Post image for A Drive down Memory Lane on Memorial Day

Driving is an American pastime on Memorial Day weekend. Indeed, today’s holiday is THE road trip occasion in American culture. This acute association explains why American politicians choose the lead up to Memorial Day to trot out plans to address high gasoline prices.

This year, it was dueling votes in the Senate. Roughly speaking, the Republicans tried to increase the supply of oil by ending the Obama administration’s de facto moratorium on domestic drilling, wrought by bureaucratic foot-dragging. The legislation already had been passed by the Republican-controlled House. On the other hand, the Democrats wanted to raise taxes on “Big Oil” companies, by eliminating tax breaks enjoyed by many—and in some cases, all—businesses. Neither party wooed enough votes to survive a filibuster, so they both failed. Of the two, the Republicans’ ideas were better this time, but there have been instances in the past when both parties were equally bad in the run up to Memorial Day weekend.

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Post image for Why Democrats Blame “Speculators” and “Subsidies” for High Gas Prices

With gas prices hovering near $4/gallon, Democrats are trotting out fanciful “solutions” to temper the price of oil.

On Saturday, President rolled out a three-part plan to relieve Americans’ pain at the pump. The third part was the elimination of Big Oil “subsidies” (in fact, they are tax breaks, not subsidies). This doesn’t make any sense. The point of the tax breaks to Big Oil is to decrease the cost of production. That is, they make oil cheaper to extract. Removing these “subsidies” will in no way decrease the price of gas.

Meanwhile, Senate Democrats are blaming evil “speculators” for bidding up the price of oil. This is utter malarkey. The price of oil is dictated by a global market.  Ill-defined “speculators” are a straw man.

Removing Big Oil’s “subsidies” and prosecuting “speculators” are empty political gimmicks of the sort that the 2008 version of Obama campaigned against. (So much for “Change,” right?) I suspect that the President and Senate Democrats are relying on these bogus non-solutions because, otherwise, they’d have to acknowledge that the price of oil is a function of supply and demand. And if they concede that the market, and not “subsidies” or “speculators,” is to blame for high oil prices, then they’d also have to acknowledge that increasing supply would decrease the price. That is, they’d have to admit that “drill, baby, drill” works. Of course, they don’t want to do that, because doing so would upset their environmentalist base.

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