Thomas Sowell

He is also for "alternative fuels," without the slightest thought about the prices of those fuels or the implications of those prices. All this is the old liberal agenda from years past, old wine in new bottles, a new face with old ideas that have been tried and failed repeatedly over the past generation.

Senator Obama is not unique among politicians who want to control prices, as if that is controlling the underlying reality behind the prices.

There is much current political interest in so-called "predatory lending" -- the charging of high interest rates for loans to poor people or to people with low credit ratings.

Nothing will be easier politically than passing laws to limit interest rates or make it harder for lenders to recover their money -- and nothing will cause credit to dry up faster to low-income people, forcing some of them to have to turn to illegal loan sharks, who have their own methods of collecting.

The underlying reality that politicians do not want to face is that here, too, prices convey a reality that is not subject to political control. That reality is that it is far riskier to lend to some people than to others.

That is why the price of a loan -- the interest rate -- is far higher to some people than to others. Far from making extra profits on riskier loans, many lenders have lost millions of dollars on such loans and some have gone bankrupt.

But politics is not about facts. It is about what politicians can get people to believe.

This is part three of a three part series. To read "Priceless Politics" click here, for "Priceless Politics: Part II" click here.


Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

Creators Syndicate