I think most Democrats in Congress went to college, though there is seldom any outward sign of it. While there, they undoubtedly learned about the law of supply and demand. Unlike the Democrats’ opinions about the economy, it is called the law of supply and demand because it is not open for interpretation or opinion. It is what it is. You don’t get to spin it.
The booming economies in China and India are sucking massive amounts of oil, which causes the price to rise. Federal gasoline taxes cause the price to rise. The way to lower that price is to increase supply and cut the taxes.
The Democrats won’t do it. And there can be no other reason for it than to keep the gas prices high so the voters blame the Republicans for it in November. The Democrats (not surprisingly) are punishing the American people for their own political gain.
Newt Gingrich should sit McCain down and tell him to make gas prices the single issue around which he bases his energy policy. High gas prices are not an abstract concept. Voters understand them, hate them, and unless McCain makes it his issue, they may single-handedly kill the Republicans in November.
But McCain can beat them at their own game. Newt Gingrich has three ways to lower gas prices. McCain should pay attention.
If McCain answers every energy question in terms of lowering gas prices, he will own this issue. Drilling everywhere we can will lower gas prices. More nuclear power plants will cause a drop in gas prices. You want gas prices lower, build some new refineries. Kind of, “It’s A Supply Thing, Stupid” approach.
The Democrats are absolute sitting ducks on this issue. They won’t allow us to drill our own huge reserves that are located in places where no one has ever been and no one will never go. This week they tried, and failed, to raise taxes on oil company profits, which would have increased the price of gas.
Obama even opposes suspending the federal gasoline tax for the summer, despite having voted three times for a gas tax holiday when he was in the Illinois legislature.
Obama also says that high gas prices aren’t really the problem, it is just that they went up too fast.
McCain should remind voters what Nancy Pelosi said 2 years ago.
With skyrocketing gas prices, it is clear that the American people can no longer afford the Republican Rubber Stamp Congress and its failure to stand up to Republican big oil and gas company cronies. Americans this week are paying $2.91 a gallon on average for regular gasoline – 33 cents higher than last month, and double the price than when President Bush first came to office.
“With record gas prices, record CEO pay packages, and record oil company profits, Speaker Hastert and the Majority Congress continue to give the American people empty rhetoric rather than join Democrats who are working to lower gas prices now.
“Democrats have a commonsense plan to help bring down skyrocketing gas prices by cracking down on price gouging, rolling back the billions of dollars in taxpayer subsidies, tax breaks and royalty relief given to big oil and gas companies, and increasing production of alternative fuels.”
And now, two years after winning control of Congress, gas is $4.00 per gallon, and the Democrat Congress has done nothing.
In April of this year, she sent a letter to President Bush with some great solutions.
On Thursday, Pelosi urged President Bush to stop suspend deliveries to the Strategic Petroleum Reserve. She also has called on Bush and congressional Republicans to work with Democrats to pass legislation to crack down on gasoline price gouging, hold OPEC accountable for price fixing and end tax breaks for oil companies and invest the savings in renewable energy.
No drilling. No gas tax reduction. No exploration. Her solution: Investigation and Litigation.
McCain should beat Obama like a rented mule with this issue and he will win over the bitter clingers whose weekly household incomes are being hobbled by high gas prices. It is a winning issue, because people care about the freakin’ endangered blind mole-rat right up until the time they figure out that the rat is the reason they can’t afford the gas to get to work to feed the family. Then they’ll want to run the little bastards over.
H/T Hot Air
Also find Bill Dupray at The Patriot Room.
McCain has jumped on the “obscene oil company profits” bandwagon according to reports of his townhall meeting last night. The guy is a moron.
Tom
You mean this “townhall” meeting?
You really don’t know very much about McCain do you?
http://www.johnmccain.com/Informing/Issues/da151a1c-733a-4dc1-9cd3-f9ca5caba1de.htm
The way to lower that price is to increase supply
Sure…
and cut the taxes.
