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Jewish World Review Sept. 28, 2005 / 24 Elul, 5765 Market protects us better than politicians ever could By John Stossel
http://www.JewishWorldReview.com |
"It's going to be a catastrophe!"
So I keep hearing.
The damage from hurricanes Rita and Katrina will send gas prices
through the roof and destroy the economy!
"It's inevitable that this is just the beginning, it's not the
end, of this gasoline crisis!" Sen. Charles Schumer told me, as Rita
approached last Friday. The New York Democrat went on to say that we're
"twiddling our thumbs while Rome burns ... we are weakened in every way!"
He is eager to spend your money to cure his panic. Schumer wants
a new "Manhattan Project" that would use huge amounts of your money to fund
"independent energy sources." I reminded him that the last time government
tried that, it wasted billions on the totally failed synfuels project.
Schumer said that was a failure because "political leaders" chose synfuels,
but this time Congress would have "non-politicians" decide what projects to
fund.
Sure they would.
If non-politicians are going to decide what projects to fund,
why do we need Chuck Schumer? We already have a system in which
non-politicians decide what projects to fund. It's called "the market."
If the price of a barrel of oil stays above $50, lots of
entrepreneurs will scramble for ways to supply cheaper energy. They'll come
up with alternative energy sources or better ways to get oil out of the
ground. At $50 a barrel, it's even profitable to recover oil that's stuck in
the tar sands in Alberta, Canada. As Peter Huber points out in his book,
"The Bottomless Well," the Athabasca tar sands alone contain enough oil to
meet our needs for 100 years.
After Hurricane Katrina, he and Sen. John Corzine, Democrat of
New Jersey, invited reporters to a gas station where they said gas prices
were rising not because demand exceeded supply, but because oil sellers are
doing something fishy.
"Up 50 cents one day, down 25 cents the next, then up another
30!" Schumer told the cameras. "Something's wrong with the market!"
Something's wrong with the market? I'd think "up 50 cents one
day and down 25 the next" shows the market working very efficiently. The oil
business is hugely competitive. Gas station profit margins are paper-thin.
Station managers have to adjust prices constantly to keep from losing
business to a station down the block. Any of us can see the posted prices
without even having to leave our cars, and people often drive blocks just to
save a penny.
Despite Schumer's complaints about "catastrophe," today's gas
prices aren't especially high. Even after the price increases of recent
years, and after the high gas taxes imposed by our bloated government,
today's price ($2.75, for regular, according to the AAA) is still lower than
it was in 1981 ($2.86, adjusted for inflation). The politicians won't tell
you that, and neither will most of the media. When they rant about "record"
gas prices, they usually forget to adjust for inflation.
Fox News' Bill O'Reilly last week also ridiculed the idea that
competition sets gas prices. On his popular TV show, he said, "Somebody
tells your local gas station owner exactly what to charge! Somebody does
that!"
Really? There's a secret price dictator?
Why don't people trust the market? Schumer thinks
congressionally appointed "experts" are the answer, but imagine how much gas
would cost if the government produced it! At least $20 a gallon. Gasoline
isn't easy to make.
First, the oil has to be found, and then sucked out of the ground
... sometimes from deep beneath an ocean. The drill may have to bend 90
degrees, dig sideways and bend down again, sometimes drilling through 5
miles of earth. What they finally pull out of the ground has to be delivered
through unbelievably long pipelines or shipped in monstrously expensive
ships, converted into three different formulas of gasoline, and then pumped
into trucks that cost more than $100,000 each. Then your local gas station
has to spend a fortune on safety devices to make sure you don't blow
yourself up.
Even after all that, a gallon of gasoline still sells for less
than the equivalent amount of Evian.
The price will go up and down, and we can count on the market to
protect us better than politicians ever could.
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© 2005, by JFS Productions, Inc. Distributed by Creators Syndicate, Inc. |
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