In today’s Wall Street Journal, Jonathon Lesser puts it plainly, “to lower gasoline prices permanently, you can reduce demand, increase supply, or do both.”
Sounds pretty logical right? The problem is that Congressional Democrats don’t seem to understand this fact. They refuse to increase domestic supply by drilling in ANWR or off shore and their only idea thus far to combat the high price we pay at the pump is a “windfall” profit tax on oil companies.
Sure, oil companies have a lower approval rating than Congress itself so they’re a pretty easy target. There are just a few glaring issues with this rationale. First, any American with a retirement plan or investments in a mutual fund is more than likely a stock holder in one of these companies. Second, these profits are what funds the exploration and research that could prove to be a market-based way out of this crisis. Finally, as Lesser points out, “unfortunately, by reducing supplies, a windfall profits tax will only lead to even higher prices.”
With Speaker Pelosi and congressional Democrats blocking all the other alternatives, what’s Lesser’s proposal? Rationing:
“The next obvious step for our solons is to cap demand by rationing gasoline, and then gradually reduce the quantity of ration coupons.
“‘Trading’ in coupons would be encouraged to ensure gasoline is allocated to uses of only the highest value. So Congress could reserve quantities of ration coupons for key lobbyists and their clients. Environmentalists could buy up coupons and “retire” them, lowering gasoline sales even more. Refineries could continue to produce gasoline, but as consumer demand would be sharply limited (and declining), oil companies would be forced to reduce the prices they charge. No more windfall profits! And lower carbon emissions!
“For legislators and environmentalists – if not average citizens – this plan has other virtues: As ration coupons are reduced, consumers would increasingly clamor for more electric cars, cars that ran on French-fry oil, and ‘flex-fuel’ cars that burn everything from gasoline to garbage. Eventually, gasoline could just be banned, reducing prices to zero and eliminating all ill-gotten profits.
“And if Congress then had to tackle French-fry oil speculators and impose a windfall profits tax on Big Spud, well why not?”
Sounds bizarre right? What Lesser does a good job of pointing out, however satirically, is that if Democrats are blocking the most logically solutions to our problem we’re just going to have to start thinking outside the box.
To weigh in with your thoughts on how to lower gas prices, take Jack’s energy survey by clicking here.
To read Lesser’s full article, click here.
