We all have heard of the closed fist methods of Hugo Chavez of Venezuela, the socialist president with a thirst for power and oil.

Chavez provides a lesson in history with regard to government intervention and paints a new picture of current health care plan purposed by President Obama. In 1998 Chavez wanted to win the hearts of the majority in his country during the 1998 election. He imposed price controls on hundreds of goods to make food and other essentials more affordable for low-income people. He wanted to make sure those that were struggling could eat. This was a very admirable goal, but with intervention came sever consequences.

An Economic Lesson: The Price of a Product reflects the costs of the transactions and processes required to make it.

The price controls may have given Hugo Chavez a quick political stimulus response but the lasting effects were devastating. The result of the price controls threw the markets for the food products out of whack (and his nation’s economy). Today the only place to obtain food in Venezuela is on the black market and you know what the prices are like on the black market.

As we can observe from this experience, governments have good intentions to provide a good or service to the entire public by stepping into the market to impose their new ideas with the intent of correcting the market. As we have learned with Venezuela, when the government steps in to correct a ‘market failure’, they end up creating a worse market failure, complete chaos.

What can we learn from Venezuela as it relates to the U.S. health care bill? Let the market run its course- government intervention rarely solves economic problems. The solutions to our problems come by innovation in the market, not by trying to appease all with manipulation.

I definitely don’t want to be getting my healthcare off the black market.