It's spring. It must be time to declare all politicians idiots again.

The inevitability of spring.  Flowers bloom.  Thunderstorms roll.  I sneeze.  Gas prices rise.  And politicians think they should do something about it.

House Republican leaders on Tuesday challenged Speaker Nancy Pelosi (D-Calif.) to release a plan to lower gas prices that they say Democrats touted when they were in the minority.

Instead of rewriting past posts, I'm going to just cut and paste my post from May 17 of last year below(one of my better, if I do say so myself).  That post draws on the same ideas from a post in April/May 2006.  Noticing a pattern?  While the legislative proposals are different, the analysis is the same.  All politicians are idiots. 

On May 17, 2007 I wrote:

I'm angry.  I can't believe we're right back where we were a year ago.  Gas prices are rising and Congress is trying to do something about it.  Eighty-two Democrats and 3 Republicans in the House have proposed the Federal Price Gouging Prevention Act (H.R. 1252) otherwise known as the FPGPA, pronounced STUPID.  So let's take a look at the STUPID price gouging bill...

NOTE: My serious take on the solution is at the end of the post...so if you want to skip my sarcasm, skip to the last paragraph. 

The STUPID price gouging bill will make it a federal crime to:

...sell crude oil, gasoline, natural gas, or petroleum distillates at a price that is unconscionably excessive or indicates the seller is taking unfair advantage [of] unusual market conditions (whether real or perceived) or the circumstances of an emergency to increase prices unreasonably.

Unconscionable excessive?  Unfair advantage? Increase prices unreasonably?  Yikes.

Allow me to interpret.  The STUPID bill makes it a federal crime to:

...sell crude oil, gasoline, natural gas, or petroleum distillates at a price that makes my constituents complain because they are too lazy to drive less at higher gas prices.

There are two possibile explanations for the Democrats proposal of the STUPID bill.  1) They think the public is too stupid realize they are trying to "do something" by proposing a STUPID bill, or 2) They are idiots.  Since Env-Econ readers obviously represent a cross-section of the public, and since Env-Econ readers are smart enough to know that this bill is STUPID, I have to conclude that 1) is logically impossible and therefore, 2) must be true.  So we've now proven that Democrats are idiots.  We're halfway there. 

In looking into the STUPID price gouging bill, I came across the Republican Study Committees reports on the STUPID price gouging bill.  In it, they list a set of alternative proposals for lowering gas prices.  They are:

• Streamline the environmental hurdles to building new oil refineries.
• Make it easier for small refineries to increase capacity.
• Allow more offshore (e.g. Outer Continental Shelf) and inland (e.g. Arctic National Wildlife Refuge) oil drilling.

In other words...screw the environment and roll back new source review.

• Temporarily suspend the gas tax.

...because driving more is always a good short-term solution.

• Temporarily suspend the gas tax and temporarily suspend spending on all transportation earmarks in the most recent surface transportation reauthorization bill.

...because driving more on crappy roads is an even better short term solution.

• Permanently reduce the gas tax.

...because driving more on crappy roads is an even better LONG term solution.

• Waive or repeal gas formulation (e.g. oxygenation) requirements under the Clean Air Act and related regulations.

...because somehow removing solutions to environmental externalities is what everyone wants.

• Encourage private-market projects to recover usable energy from oil shale and to otherwise increase production of renewable/alternative fuel sources.
• Strengthen the existing investment tax credit for Enhanced Oil Recovery (using modern technology improvements to extract oil from previously unavailable sources) in section 43 of the IRS Code.

...because we like free-markets especially the kind that subsidize our buddies.

• Waive the tariff on imported ethanol and waive regulations that limit refined gasoline imports.

...I actually like this one because it removes an inefficient policy.

So the Republican solution is to remove all of the policies that are designed to capture the external costs of driving whcih in turn would increase the social costs of driving.  Hmmmm...lower the individual cost of driving which will actually increase the overall social cost of driving.  Republicans are idiots. 

Since independents don't matter, I conclude my proof.  All politicians are idiots. 

