Archive for February, 2008

Barak Obama is touting a tax credit for college tuition. I can only hope that this is just a promise and will not come about. I read recently that a politicians job is to make promises. It’s not their job to fulfill their promises, just to make them. Why would I be against a tax credit? One reason was given in a short interview on my local news station. The speaker said that students could go to bigger schools. In her opinion, the tax credit would allow students to spend more on education, but Obama wanted to help people save money on tuition. Left only to the market, if the price of education was too high then colleges would have to reduce their prices. The reason we might need a tax credit to help people afford education is if we are already doing something which inhibits this market mechanism. Instead of offering a tax credit to fix the regulation, why not just repeal that regulation which messes up the market in the first place? Why does “doing something” have to add more laws? Since the market works all by itself, why not make “doing something” mean getting out of the way of the market?
Sometimes it does it subtly and sometimes it does it obviously, but regulation always changes the market place in ways we may not understand. It seems to me that Consumer Law attempts to give power to consumers because some people are convinced that large firms have all the power. But do they? In a free market every trade is voluntary. There is no legal method to initiate force. Not even government can initiate it. Free market advocates often complain that there is no need for anti-trust or consumer law. Take, for example, the scenario of a dominant market player (like Intel) using its size to drive other players out of a particular market by lowering its prices so much that they are sometimes selling below cost. (more…)