Liberal gasoline proposals defy economic theory

There are many misconceptions floating around these days, like the nutritional value of… There are many misconceptions floating around these days, like the nutritional value of lettuce, the existence of a sugar high and any distinction between World of Warcraft and real life. But above all, the greatest delusion is that the liberal wing of this country is concerned about the woes of rising gas prices affecting the average American citizen. Evidence disproving this fallacy can be found in very recent history.

Point one: $7-per-gallon gas. That is what this country needs to fight our nasty oil addiction, or at least that is what Lester Lave is reported as indicating, according to an article in the Pittsburgh Tribune-Review. Lester Lave, a Carnegie Mellon University economics professor, supports increasing the federal tax on gasoline to $4 a gallon. The 700 percent increase in federal taxes on gasoline would create an appropriate price that would begin reducing the country’s oil demand, says Lave.

Point two: back in mid-March, Rep. John Dingell, D-Mich., supported putting a 50-cent tax on every gallon of gasoline.

Point three: the Earth Policy Institute, a liberal environmental organization, proposes raising gas taxes by 30 cents a gallon each year for a decade, which would be offset by a reduction in income taxes.

All three of these ideas are based on the very sound economic principle that as the price of a good increases, the demand for such a good decreases, assuming the good is not completely inelastic. Basically, gasoline consumption will decrease if the price per gallon increases. Finally, liberals have acquired some knowledge of economics, but they’re unfortunately using it to gouge the American public.

What is truly intriguing is the motivation for such tax elevations. Since I’ve already conceded that liberals have discovered one of the many economic truths that always seem to elude them, I will – perhaps naively – assume they also understand that the more inelastic a product behaves, the greater the opportunity the government has to implement a tax effectively. Every penny increase in the price of gasoline does not decrease the consumption of gasoline by an equitable amount. Instead, given gasoline’s relatively inelastic nature, as the price of gasoline increases, the demand for it barely retreats. Therefore, the government can raise gasoline taxes steeply without causing too great a decrease in consumption.

I usually don’t entertain conspiracy theories, but I am willing to say that the liberal base of the Democratic Party is willing to use the United States’ oil addiction to serve the government’s interest, i.e. government tax revenues. Lave believes the $4 tax would pump the government’s coffers by about $500 billion a year. Is it a plot against the American driver? I’ll leave that for you to decide.

But know this, under the guise of environmentalism and energy independence, liberals are willing to skyrocket gasoline taxes. They seek to force you into hybrid cars, driving E85 gasoline, using public transportation and car pooling. While these ideas by themselves sound innocent, the government should not be used as an engine for change in the driving habit of U.S. citizens. Liberals, au contraire, want to rev up the social change engine, which of course is fueled by greenhouse gas-free hydrogen gas, and create the “birds chirping and singing while dressing you in a beautiful dress” world they envision from atop their ivory tower.

Instead of allowing the market to allocate goods, liberals want to tinker with gasoline prices to achieve their own goals without regard to the effect on the American consumer. The United States runs on oil – not Dunkin Donuts, even though the commercials are quite convincing. Doubling the price of energy required for transportation will essentially cripple the economy. The movement of products will become more expensive, and such input price increases will inflate the price consumers pay at the cash register for all products, from clothing to cookies.

So the next time you hear liberals tell you they “feel your pain,” think twice. Will their policies serve the interests of the American public or the interests of the federal government? When you look up at the price listed on the big board in front of Exxon-Mobile, ask yourself how much the government is profiting from your reliance on oil. A questioning populace is always the bane to liberalism.

Protest taxation, not war. E-mail Gregg at gjs22@pitt.edu