Obama White House Needs Lesson in Supply & Demand

Obama White House Needs Lesson in Supply & Demand

Printer-friendly version
a a
Type Size: Small

Michele Obama wants more kids to go to college. Barack Obama wants to drive college costs down. Someone really needs to teach this White House about supply and demand.

A data point: Today the Obama administration is set to destroy 600 tons – that is 1.2 million pounds – of illegal ivory that has been confiscated over 25 years. The mountain of tusks, ornaments and jewelry, seized mainly by border control agents, will be pulverized as part of the White House’s wildlife conservation effort.

Officials of the U.S. Fish & Wildlife Service hope the move will teach a lesson to those trafficking in illegal ivory.

Related:  White House Pledges $10M to Curb Wildlife Trafficking

I’m sure it will, though the takeaway may not be that envisioned by the White House. What could possibly benefit poachers and others engaged in the illegal ivory trade more than eliminating such a vast horde, which will almost surely drive prices higher? Why not give the stuff away instead – and make the horrendous slaughter of elephants less rewarding?

Daniel Ashe, director of the U.S. Fish & Wildlife Service, said at a press conference that he hoped to “inspire other nations around the world to deal with their stockpiles.” If those stockpiles are also large – and if all those supplies were dumped on the market simultaneously – you could really drive the poachers out of business, at least temporarily. Better yet – set up booths in local bazaars, and give the stuff away on a permanent basis as soon as it is collected by the cops.

In case this common-sense argument fails to convince, look at the many precedents here. Consider our war against drugs in this country. By making drugs illegal and otherwise hard to come by, we have not only driven prices higher, we have most assuredly financed worldwide drug cartels and underwritten their terrible violence.

At the same time, we have failed spectacularly to damp down the trade in narcotics. In Afghanistan, where we have, at last report, a sizeable presence, farmers have just enjoyed the largest poppy harvest – ever! Based on that bounty, the country produced 6,000 tons of opium – 49 percent more than the year before and more than the rest of the world combined. Way to go, war on drugs.

Or – consider Obamacare, if you can stand it. While the press is breathlessly reporting every new indication of what a monstrously bad bill this is, few are focusing on this simple truth: You can’t provide 30 million people free access to health care without driving up prices and limiting supply.

We are seeing the first blush of that reality settle in, as insurance premiums rise and access to doctors is limited. Seriously, what did people think would happen? Just because the government is the one handing out the money, the laws of supply and demand still pertain.

Returning to education, it is without a doubt wonderful to inspire young people to go to college. But we cannot keep doling out ever-larger amounts of financial aid and pushing more and more applicants into a relatively fixed number of higher education slots without inevitably driving up tuitions.

Related:  Here’s Why Colleges Are Flunking Cost Control

We have seen this already. Between 2000 and 2012, the number of students enrolled in degree-conferring institutions rose 34 percent; the number receiving federal aid rose from 32 percent to 48 percent and the average award nearly doubled. Student debt soared.

Meanwhile, since 1978 college costs rose an astonishing 1,120 percent – way outpacing medical costs (up 601 percent) and food prices (up 244 percent). Is there anyone who does not think there is a linkage here? Colleges private and public have to ration access, and even if they don’t do so overtly, price has come into play.

While it may sound fanciful to try to upend the heinous killing of elephants by undermining the economics of the ivory trade, flooding the market is a better approach than making supplies of the coveted material even scarcer. In explaining their approach, Ed Grace, another Fisheries official said, “There shouldn’t be a value on ivory.”

But here’s the thing: There is, and it’s higher than cocaine or gold. Unhappily, our government just made it much, much higher.

Top Reads from The Fiscal Times:

After more than two decades on Wall Street as a top-ranked research analyst, Liz Peek became a columnist and political analyst. Aside from The Fiscal Times, she writes for FoxNews.com, The New York Sun and Women on the Web.