Look, in all seriousness.  High gas prices are NOT an economic or political problem.  They are the result of the natural workings of markets.  There is nothing wrong with the market--and no reason, other than self-preservation and the false appearance of being able to do something, for politicians to intervene.  Supplies are decreasing--both temporarily through unexpected refinery shut-downs and permanently through stock depletion.  Demand is increasing--both in the U.S. and worldwide.  Both of these will cause gas prices to rise and that's good.  If gas prices don't rise, we will consume gas even faster and run out sooner.  Higher gas prices encourage conservation and encourage investment in alternatives.  High gas prices might be uncomfortable while we search for viable long-term solutions, but they're more comfortable than the alternative:  no gas and no solutions.

On May 17, 2007 I wrote:

I'm angry.  I can't believe we're right back where we were a year ago.  Gas prices are rising and Congress is trying to do something about it.  Eighty-two Democrats and 3 Republicans in the House have proposed the Federal Price Gouging Prevention Act (H.R. 1252) otherwise known as the FPGPA, pronounced STUPID.  So let's take a look at the STUPID price gouging bill...

NOTE: My serious take on the solution is at the end of the post...so if you want to skip my sarcasm, skip to the last paragraph. 

The STUPID price gouging bill will make it a federal crime to:

...sell crude oil, gasoline, natural gas, or petroleum distillates at a price that is unconscionably excessive or indicates the seller is taking unfair advantage [of] unusual market conditions (whether real or perceived) or the circumstances of an emergency to increase prices unreasonably.

Unconscionable excessive?  Unfair advantage? Increase prices unreasonably?  Yikes.

Allow me to interpret.  The STUPID bill makes it a federal crime to:

...sell crude oil, gasoline, natural gas, or petroleum distillates at a price that makes my constituents complain because they are too lazy to drive less at higher gas prices.

There are two possibile explanations for the Democrats proposal of the STUPID bill.  1) They think the public is too stupid realize they are trying to "do something" by proposing a STUPID bill, or 2) They are idiots.  Since Env-Econ readers obviously represent a cross-section of the public, and since Env-Econ readers are smart enough to know that this bill is STUPID, I have to conclude that 1) is logically impossible and therefore, 2) must be true.  So we've now proven that Democrats are idiots.  We're halfway there. 

In looking into the STUPID price gouging bill, I came across the Republican Study Committees reports on the STUPID price gouging bill.  In it, they list a set of alternative proposals for lowering gas prices.  They are:

• Streamline the environmental hurdles to building new oil refineries.
• Make it easier for small refineries to increase capacity.
• Allow more offshore (e.g. Outer Continental Shelf) and inland (e.g. Arctic National Wildlife Refuge) oil drilling.

In other words...screw the environment and roll back new source review.

• Temporarily suspend the gas tax.

...because driving more is always a good short-term solution.

• Temporarily suspend the gas tax and temporarily suspend spending on all transportation earmarks in the most recent surface transportation reauthorization bill.

...because driving more on crappy roads is an even better short term solution.

• Permanently reduce the gas tax.

...because driving more on crappy roads is an even better LONG term solution.

• Waive or repeal gas formulation (e.g. oxygenation) requirements under the Clean Air Act and related regulations.

...because somehow removing solutions to environmental externalities is what everyone wants.

• Encourage private-market projects to recover usable energy from oil shale and to otherwise increase production of renewable/alternative fuel sources.
• Strengthen the existing investment tax credit for Enhanced Oil Recovery (using modern technology improvements to extract oil from previously unavailable sources) in section 43 of the IRS Code.

...because we like free-markets especially the kind that subsidize our buddies.

• Waive the tariff on imported ethanol and waive regulations that limit refined gasoline imports.

...I actually like this one because it removes an inefficient policy.

So the Republican solution is to remove all of the policies that are designed to capture the external costs of driving whcih in turn would increase the social costs of driving.  Hmmmm...lower the individual cost of driving which will actually increase the overall social cost of driving.  Republicans are idiots. 

Since independents don't matter, I conclude my proof.  All politicians are idiots. 

Look, in all seriousness.  High gas prices are NOT an economic or political problem.  They are the result of the natural workings of markets.  There is nothing wrong with the market--and no reason, other than self-preservation and the false appearance of being able to do something, for politicians to intervene.  Supplies are decreasing--both temporarily through unexpected refinery shut-downs and permanently through stock depletion.  Demand is increasing--both in the U.S. and worldwide.  Both of these will cause gas prices to rise and that's good.  If gas prices don't rise, we will consume gas even faster and run out sooner.  Higher gas prices encourage conservation and encourage investment in alternatives.  High gas prices might be uncomfortable while we search for viable long-term solutions, but they're more comfortable than the alternative:  no gas and no solutions.

