A modest proposal to ease our gas pains
By Michael M. Bates (04/25/06)
The war on terror. Illegal immigration. Iraq. Government leaks. Dick Cheney's shooting accident. All pale in comparison to the crisis du jour: the cost of gasoline.
Americans are mightily aggravated by prices at the pump. The exasperation could have ramifications on this year’s elections. Many politicians will milk it for everything it’s worth.
Right now at least, this doesn’t bode well for President Bush and his party. A Washington Post/ABC News poll taken earlier this month had 70 percent of those questioned saying that gas price increases have hurt either them or someone in their household.
More ominously for the Republicans, almost three-quarters of respondents disapprove of the way the President is handling the situation. Pointing out that his job doesn’t include responsibility for keeping gas prices low would be an exercise in futility in most instances.
So would mentioning that, if gasoline had kept pace with wages since 1920, it’d be about $10 a gallon. Or that gas taxes average more than 60 cents per gallon. Or that, partially due to environmental concerns, no refineries have been built in the United States in thirty years.
Moreover, gasoline prices increase every spring because of government mandates to reformulate the fuel so that emissions are reduced. Emerging economies around the world are now competing with the U.S. for petroleum and that’s stimulated big price jumps. It’s called the law of supply and demand.
Then there is the matter of drilling a small fraction of the Arctic National Wildlife Refuge (ANWR). The U.S. Geological Survey has estimated significant amounts of recoverable oil are there, but when Congress authorized opening it up for exploration, Clinton vetoed the move.
Proving that a Republican Congress isn’t the same thing as a conservative Congress, there’s been no progress on the issue during the Bush years. ANWR might still offer some hope, but it would be years before the full benefit of exploration would be realized.
And many Americans are demanding something be done immediately. Public anger is targeted at the usual whipping boy, oil companies. Liberal politicians - and some not so liberal – are ready to pile on.
Calls for taxing those supposed obscene oil profits may have some populist appeal, but don’t withstand scrutiny. Taxes are just another cost of doing business. We all intuitively understand that consumers ultimately pay all the costs of doing business.
There’s also sentiment for capping the price on gas. Price controls have traditionally been very successful, but only if you define success as creating shortages in the commodity being regulated.
Trying to curb inflation, Richard Nixon imposed wage-price controls. This was ironic in that Nixon originally didn’t want that authority. Liberal Democrats gave it to him over his protestations in 1970.
The controls were disastrous and counterproductive. Old timers such as yours truly recall shortages of meat in grocery stores when price controls led to American cattle being exported to Canada.
There were long lines at gas stations. Limits were placed on how much fuel you could purchase. In some instances, motorists would wait for hours. Tempers flared and fights broke out.
Seeing what a failure they were, Nixon had no alternative but to ease the controls. Some oil price controls remained until Ronald Reagan, in one of his first acts in office, set them aside. Self-appointed consumer advocate Ralph Nader called the action the greatest crime in history, but long lines at service stations ended.
So what could be done at this point to give us a little relief from those gas pains? One modest suggestion isn’t original: It’s to sharply cut the taxes we pay on each gallon of gas. It wouldn’t take long years to implement or require the cooperation of foreign countries. The impact would be felt almost immediately.
At the federal level, Congress would have less money to devote to the pork barrel projects it so loves. State legislatures would have to at long last get serious about spending within their means.
Motorists deserve and need that money more than the politicians do.
This appears in the April 27, 2006 Oak Lawn Reporter.
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