May 6, 2016—Prices, Liberty Report’s editor Chris Rossini explains during Ron Paul’s latest Liberty Report video, are the lifeblood of a market economy. And because only prices are able to transmit information to everyone making decisions as to how they should allocate resources, unaltered prices are how we learn accurate and important information on the supply and demand of any product or service available.
Once governments intervene, however, prices get distorted. And that’s when we find ourselves unaware of how to better prepare ourselves. As a result, people waste their resources and find it hard to save.
As the economy collapses and consumers are unable to make ends meet, the all encompassing government steps in once again, passing new regulations and distorting prices even further.
Will they ever learn?
During Ron Paul’s latest Myth Busters segment, the former congressman talked to Rossini about prices and how to restore sanity to our economy.
Ron Paul started off by explaining why the pricing structure is important by talking about his life experience as an American living under price and wage controls during World War II and the Richard Nixon era:
“Well, [it all began when] they accepted this myth that the government is responsible for [providing] health care for us and this has come about because medical care is very important. But their logic is absolutely the opposite of what it should be.
The more scarce the product is, the more you need a pricing structure. And I remember wages and prices controls during World War II, [but that’s when] you really want the market because there’s such a scarcity, but no, they put [prices under] control.
I [also] remember dramatic changes occurring in 1971 when Nixon put wage and price controls on. There were problems with the economy and prices were going up and he wanted to control inflation but didn’t want to talk about monetary policy so he put wage and price controls on. It wasn’t a week or two or three, shortages occurred the very next day! Then all of a sudden prices were ‘fixed’ and that meant you had to purchase certain things at a fixed price and therefore shortages came up and then the black market arose rather quickly, so you’re absolutely right, the pricing structure is so important.”
When discussing price controls on health care, he explained:
“But we’ve given up on that rather early on medical care because medical care is so important [and] that means that we should be very, very interested in the marketplace but what has the government done and what has the medical profession done? They moved in the direction of more controls and more monopolies over it. You know, licensing is a form of monopoly. And the doctors were participating in it, hospitals were participating. And the bleeding hearts were participating, ‘we’ll give you free health care!’ It continues! The worse it gets, the more they promise free stuff.
Now, alternative care is very difficult to have, there’s prohibitions against it, and then, once the government gets involved, they start protecting certain groups like the drug companies. Republicans are responsible for the prescription drug program, and look at the cost of drugs! If you have to pay for the drugs yourself, they are sky-high! There’s no marketplace! And [that] has to do with licensing of drugs. Even generic drugs, importers can get licenses for them and they can be the only ones, that’s why you see medications that cost $10 a pill [costing] $300 a pill and even much more when you get into the important drugs, … cancer therapy and all.
I practiced medicine for a short period of time when there was minimal controls, I left medical school in 1960 and I was involved in medicine then and one thing I observed back then, I worked in a Catholic hospital in San Antonio when I was in the military and nobody as turned away, everybody had medical care and they were either not charged or [charged very little]. So when the government came in, or third party payment came in, you divorced yourself from the patient, you don’t look the patient in the eye and say ‘this is what it’s gonna cost,’ you send the bill to third party and it’s always the maximum! … [Intervention] completely distorts the marketplace!”
Watch the full episode here for more on price controls:
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