Thomas Sowell has another typically great column in this morning’s Washington Times about the political posturing that has accompanied the rise in oil and gasoline prices over the past year.
After hurricane Katrina destroyed a lot of oil processing capacity around the Gulf of Mexico, there was — surprise — less oil being processed. With less oil supplied — surprise again — gasoline prices rose.
However much economists rely on supply and demand to explain price movements, politicians need villains, so the pols can play hero. Big Oil is a favorite villain and has been for decades.
There is nothing like the political melodrama of summoning oil company executives to televised hearings before a congressional committee, where politicians can wax indignant at Big Oil’s profits.
It so happens Big Government takes more money in taxes out of a gallon of gas than Big Oil takes out in profits. But apparently somehow taxes don’t raise prices. They certainly don’t raise indignation from the politicians who voted for those taxes.
Of course they didn’t, because it wouldn’t make sense to actually blame politicians for something that is entirely they’re fault. And its not just taxes that contribute to higher oil and gas prices. Environmental and other regulations have created an enivronment where no new refineries have been built in the United States in more than 20 years. Those same regulations make it impossible to drill for oil in areas where we know it exists. Is it any surprising that the market is as screwed up as it is when this is the regulatory field they have to play in ?
Despite all of this, though, Sowell points out that the market did work despite all the hyperventilating from the political class:
After the oil processing facilities were repaired and put back in operation — yet another surprise — prices came back down. Supply and demand have been doing this for centuries but apparently the word has not yet reached some politicians.
Apparently not. Or, they just choose to ignore it.
Sowell goes on to discuss the effect that these environmental regulations have had on energy policies and asks what the solution might be:
The politically correct answer is that we must have “alternative energy sources” and “conservation.” At what cost — in money, in jobs, in constraints on people’s lives — is too crass a question for delicate souls dead-set against producing more oil.
The answer, of course, to the people who advocate this belief is that there is no cost too high — especially if you can get someone else to pay for it.
And even their own hypocrisy isn’t apparent to them:
These souls are apparently not so delicate, however, that they are bothered by coal miners killed producing one of those “alternative energy sources” that sound so nice when you don’t count the costs.
Many of the same delicate sensitivities have kept nuclear power plants or hydroelectric dams from being built in the United States for decades. Some in liberal political or media circles talk ominously about the Three Mile Island nuclear power plant “disaster” in which no one was killed, as compared to coal mines, in which lives continue to be lost, year after year.
But, of course, the elitists in New York and California don’t really pay attention to West Virginia anyway, do they ?
Previous Posts:
The Market At Work
Arlen Specter To Interrogate Oil Executives
ExxonMobil’s Record Profits: Looking At The Numbers
ExxonMobil’s Record Profits: Something To Celebrate
So Much For Evil Oil Companies
The Senate Oil Patch
Republican Socialism Part II
Republican Socialism
Abandoning Principles
Economics In One Lesson
This is The Sound of Atlas Shrugging
The Non-Crisis And The Rule Of Bigness
Oh Well It Was Good While It Lasted
Politics And Gas Prices
Putting Things In Perspective
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