Comments

[Billy Beck]

"Look, in all seriousness. High gas prices are NOT an economic or political problem. They are the result of the natural workings of markets."

What bloody nonsense. Look: you're suggesting everything but *producing* our way out of this, and that is very much a political problem. If you don't think so, then let me know when this government will allow me to start drilling on the continental shelf or up in Alaska. Now, you can complain about the environmental implications, or what those resources are actually worth in the market (how long they'll last, etc.), but that won't make the *fact* of political interference go away. It just won't. It is a *fact* that there are important political impediments to production in this country, and anyone who doesn't include that in the analysis is useless, at least. To call all this "the natural workings of markets" is bloody ignorant, at best. It's simply not true.

[Mike Schneider]

Billy, he's not interested in greater productivity In fact, it's the last thing he wants.

Now go hug a tree, and like it.

[reason]

Ummm...
Billy there is a world market for petroleum products. Marginally increasing world production will make f.a. difference to the essential problem (and is hardly a short term solution to the short term situation).
So there you have it Tim - you can't rule out 1.
But basically the problem is that you elect lots of people in the US to the House of Representatives who are underemployed, as the most of ambitious of them are not part of the administration, (or the shadow administration) like they would be under a parliamentary system. The time for political reform has come I guess.

[Tim Haab]

Billy,

I agree up to a point (the point Reason makes). The political impediments you mention are minor in the grand scheme of the world market. The recent run-up in prices are mostly demand driven and political/government solutions are not the answer. If you can identify the market failure that is causing inefficient pricing of gas than I am willing to offer regulatory solutions. But markets reacting to increasing demand, in the way we expect, is not a reason to have government intervention in markets.

Mike,

I'm all for increased productivity. I'm also all for markets--not politicians--driving innovation, exploration and investment.

[robertdfeinman]

Politicians are not idiots, they say what is needed to retain their jobs. Symbolic legislation is one of the simplest things to do, even if it doesn't pass.

Now compare the life of a congressman, to say, a college professor. Base salary: $169,300, free mailing privileges, paid staff, free medical care, retirement plan which kicks in after only one term in office, ability to travel the world on the taxpayer's dime, etc.

Who is the idiot?

[Billy Beck]

"Marginally increasing world production will make f.a. difference to the essential problem..."

If that's true, then conservation is ridiculous on its face.

"If you can identify the market failure that is causing inefficient pricing of gas than I am willing to offer regulatory solutions."

I don't know how I am failing to make myself clear, but it's obvious that I am. "Regulatory solutions" is the very last thing that would ever enter my mind in all this. Everything the opposite. Get this government out of the matter of energy production in any way. Right instantly now: before the end of this business day.

[Tim Haab]

Billy,

Then we're making the same point.

Tim

[Billy Beck]

I don't believe that for a second, Tim.

Necessarily implicit in my point is the act of putting holes in the ground.

"Drill right now!
Drill today!
Drill all night!
Drill all the way!"

That's what I always say.

[sandra]

hey, whats this about a stupid bill
this is beyong crazy how the government has chosen to put the gas prices in our pockets you notice it doesnt seem to be bothering them in the least, unfortunetly if you are like me when the prices go up, my income doesnt i think it is so totally wrong to make the middle man and or the poor man the scape goat for the gas prices
president bush and govenor shwartenegar do something now because we all know if you choose to you can do something right now about these gas prices....

[gormk]

Don’t you get it Billy? The United States have run out of significant viable oil reserves. The Alaskan ANWR reserve (ignoring serious environmental issues) is a piss in the ocean. Whatever you do in an attempt to increase short-term production in the US, if countries like mine (www.norway.no/), not to mention these countries (www.opec.org/home/), and add this country (www.cnn.com/2007/WORLD/americas/11/08/brazil.oil.ap/), don’t like the effect in the world market, we’ll just turn off/down our wells for a bit.

Oil exporting countries LIKE HIGH PRICES! The United States is an oil-IMPORTING country. Get it? So drive less. Leave the Harley at home. Take the bus for a change.

Tim: Good luck teaching ECON101 to this audience:
http://www.two--four.net/Essays/toolate.html

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