Cutting taxes will have very little effect on the consumer price (short term) in the current situation. Prices are high because it is extremely difficult for producers to increase the supply. Normally, the supply would rise on a tax cut as producers and consumers split the discount between them. Here, almost all of the tax relief would accrue to the producers or possibly other parts of the supply chain (kind of the opposite of taxing windfall profits…). In the long term this would provide even more incentive than there already is to increase the supply of gasoline, but anyone who thinks that it would help in the short term is basically saying that suppliers are currently underproducing because prices aren’t high enough.
Also, if the tax were removed temporarily (gas tax holiday) the likely effect would be a short small drop in prices as all possible gasoline (any slack in the supply chain) was sold during the tax holiday timeframe, followed by a more severe price spike once the holiday was over. In other words it’s a stupid idea.
All of these tax proposals are just flimflam that obscure the basic problem that high prices are communicating: we don’t have enough gasoline. And you aren’t going to suddenly create millions of gallons of it by fiddling with the tax code.
The federal Gasoline Tax is $0.18 per gallon. State Taxes average around $0.29 per gallon.
For most of the rest of the high price you can thank the Bush administration.
http://www.globalresearch.ca/index.php?context=va&aid=8878
Why do you Republicans hate business so much?
Folks are just trying to make a buck.
Ha. Ha.
From the article:
“What the Senate committee staff documented in the report was a gaping loophole in US Government regulation of oil derivatives trading so huge a herd of elephants could walk through it. That seems precisely what they have been doing in ramping oil prices through the roof in recent months.
The Senate report was ignored in the media and in the Congress.”
That would be the _Congressional_ branch of the Bush administration – you know…the one controlled by Democrats.
The Federal tax goes to one place, it is dedicated to our nation’s highways. They are in very bad shape I drive a truck, the roads are falling apart. It is false economy to skimp on maintaining roads and bridges.
Taxes are taxes. Cut them and things are cheaper. Is somebody suggesting the federal government doesn’t get enough in tax revenue?
Supply is generated by supplying stuff. How hard is this?
Prices are high because it is extremely difficult for producers to increase the supply.
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Oil, gas, gold, wheat, rice, and many other commodities are priced high because the Federal Reserve f-ed over the US Dollar to try to stop banks, hedge funds, and investment brokerages from going belly up due to the housing related credit crisis.
OPEC is responding to the deminished value of the dollar (and their standard of living) by reducing oil production thus increasing the price of oil per brrl.
Cutting taxes would help but that would only reduce the “stand of living” for the Federal Govt. What would help is for Big Oil to spend some of thier huge profits and build more gasoline refineries! But they are not about to do that……
because the gov’t has stood in the way and has not allowed the construction of any new refining facilities for the last 37 years.
because the gov’t has stood in the way and has not allowed the construction of any new refining facilities for the last 37 years.
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Ya, well, in reality, they are probably just pointing the finger at each other…..
No, in reality the oil companies would love to build new refineries.
That would ultimately increase their profits.
Taxes are taxes. Cut them and things are cheaper.
Normally this is true. But it becomes less true as supply becomes less elastic. If $3.50 of a $4.00 gallon of gas goes to the producers (oil companies, service stations, whoever), and $0.50 goes to government, then removing the tax will allow the supplier to sell the same amount of gasoline at $4.00 (and keep the extra $0.50), *or* sell some larger amount of gasoline at some intermediate price lower than the original $4.00 (but keeping more for themselves). If there were a lot of spare gasoline that was being held back because the current prices weren’t profitable enough, then you would see a significant drop in price (though less than the full amount of the removed tax) when it came on the market. If on the other hand the refineries are already running pretty flat out and there isn’t really a lot of spare capacity to respond to the price incentive, you get a situation closer to the first one, where the amount of gas sold increases only very slightly and the price hardly moves – all the money goes to the producers.
I’m not saying that’s a bad thing – in the long run, extra incentives mean that someone will find a way to produce more gasoline. But it’s definitely true that in the *short term*, removal of the gas tax may hardly move prices at all. Look at it this way – over the past year, gasoline prices have risen by more than $1.00 a gallon. During that time, the amount supplied to US consumers dropped by a couple percentage points. I think the gas companies would love to be selling more gasoline at these high prices, but they aren’t even supplying as much as they did last year. Do you think that offering them another $0.18 per gallon will change that?