Why are gas prices so high?
The simple answer, the government tried to help.
Never has a crisis been so easily traceable to a single act, the Energy Bill passed last summer and signed into law by President George W. Bush. The recent dramatic spot shortages in Texas — yes, oil rich Texas — were the direct result of a provision in the bill forcing drivers to use 7.5 billion gallons of ethanol (usually from corn) by 2012 together with its refusal to protect the rival oxygenate MTBE that Congress and its environmental allies had previously forced on the public the last time they “helped,” now claiming MTBE is a pollutant!
Thomas Jefferson once said, “Were we directed from Washington when to sow and when to reap, we should soon want bread.” The economy runs much smoother when the government gets out of the way.
The switch to ethanol caused spot shortages on both coasts and in Texas. Congress has also driven up oil prices because they refuse to allow drilling in ANWR. Congress could help lower prices and stop spot shortages by outlawing “boutique” regional gas blends. If ever there was a reason to invoke the interstate commerce clause of the Constitution, setting a national standard for gasoline blends would be it.
This post has 18 comments
May 11th, 2006
Jason, how DARE you blame the government for our ills???
Everyone knows that the government only has our best interests in mind. Why, without the government, we would surely…. PROSPER!!
(ok, you can slap me now!)
May 11th, 2006
This sheer nonsense, “The economy runs much smoother when the government gets out of the way” typically spouted by the historical alliterate libertarian. It’s particularly when its spouted on the government developed internet and using computers, both of which were invented for use by the government and paid for by government funding.
See, the United States already tried the libertarian system, which totally failed and was rejected. Had you paid attention in 7th or 11th grade American history you would know this. I have 11th grade history textbook that will teach you this if you are interested.
Other examples of things that government money provided that would have never occurred without government funding are railroads, the interstate, many of your drugs, everything developed from the space program, and so forth.
Not saying that government is always the answer, but often is a superior one given its lack of profit motivation, superior accountability, and controlled salaries.
May 11th, 2006
“I have 11th grade history textbook that will teach you this if you are interested.”
At least we now know what level you are operating on. Thanks HG!
May 11th, 2006
You’ll have to tell me more about the failed libertarian system. I can’t think of any period under our current Constitution when we had a libertarian system.
Railroads? I’d like you to try to prove to me that Amtrak is a huge government success story. It’s a sinkhole that the government pours more money down every year.
NASA? That’s a colossal waste of money. How much time did it take SpaceShipOne to capture the X Prize? All the money we’ve wasted on NASA hasn’t even come close to duplicating what Brian Binnie and his private corporation accomplished.
The internet was originally developed by mostly private Universities with private grants. (Not by Al Gore.) Right now the government is thinking about new Internet regulations that will ruin the free and open exchange of ideas that happens now.
Profit is the best motivator there is. Don’t even get me started on government accountability. If there was any kind of government accountability for the way they spend taxpayers money we wouldn’t have half the government buildings in WV named after the King of Pork, Robert Byrd.
May 11th, 2006
Amtrak is one minor part of the history of American railroads. Without them, westward movement, settlement, and development would have been far different. While Amtrak is probably a failure, the original railroads, all dependent on government support because of big business’s risk aversion. Again, you’re displaying the historical aliteracy common among the libertarian political persuasion.
It took along time to capture the x-prize, an endeavor made easier by the fact government had already paved the way decades earlier. As for your statement “All the money we’ve wasted on NASA hasn’t even come close to duplicating what Brian Binnie and his private corporation accomplished.” I am not sure whether to cry or hit you with a elementary school history book. I mean, Christ the stupidity just oozes from that statement. I mean NASA landed on the moon, did all those space probes, is responsible for 30,000 different spinoffs, including scratch resistant coating on most glasses
But then again, firing off a rocket twice is surely equal to that.
The internet was invented for the US military by universities receiving DARPA money. And big business are far worse than the government in supressing freedom online with DRM, the DMCA, and other bogus laws. And they’re getting away with it because they are completely unaccountable. You can’t vote them out of office, FOIA for their records, or in many cases prosecute them because arent real people.
Nor does the constitution apply to them. Which is why Wal-Mart can force all their employees to say hail Satan or Happy holidays without fear.
May 11th, 2006
I prefer to look at the government track record in the 20th and 21st centuries. Going back to the 1800’s to show government railroads were a success doesn’t impress me.
