Thursday, April 27, 2006

Oil, Oil Everywhere and Not a Drop To Drink

I should never have promised to not blog about oil, it’s everywhere and the ignorance that it generates just can’t go unanswered.

I guess there are at least some people that are cheering about high oil prices.

What none can acknowledge is that higher gas prices in the United States are a good thing. To be sure, oil at $70 a barrel causes hardships for working people and delights some of the world's worst dictators. But cheap gasoline imposes its own costs on society: greenhouse gas emissions, air pollution and its attendant health risks, traffic congestion, and accidents. The ideal way to cope with these externalities would be with higher gas taxes or a carbon tax. But these are politically impossible ideas at the moment—Democrats lost control of Congress in part because they passed a 4-cent-per-gallon tax increase in 1993. The next best solution is the one that has arrived on its own: a high market price for oil, which spurs conservation and substitution.


So I guess at least some environmentalists are dedicated to their cause. I wish there were more of them to offset some of the big government proposals to punish success.
Meanwhile Senators are going to give every American $100 to offset gas prices. My first question is what are they going to cut for this payout? My second question is why are people that don’t own cars getting this payoff payout?

The answer is simply – it’s a free campaign ad. I hope someone in Congress calls attention to this cheap political trick. If Congress truly wanted to do something about gas prices in the short term they would eliminate the federal taxes on gasoline. Not that such a ploy would work, but at least they could pretend that their actions had some effect. Professor Bainbridge wants to know where the party of small government is – the answer is simple; it hasn't existed for years. There are no Democrats or Republicans anymore, just populists that will try every trick in the book to retain power at the expense of anything approaching a governing philosophy.

HatTip: Hit and Run

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