Jens 'n' Frens
Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

"A strong conviction that something must be done is the parent of many bad measures."
  -- Daniel Webster

Tuesday, May 02, 2006 :::

Bernie Sanders, Vermont's socialist Representative in the House, wants an "energy summit".

Sanders, of course, blames the oil companies for the high price of oil. Among his short-term solutions to the problem are a windfall profits tax and "reducing the high levels of CEO compensation in the oil industry."... With an electorate feeling everything from frustration to outright fury with the status quo?especially as it applies to the cost of gasoline?you'd think the "radicals" could come up with solutions that were, well, a bit more radical. The Sanders's solutions depend predictably on government action. The government does not discover, transport, or refine oil, so its influence on the supply side is limited to incentives. And a "windfall profits tax" does not exactly qualify as an incentive.


Sanders wants all sorts of things to come out of his summit. Included are lower prices and more conservation, which is to say, he wants to come up with hot ice. Nothing inspires people to cut down on how much they drive like paying sixty bucks to fill up the tank. If Sanders could force the price of gasoline down by fiat, people would buy more gas guzzlers and drive them down the driveway to pick up the newspaper.
Well, if the demand curve could be shifted down, consumption and price could both go down. I'm not sure how to do that, beyond developing substitutes. Maybe that's what Sanders is thinking, but it seems more likely to me that he's just nuts.

Incidentally, when I wrote a couple entries ago that people ought to have a rudimentary understanding of economics, this was the sort of thing I meant.

::: posted by Steven at 9:34 PM

Hot ice? Radical.

Incidentally, one of the neat things about hearing a Goldman Sachs analyst speak about oil, then take questions from other Goldman Sachs employees, was simply the pleasure of a discussion of oil that utterly lacked economic illiteracy. I thought of asking whether the speaker had any guess as to what portion of a windfall-profits tax would be passed on to the consumer, and how much the price would go up if such a tax were passed, but it wasn't quite on topic, and I needed to duck out early anyway.
Post a Comment

Comment Policy

Dollars and Jens
Steven's web-site

Kitchen Cabinet
Colby Cosh
The Volokh Conspiracy
The Corner
The Bleat from James Lileks
Tim Blair
Daily Ablution
Mickey Kaus
Dave Barry
How Appealing
Virginia Postrel
Reason's "Hit and Run"
Captain's Quarters
Roger L. Simon
Power Line
IWF's InkWell
Blogs for Bush
Chetly Zarko
Signifying Nothing
Cosmo Macero
Hub Blog
Ex Parte from Harvard Law's Federalists
Harvard CR blog
Priorities & Frivolities
Daley News
Emil Levitin
Politica Obscura
Wave Maker
Town Watch
Worcester County Repubs

Election '08
Don't Vote
Dave Barry
John McCain

Other Sites of Note
Townhall columnists Cambridge Republican City Committee
Cambridge Chronicle
Robert Winters
Boston Herald
Boston Globe
Boston Metro
Channel 5
Commonwealth Mag
Fox News
Massachusetts Republican Assembly
Robert Benchley Society

U.S. Constitution
9/11 commission report [7 Meg PDF]
Iraq Survey Group report
Fahrenheight 9/11 deceits


Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

Powered by Blogger