Did NASA really land on the moon? That was a hoax!
May 11th, 2006
To paraphrase Jefferson:
May 11th, 2006
Interesting anonymous, but problem is, we’re facing that problem with capitalists in control, while “socialized” oil systems like Venezuela aren’t havin g that problem.
May 11th, 2006
Capitalists aren’t in control of the U.S. gas supply. We have a socialized system of oil and gas production here too. The Government tells the oil companies where they’re allowed to drill, how they have to blend their fuel and then profits (through taxes) from a product they contributed absolutely nothing to make. That’s socialism.
May 11th, 2006
Venezuela doesn’t have a problem because their government lets them drill for oil in their own country. The United States has to import almost all of their oil.
May 11th, 2006
Uhh Jason fairly minor and flexible regulations on where one can drill, environmental regulations and taxes do not equal a “socialized system.” I know the right wing pundits on TV tell you that, buts its not true.
See, if the US had a socialized system, then all the profits, not just a tiny slice would go to the government. Why? because the entire system would be nationalized. In reality, the profit goes to private capitalist firms like Exxon, Hess, Lukeoil (sp?) and the rest. Production is also owned by private firms. Distrubution is done by private capitalist firms. And get this, so are retail sales of oil.
I’ll put it into a nice glib sound bite for you to understand
Socialized System = State Control
US Oil System = Private control, with limited state regulation
US Oil System =/ Socialized
=/ = not equal. I can’t do the math symbol.
As for Venezuela, they regulate their oil industry just like do in the US. They dont allow you to randomly set up derricks in that country, like in the US.
May 11th, 2006
It’s not just a minor regulation when the government says you can’t drill anywhere in ANWR. That’s a major impedement to creating a domestic oil supply. The area they would need to actually “spoil” to start drilling in ANWR amounts to less than 1% of the total land mass. (And it’s not anywhere those cute polar bears and seals.)
May 11th, 2006
Yeah, but drilling in ANWAR will not drive the price of gas. Why? because it will then go on the global market, like all the other supplies of gas in the United States, which is controlled by OPEC and capitalist oil firms various oligarchies. This is why a barrell of oil imported from Mexico and Canada cost the US the same as a barrell of oil imported by Iran from the Caucaus area.
May 13th, 2006
High gas prices are good, because cheap gas has prompted people to make incredibly stupid decisions, like buying gas guzzling cars, and failing to demand that their leaders enact public policy that reduces dependency on foreign energy sources. The cheap gas we’ve enjoyed for many years has led complacent Americans to ignore the effects of global warming. Cheap gas has let us forget that people are being killed in a war that most American ignorantly supported. Our fear-mongering president led the U.S. into a totally unnecessary and counter-productive war, to keep gas cheap so that GM could continue to sell anti-social Hummer trucks to moronic Americans.
Every dumbass who made the fool-ass decision to buy a car for normal use that gets less than 30 miles a gallon - to hell with them, they’re ruining my country.
Let efficiency and conservation be the new national obsession.
May 15th, 2006
I have no idea who the person posting as George Washington is, but he’s a complete idiot. High gas prices are not good. Ever think high gas prices will cause the prices of groceries to go up? Most of the groceries in your store are brought there by truck. If it costs more to get the groceries to the store, then the grocer is going to haved to charge you more.
If the war in Iraq was all about helping out his oil buddies, why has the price of gas gone up? It does the oil companies no good to make record profits now if people start using less gas in the future. When people actually start using less gas, then the oil companies profits will plunge. How does that help them?
May 15th, 2006
Re: Drilling in ANWR. Where’s the law that says the oil we get from ANWR has to be sold on the open world market. I know of no reason why we can’t just keep it all to ourselves.
May 15th, 2006
There is no law Jason, but to keep all of ANWR’s oil to ourselves would require nationalizing it. This would be socialism and traditionally this has provoked hostile responses from the US, like when Iran did it in 1953.
As for the higher prices, we could always pressure the corporate elite to accept lower salaries and perks. We could also buy less stuff and find other ways to fill our meaningless lives other than shopping.
May 18th, 2006
You know what is really stupid…when you live in a place where there is 30 or more oil companies and drilling rigs in that one city, and there is an Oil Upgrader 5 miles out of town where they MAKE the gas that the gas has to be over $1.20 a litre…that is bull
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