You would normally think a magazine entitled BusinessWeek would be pro-business, for free markets, and against big government. A write-up in their August 4th edition suggests otherwise.
In the cover story entitled "The Real Question: Should Oil Be Cheap?", the author John Carey makes the argument that oil prices should have a floor to them.
But Amite Foundry's resurgence is just one of countless examples of a
deeper truth: Expensive energy, in many ways, is good. Why? When the
price of oil goes up, people will use less, find substitutes, and
develop new supplies. Those effects are just basic economics. Things
are so painful now, many economists say, because of the past two
decades of cheap oil. Prices stayed low in part because they didn't
reflect the full cost of extras such as pollution, so there was little
incentive to use energy more wisely. If those extras had been counted,
the country would be better prepared for both today's soaring prices
and the day that global oil production begins to decline.
That's why there is growing interest, from both the left and right,
in a policy that uses taxes to put a floor under the price of oil.
Above a certain level—say $90—there would be no tax. But if the world
market price dropped below that, taxes would kick in to make U.S. users
pay the target amount.
Expensive energy is a powerful medicine. It may hurt when taken, but
it brings long-term cures for a host of ills. It compels companies and
people to put fewer miles on the car, ditch the SUV, or install more
efficient heating, as Eastern Maine Medical Center in Bangor did: The
hospital saves $1 million annually with a system it installed two years
ago. Higher costs are beginning to nudge America away from its
traditional traffic-congested suburban sprawl to denser, less
car-dependent communities. Utah has a government-sponsored bike-to-work
program. "When the Republican governor of the reddest state in the
union is promoting bicycling as a preferred mode of transportation, you
know people are paying attention to the price signals," says Keith
Bartholomew, professor of urban planning at the University of Utah.
Sounds like just another argument to use the IRS tax code to prod U.S. citizens to do what the government mandates. This time, it's mandating better gas mileage. It's better when the free market itself moves people to do things. That's what is really occurring now. It's been said that necessity is the mother of invention. When people actually need to, they find ways around problems. Right now, that problem is high fuel prices. If the problem was high taxes, they'd find another solution. I don't think we'd like the consequences created by higher taxes if it was the cause of high fuel prices rather than some part the free market being the cause.
-Colonel Steve
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