Can You Pick One Please?

I had a little media frustration the other day.

As some will recall, Congress decided to get the U.S. Federal government out of the helium business back in the late 1990s.  We got into the helium business during WWI when helium filled dirigibles were considered pivotal to our national defenses.

We stayed in the helium business after the rise of the aircraft carrier and other airborne platforms because national defense policy has a lot of inertia.  Also businesses liked having cheap helium.

During the early 1990s, most media outlets were complaining that our national strategic helium reserve was no longer required for military preparedness.  They claimed that the program was nothing more than a grand subsidy to private businesses.  There were lots of stories about places that sold helium filled balloons with the context of "why should the taxpayer subsidize this?"

A couple days ago, I heard a report on NPR about the imminent closure of the reserve.  Here we are over 15 years later and the market has yet to spool up the production capacity to meet current demand.

So businesses are running out of helium.  The story began with the ubiquitous balloon store owner talking about how she cannot get enough helium to run her business.  It moved on from there to detail how helium is used in a lot of different industrial processes.  It included a report from an electronics manufacturer in the U.S. that had opted to use other inert gasses where it could, and to turn off the helium when it was not in use for production.

The context of the story was to promote a bill currently before Congress that would extend the federal government's involvement in helium production until the free market can catch up.

The frustration isn't so much about the media pushing for the end to this program and then pushing to extend it when the logical results of that policy come to fruition.

The frustration is with a media, in this specific instance NPR, that simply has no real understanding of free market economics.  Our existing helium supply is quite large.  Even though the market price for helium is increasing, it hasn't gotten to the point where private business owners can justify the expense of building new production facilities to compete with the helium that still is in the reserve.

The price of helium will eventually increase to that point as the volume in the reserve is slowly depleted.  There will be some volatility in the price of helium as production, storage, and use reach new balance points.  There will be some short term economic pain.  But eventually, production will increase to meet demand, albeit with less storage capacity.

And if Congress acts to keep the feds in the helium business, that painful period will last for years and perhaps decades as private businesses discover that they cannot compete with a government subsidized product.

Could someone assign these folks to read a little more Thomas Sowell and a little less Paul Krugman?