Fight inflation -- free America's market

One of the most important missions of our government should be to prevent inflation. Instead, our government promotes inflation by passing legislation that interferes with a free market and by failure to aggressively prosecute those who violate price-fixing regulations.

To understand the cause of inflation one needs to understand the basic elements of the American enterprise system, which is vitally linked to a free market. This system is super-sensitive to any interference in the marketplace. As interference in the marketplace increases, our productivity decreases.

A decrease in productivity reflects a decrease in efficiency and, vice versa, an increase in productivity means an increase in efficiency. An increase in the money supply, combined with a decrease in productivity, is inflationary and is caused by interference in the marketplace. With less interference in the marketplace, the resultant increase in productivity could support an increase in the money supply without being inflationary.

As an example of legislated inflation, the steel industry, through persistent lobbying, has been able to involve the government in fixing steel prices. The industry, instead of competing among its members for higher profits through increased efficiency in operations, chose to regulate production and prices at a level that would assure a desired profit without being involved in the many problems and never-ending struggle to be more efficient.

Being competitive is not easy, but there is no alternative in a truly free enterprise system. With a lobby-oriented government, price fixing in becoming less and less difficult. Foreign nations, after borrowing American steel technology and through improved efficiency in production, have been able to ship their products thousands of miles, undercut the American market, and still make a profit. The inflationary spiral in the steel industry will continue if the United States government responds favorably to the industry's request for protection against the importation of foreign steel.

It one is not convinced that price fixing (interference in the marketplace) is a major cause of inflation, you have only to look at the oil industry for the clincher. Every time the members of OPEC (Organization of Petroleum Exporting Countries) raise the price of crude, inflation rises sharply and domestic oil profits bulge upward. The inflation rate hardly has a chance to level off before we are hit with another crude oil price increase and a subsequent sharp rise in inflation. The OPEC members and the oil industry are able to raise prices at will by controlling supply through embargo or regulated storage and refining processes.

Why do the OPEC officials grin from ear to ear every time they meet? It is not because of mutual friendship and trust of the American consumer, but because they have a more powerful friend in Washington, D.C. than we have -- the oil lobby.

The families of our nation, instead of going to the bank with savings, are taking these savings to the gasoline pump to the tune of hundreds of billions of dollars annually. Money spent cannot be saved.

Those who say that rationing and price control will not work are ignoring reality. We already have rationing and price control in the oil industry. The phenomenal success of the industry in maximizing profits by administering rationing and price control must have exceeded its fondest dreams.

Why should not the government administer this program for the benefit of the consumer rather than the oil industry? With the resultant glut of oil on the world market, the consumer would be wearing the ear-to-ear grin.

To combat inflation successfully, price controls must be placed on all goods and services that are now subjected to price fixing by industries. These controls should remain in place until the government is able to restore a relatively free market for the goods and services under control.

Time is running out. Predictably, we will have ineffectual controls and a major economic adjustment, not necessarily in that order. The economic system that made the United States the greatest nation on earth is being replaced with a corporate system. The middle-class American will disappear. The United States economy, if we are fortunate, will blend in with other second-rate nations of the Americans and Europe.