner to help you lift a weight you cannot lift on your own. The partner puts one finger from each hand either on the weight lifting bar or the weight itself. They apply just enough pressure to get you past your sticking point so you can do the numbers of repetitions and sets you want to do. As a result, your tendons and muscles react with growth. Eventually this means you will be able to lift that weight on your own with no assistance. Further, this means you will be able to make more gains on your own until you reach your next sticking point. When you reach a sticking point, you “cheat” again.

Here is what this means to us.

I believe in the superiority of the free market and competition. Competition enables benefits to consumers such a better service and pricing. However, in this case the free market appears to be stifling competition and disallowing the emergence of alternative energy. Without alternative energy, America will remain hostage to other nations and continue to contribute to its own decline.

In this situation there are four major players. Those players are existing industry, emerging industry, consumers and government. Consumers lack the power on their own to enable an emerging industry to emerge to achieve the goal of energy independence. The only one of those players with the capability to temporarily override natural market forces and achieve long term energy independence is government.

Just as a weight trainer uses the cheating technique to be able to lift heavier weights on their own, we need to consider the need for government to do essentially the same thing to allow alternative energy to reach self sufficiency and America to achieve energy independence.

I.O.U.S.A. on CNN

CNN/US will broadcast the documentary I.O.U.S.A. on Saturday, January 9 at 2 p.m. EST and Sunday January 10 at 3:00 EST. The showing will be followed by a panel discussion. As you watch the show, you might want to note the following:

     -As horrifying as the numbers are you’re going to look at, those numbers were calculated before we had the financial meltdown we had this past fall.
     -The fact we were so deeply in debt before the meltdown causes us to aggravate the situation with the bailouts we’ve approved and are proposing.
     -Remember government has no money of its own to spend. It only has the money it takes from us through taxation or borrowing. What our government borrows in our name we will eventually have to pay back.

Please continue to stay with this Ezine and our Blog as we continue to explore how this happened, what needs to be done now, and how to prevent the situation we have now from recurring in the future.