The Right State

I like Thomas Sowell.  He is straight to point and does not seem to have time to put up with nonsense.  He is one of the few who seem to understand the issue of the high gas prices.  Debra Saunders on the other hand, writing for the San Francisco Chronicle, bemoans the fact that oil companies are making too much money.

Bush picked up congressional leaders’ call for an FTC investigation into gouging. (Like that will help.) He also called on Congress to revoke tax breaks for Big Oil to the tune of $2 billion over 10 years — when Americans know that if Bush were serious, he would have called oil company executives into the White House and told them to cut prices — or lose the tax breaks tomorrow.

But Sowell goes straight to the point about why gas prices are so high.

Is it rocket science that, when oil prices hit new highs, gasoline prices also hit new highs? Do you think the price of wheat could double without the price of bread going up? Would we have politicians running around spouting off about “gouging” by Big Wheat?

Is it rocket science that, when huge countries like India and China have rapidly growing economies, their demand for oil goes up by leaps and bounds? Is it rocket science that, when demand shoots up but supply doesn’t go up as much, prices rise?

It is all politics.  People are complaining because gas prices are so high.  It is one of the few things people buy all by itself.  The price of gas can be seen as people fill their cars.  If consumers had to go to one store and buy sugar and another to buy bread, then they would be complaining about those prices.  When consumers complain, politicians listen, especially when their future employment might hinge on how they respond to the growing clamor to ‘do something.’

Something should have already been done.  Drilling in ANWR when the issue was first brought up would have gone a long way towards shoring up some of our oil supplies.  These same people do not want any more refineries built.  They do not want any more drilling done in the US.  They do want more renewable energy sources built like the wind turbines, but they do not want them my backyard (i.e. Senator Kennedy D-MA).

And now the Republicans have decided to join the chorus of angry (fake) Democrats who are demanding an investigation into price gouging by the oil companies.  As it is now, the oil companies are making approximately nine cents a gallon on gas sold in the US.  Where is the gouging there?

Conversely, the federal and state governments are making between thirty-five and sixty cents per gallon.  I think you could call that price gouging.  The gas tax is what needs to be reduced which would lower prices at the pump.  Right now the President is being blamed for something he can not control.  He is even blamed for the tax breaks the oil companies receive.  Even though the President signed the bill, it was a bipartisan Congress who gave the tax breaks.

Tags: Politics //