Saturday, January 06, 2007

Deregulation Pro and Con

This is actually a post I made on another local blog, but it bears a good number of ideas that I have been kicking around recently.

This is supposed to be a free market society. As such, the price of commodities is supposed to be driving by supply and demand. The lower the supplies, the higher the demand, the higher the price. The higher the supplies, the lower the demand, the lower the price. These concepts are important to our way of life because they affect many different important social and political events in our society.Illegal Immigration-The key phrase here is that employers claim that there aren't enough workers. Illegal workers come and work for pay under assumed identities OR for less off the books pay. This keeps the cost of goods low but erodes the need to increase the minimum wage because without the demand for workers the pressure to raise the wages weakens. In addition, with less workers paying into the tax system through property or income taxes, the pressure to raise taxes on the individuals to make up the difference in local expenditures for services increases. Supply and demand.College tuition-Without regulation, boards of regents seek to defer foundations and other means of income and instead pass the bulk of economic increase onto the undergrads. They do this in many ways other than just tuition-there are fees some of which go to support programs that the avaerage student never taps into such as athletic programs and higher level grants. If you look at the state universities, their tuitions without the guidance of a regulation has far outstripped economic growth. There are students currently enrolled in UT or A&M that will graduate with the economic equivelent of a house payment in loans. And since many of them will not be getting those juicy jobs that pay six figures, they will either defer moving out of family homes, marriage, childbearing or default on their loans entirely. Look at the number of young people declaring bankruptcy. And that number will only grow. The state has been naive to think that these institutions work in favor of any student. These schools are solely in business of sustaining themselves by whatever means possible. Since students have to go to college it means that loans are at a premium, classes are crowded and jobs hard to come by in college towns. Supply and demand in this case failed because there was no true access to ANY college and since college select the students, they are by and large captive payers into a corrupt and manipulative system.Electricity and Power and Water-I would say that this along with water should be regulated by a state board and that ALL communities should be equal partners in the creation and paying of facilities to serve communities. In this past year the drought pointed out some communities such as Plano, McKinney and Allen that overbuilt for their water supplies. Instead of building lakes and reservoirs, they spent their money in building roads and giving large employers tax subsidies. That is irresponsible planning and makes the futures of these communities suspect. Do you really think ANYONE will move into a $300K home if they can't legally fill their swimming pool or water their lawn? Water supplies and demands are linked and higher prices will be the result.Likewise, we have a group of people armed with incomplete information that have restricted nuclear and coal powered electric generation facilities no matter how many safety features are put in place. Never mind that gas and oil are becoming increasingly precious to obtain and that they are often subject to the whims of unbalanced dictators. We could have been far down the road to independence from oil through developemnt of a wide range of sources including wind and solar along with coal and nuclear, but there are well meaning but ignorant groups that want to believe every solution from the state is the Beginning of the End. And since there are only limited sources for electricity, and groups keep limiting options, power will become harder and more expensive to come by.There are downsides to every solution, but sometimes you have to pick the lesser of two evils in order to survive. Saying we will have options down the road will not help us right now. Start looking for supply and demand in the issues and think about how it applies to most situations on the news and you will have new insight as to how our nation can and should work.

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