Wednesday, May 10, 2006

Some Basic Economics

Here is a little primer from Thomas Sowell on how deceptive politicians have been on oil prices.
But this is the age of emotion, not analysis.

Politicians are even more hypocritical. The government collects far more in taxes on every gallon of gasoline than the oil companies collect in profits. If oil company profits are "obscene," as some politicians claim, are the government's taxes PG-13?

The very politicians who have piled tax after tax on gasoline over the years, and voted to prohibit oil drilling offshore or in Alaska, and who have made it impossible to build a single oil refinery in decades, are all over the television screens denouncing the oil companies. In other words, those who supply oil are being denounced and demonized by those who have been blocking the supply of oil.

Given the vast amounts of gasoline sold across the length and breadth of this nation, and given the mega-billion dollars involved, whether or not some corporate executive has an inflated pay scale is unlikely to explain the price of gasoline.

It may allow some people in the media to vent their emotions and some politicians to create a bogeyman, since they can't play St. George without a dragon. But cheap demagoguery cannot explain expensive gas.
And if you don't want to learn economics from an economist, how about NPR? One of the best explanations of what is going on with gas prices came from an article on their site. I wish that more of the media would explain the issues so clearly to their audiences. If people heard this on a daily basis, perhaps it would sink in.