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September 12, 2006

Let the Political Paranoia Resume

Drudge's big headline this afternoon is that gas is down to $2.05/gallon in Iowa. Did I not catch the news story proclaiming that the federal government had moved in and enforced price controls?

No, I (and you) missed nothing of the sort. Instead, as the Captain notes, market forces (remember those things?) are at work.

A number of factors play into this drop in price. First, as the article notes, the summer driving season has passed. Gas prices normally drop after Labor Day as children go back to school and family vacations make their way to the scrapbook. Also, this season has seen much lower levels of violent weather, and while we're not out of hurricane season yet, the chances of a really damaging storm in the Gulf of Mexico gets less likely with each passing day. Traders buy oil on futures, which means their speculation now extends past the hurricane window -- and since they had built bad weather into previous pricing, it makes sense that we would see a sharp drop now.

It seems that, just as Al-Qaeda has, the market, the weather, and American families have conspired to give the Democrats one less campaign issue. In the same way as leftist paranoids looked with suspicion on the release of terrorist videos, prepare for more hand-wringing over the "curious timing" of this news.

Yes, the market has been allowed to work and prices are now coming down. Understand, however, that I loved high gas prices. My wallet didn't all that much, but I can telecommute 3 or 4 days a week, so it didn't complain too loudly. But there were so many upsides to high prices, most of which liberals purport to love. There was the encouragement to conserve or telecommute or car pool. The higher prices increased the demand and the funding for research into alternative energy sources. They helped pay for college tuition (people in the middle class work for oil companies, too, y'know). There was so much good that came from them, yet liberals wailed and whined about it. Truth is, they'd rather the prices go up due to a tax increase so the government gets the money rather than R&D departments of the evil "Big Oil". Then they could siphon it off, pad their wallets, and be magnanimous with the scraps as grants to R&D departments of the evil "Big Oil".

By the way, will all the Democrats who wanted to blame Bush for the high gas prices now turn around and credit him for lowering them? Hold not thy breath.

Posted by Doug at September 12, 2006 01:47 PM

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Absolutely. I expect any day now to hear Democrats complaining that Bush made the gas prices go down in order to benefit Republicans in the coming election.

Posted by: Sherry Early at September 12, 2006 02:49 PM

Posted by: Doug Payton at September 12, 2006 03:09 PM

The government gets a massive infusion of cash as oil prices go up, anyway, as oil company profits (and employee salaries) get taxed.

I'm with you. From a conservation perspective, the high prices are great. And, fuel costs as a percentage of the average American's take-home pay are still lower than they've been throughout much of the history of the automobile.

Posted by: TGWShark at September 12, 2006 06:50 PM

I must admit that I agree on the gas prices. As much as I personally like low energy costs (being a supply sider and all), I was looking for some very salutary effects of higher costs as Americans became more efficient with use of resources. I suspect, though, that energy prices will go up soon enough. After all, however much of that black gold there is in the ground, it will eventually run out some day.

Posted by: Mark Sides at September 13, 2006 11:04 PM

Gas prices should be high. It's the only way to get people to stop being dependent on it. Nothing will encourage public transportation like a $2 per gallon gas tax.

Posted by: Kevin at September 14, 2006 11:17 AM

I'm gonna have to disagree with that, Kevin. Artificially inflating prices solely to make people do what you want (i.e. government setting the price instead of the market) is just communism. Give the government this inch, and the mile it takes may include a lot more than what you may be willing to let them meddle with.

Posted by: Doug Payton at September 14, 2006 02:35 PM