Saturday, November 15, 2008

Release the Strategic Petroleum Reserve?

Last July, on BwD, I predicted a large drop in the prices of crude oil and gasoline within three years. My caveat, of course was that the federal government was perfectly capable of screwing this up. KT has a great post, with pretty pictures, showing just how cheap gasoline is today. At the time, there was a lot of hot air about a temporary suspension of gasoline taxes, releasing the strategic petroleum reserve and windfall oil profits tax, because, by gum, SOMETHING had to be done! Fortunately, nobody got around to do anything and look at the result. (I filled up today for about $2.29/gallon and I saw $2.01/gallon gas in Memphis last week.)

This scenario is perfectly illustrative of the simultaneous difficulty and importance of making the case for less government. In the midst of a hotly contested election, the temptation of politicians to pander seems almost irresistible. But if the public has the awareness of the futility of repealing laws of economics, then such efforts would be laughed off the table.

This is like the failed effort to make pi = 3.2 in the Indiana legislature in the 1890's. Today, no one would think of introducing such legislation for fear of ridicule. One would think that similarly stupid schemes to manipulate the price of oil would be ridiculed as well.

1 comment:

  1. But ... but ... but I thought it was the speculators that caused the price of oil to go up! We needed to DO something! What happened?


    Thanks for the link!