Economic growth is inextricably tied to government policy. This policy may take a variety of forms. Richard Wagner, in the Dunn Daily Record,
noted that politicians, while on the one hand condemn incentives as a
“necessary evil”, never fail to tout the payouts that produce “all the
faux jobs they’ve landed for their state.” Or, in the instance of
“excessive oil profits,” policy may move to cap revenues in order to
help consumers complaining about high prices. Roy Cordato, also featured in the Dunn Daily Record,
reveals that such a policy reflects a “poor understanding of prices and
their relationship to profits.” Profits, if they occur, are only
a result of the market reaching an equilibrium price that is above the
cost paid by the producer. State Attorney General Roy Cooper, when he recently filed a lawsuit against a gasoline distributor for alleged price fixing, showed his lack of understanding of the issue. As Daren Bakst notes in his recent Spotlight, Government Trade Restraints: How N.C. Hurts Consumers by Restricting Competition,
Cooper’s move to penalize price fixing is not only misguided but
ironic. Through state-imposed trade restraints such as
certificates of need, caps on charter schools, occupational licensing
and taxicab regulation, N.C. sanctions unfair trade practices that
eventually harm consumers. And this harm is even more far
reaching than the alleged price-fixing on the price of gas.
Trade Restrictions and Economic Growth