Omigosh, omigosh, omigosh (Obama assails ...):
Barack Obama didn't back down yesterday in his opposition to a so-called gas tax holiday this summer, becoming more vocal in calling it political pandering and slamming John McCain and Hillary Clinton for proposing it.
He told voters in Winston-Salem, N.C., that suspending the 18.4-cents-a-gallon federal gas tax between Memorial Day and Labor Day would save them only about $25 to $30. Some economists, he said, believe the proposal could backfire and actually raise prices by increasing demand. "We don't know that the oil companies will actually pass on the savings," he added.
Wrong, wrong, wrong: A lower gas price causes quantity demanded to increase as consumers move down the demand curve. The only things that cause gas demand to change are changes in income, prices of substitutes and complements, tastes and preferences and expectations (e.g., fill your gas tank in Louisville, Ky before Derby Week). I demand a retraction.
Who are these "some economists" that Obama is talking about? Did they get their degrees from an SEC school or something? Name names so that we can have an econoblogosphere beatdown! Out these blasphemers!
Note: I think Obama got the $25 to $30 number correct.
Hat tip: Larry Ellis.
Update: Here is the YouTube clip.
