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Sunday, May 04, 2008

The Gas Tax Holiday

It shouldn't take an Economics degree to understand that McCain and Clinton's gas tax holiday proposal is just pandering that will do very little to help consumers while giving money to the oil companies. Yes, those same oil companies that are making record profits. But that is exactly how our media treats this issue. The media is supposed to be a check on governmental powers and inform the public. In this instance they do neither. All economists who are not getting paid by Clinton or McCain have come out strong against this proposal. It really isn't even a matter of opinion anymore. Yet our media refuses to inform the public. Either they are truly dumb or they agree with the pandering so our corporate overlord can receive another handout. I vote for a little from column A and a little from column B.

See, the issue with gas prices is supply of oil. From all indications, oil production is being maximized, meaning increases to the oil supply would be costly. It would require investment in new oil refineries which would not even influence supply for years. In situations like this, the price of oil is set almost exclusively by demand. The only way to lower price is to decrease the demand, ie, decrease our dependence on oil. But that's not an easy answer like telling everyone you will cut taxes. Imagine the outrage though when the tax is removed and price does not decrease and oil companies continue to make record profits?

To make matters worse, the gas tax is used to fund structural projects like maintaining roads and bridges. So by giving this money to the oil companies, drivers will be hurt by the burden of worse driving conditions and potentially unsafe conditions. It really is a lose-lose for everyone but the oil companies. Yet the media does not feel the need to inform us, it's supposed audience. Truly sickening. But I do have to give Obama some praise for not pandering and living in the reality based community. That is called leadership. And is just another reason why he'll make a terrific president.

Tags:

media gas tax holiday liberal conservative Republican Democrat economics oil profits

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