Saturday, August 02, 2008

Gas Prices are Inversely Proportional to Sensibility of Economic Proposals

Apparently Obama is sounding dumber than usual on the topic of high gas prices:
ST. PETERSBURG, Fla. -- Democratic presidential candidate Barack Obama Friday pushed for a windfall profits tax to fund $1,000 emergency rebate checks for consumers besieged by high energy costs, a counter to Republican rival John McCain's call for more offshore drilling in coastal states like Florida.
Allow me to spell it out for any of you to whom this seems reasonable. There are two parts to this plan:
  1. Windfall profits tax on oil companies
  2. $1000 rebate checks intended to be spent on gasoline
Now allow me to translate these into what it's really doing:
  1. Taxing the production of petroleum products, including gasoline
  2. Subsidizing the consumption of gasoline
These will each have an effect on gas prices:
  1. The costs of taxing the production of gasoline is passed on to consumers, raising prices
  2. Subsidizing the consumption of gasoline increases demand, raising prices
What part of this is a solution to the problem of high prices? Obama has an economic advisor. Does he know he has one? Because Obama's clearly not listening to him/her/them.


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