Governmental Monopolies R US

Have we all noticed that when the government seizes control of something, hyper-regulates, or pays for it that the cost of it generally increases? I don’t know what economic law that is but it bears out.

Whether you agree with this popular idea or not, it looks like states are chomping at the bit for legalization of recreational marijuana. It doesn’t matter if you agree or not, they appear set to do it. Many states are in the game, the race is on.

A big part of the sales pitch is the tax revenue states are going to get. Umm-hmm, good to lawmakers. People get high and they raise their revenues. Coffers go up and people are happy. And that is the idea anyway. What’s not to like about that?

Well, what happens in the interim is the price goes up. This is no problem for government. They don’t care. In fact, they just make more money. That’s a win for all those proponents of big government. Extra costs are passed down to consumers.

Now I know a a cancer patient who has one of those handy mari-j-uana cards. That card only allows him to purchase it at official distributors. But the price is so prohibitive in those places that this card-carrying customer seeks out the street market supply anyway, which, oddly enough, is below the government vendors price. Get it?

But if government is going to drive up the cost?

So all street dealers have to do is come in under that official price and the black market is rolling. (not much of a market war against gubmint) Of course, then no one is getting any tax revenues. But like we saw with toilet paper, there is always a market if there is demand, and always those looking to cash in on it.

The first deduction to make is that black market is not going away, if that was even the idea of it. The second is that government does not compete well, if at all. This is not only on marijuana but it is a good example. Plug in that formula elsewhere, you probably get the same results. Government = rising cost.

Onward to college. In that case there is no competition so government’s monopoly is safe. Yes, there are private colleges but student loans are the same. Unless one is a cash-paying customer, which few can afford. But then you are still paying the cost in a government-influenced market. Government only adds cost; it never seems to decrease it.

Then government comes up with the popular idea to forgive (pay off) student debts, to some degree. What do you think is going to happen to college costs? Of course. The push is for 50,000 in student debt relief. So the unacceptable bottom end becomes 10,000.

Want to bet college cost will go up by almost that amount, at least? But when you get millions of people rallying and demanding it, what is going to happen? Class dismissed.

Right Ring | Bullright | © 2021

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