"There are only two ways of telling the complete truth—anonymously and posthumously."Thomas Sowell

Thursday, May 04, 2006

"Gas Gouging" Honor Roll

In a vote of 389 to 34, these are the only House members who had the integrity and common sense to vote against the scandalous “Federal Energy Price Protection Act,” including the one uniquely honorable Democrat.

Burton (IN)
Campbell (CA)
Franks (AZ)
Garrett (NJ)
Johnson, Sam
King (IA)
Lungren, Daniel E.
Miller, Gary
Wilson (SC)


James Elliott said...

I gotta say, I'm against the whole price gouging and windfall taxes argument. I wish that one politician - or pundit, for that matter - had the cajones to stand up and tell people, "Want to pay less for gas? Don't let your 5'1" teenage daughter have the Ford F-150 for her sweet 16. Only buy a Suburban if you have a family of 12. Have to commute to get to work? Try your hand at the Honda Civic instead of the Hummer. Or, if you absolutely need luxury, go with a nice Acura TL or something. You don't need a damn monstrosity, unless you're a contractor or a farmhand. Want to get serious about lowering gas prices? By hybrids or flex fuel vehicles. If we all get on the waiting lists for them, guess what? They'll make more of those cars and less of the SUVs."

But nooooo. The buying public wants it all, dammit.

The Classic Liberal Anonymous said...

I'm shocked ... Kucinich isn't completely out to lunch.

The irony is that the House, in essence, wants lower prices. As Alan points out, that will artificially increase demand.

Yes ... I know ... gasoline is not as elastic as some other commodities, but the above still holds true.

The price system has important work to do. The House of Representatives, evidently, does not. If anything needs investigating, it's the Congress. Cheap politics cannot produce cheap oil.


The Classic Liberal Anonymous said...

James ... I agree with your sentiments, although I think the "flex fuel" part is out of place.

If we all get on the waiting lists for [efficient vehicles], guess what? They'll make more of those cars and less of the SUVs."

Exactly. The auto companies make what people want to buy.

Nicely said, James.

Tom Van Dyke said...

I could not take at face value that Dennis Kucinich voted against the bill on its merits, which are zero.

Aha, and thank Google. Likely he voted against it because it wasn't stupid enough:

WASHINGTON - April 26 - Congressman Dennis J. Kucinich (D-OH), author of HR 2070, a bill to place a 100% excess profit tax on the oil companies, gave the following speech today on the House floor on the rising cost of gasoline:

“Congress must break the hold that the oil companies have on the politics of our country. The American people are demanding action. The price of gasoline has climbed to over $3 a gallon, heading towards $4 a gallon and maybe $5.

“Since 2001, the five largest oil companies have made over $280 billion in profits. Exxon Mobil alone made $36 billion in profits in the last year.

“There is only one way to stop the oil and gas companies from an endless series of increases in the price of gasoline.

“Almost fifty Members of Congress have now signed onto my bill, HR 2070, for a 100% excess profits tax on oil companies’ profiteering.

“This act does not tax the price of gasoline, so it will not increase the cost. However, by taxing excessive profits, it puts the brakes on price gouging and will lower the price of gasoline.

“Congress can not stand by while the oil companies are stealing from the American people.”

The Classic Liberal Anonymous said...

I am no longer shocked, but educated.

Thanks Tom.

James Elliott said...

"James ... I agree with your sentiments, although I think the "flex fuel" part is out of place."

How so? Out of curiosity.

Devang said...

What continues to amaze me, and has for a while, is just how big of a monster the American economy is. We produce only ~10% less E-85 than the world's biggest producer - Brazil, while the next biggest producer produces far far less than the biggest two.

Bio-Diesel is something I would think would be main stream in Europe considering the prevalance of Diesel cars there, unless all Diesel available there is a mix that I'm unaware of, Introducing Bio-Diesel here will be much harder than introducing it in Europe (Even taking the 18-wheeler consumption into account).

LNG has detrimental environmental effects, even though it might be used widely in developing countries.

Even if we doubled or tripled all of our domestic capacity, in E-85 and Bio-Diesel, it might offset growth, but do no more. That fact should be enough for most to realize that even the 2 and 5 year tax breaks will do nothing, nada, squat. The only alternative left then, is conservation through alternative means of transportation, may it be E-85 cars or public transportation. And offcourse, localization of supply chains (I believe there's a book out arguing the same). Sadly, the "free" market is incapable of doing what's needed.

Excess oil-profits should absolutely be taxed, a slate article made the best case for it:

Ordinarily, we shouldn't want the government to decide when profits become "excess." But the case of huge profits from the run-up in oil prices is different for two reasons. First, it is unusually clear that these profits have nothing to do with productivity. Diverting them to the U.S. Treasury would have no effect on the incentive to extract more oil from American ground. Second, some or all of these profits are directly related to a situation that is imposing huge sacrifices—financial and otherwise—from others; that is, the Iraq war.

Taxing the profits might even convince the companies to promote and produce more alternative fuels as a new revenue and profit stream.

The Classic Liberal Anonymous said...

"James ... I agree with your sentiments, although I think the "flex fuel" part is out of place."

How so? Out of curiosity.

Read under net fuel energy balance.

I do understand that there is some debate associated with how to calculate the net energy balance.

For corn-based ethanol, the E_out/E_in appears to be near 1, and will probably never be > 2.

Sugar based ethanol, OTOH, has an E_out/E_in close to 8.

I think Alan referred to reasons why the USA will have a problem with getting sugar at a reasonable price.

The Classic Liberal Anonymous said...

James ... you may not revisit this thread, but here is an excellent writeup on the "flex fuel" problem.