Obama and High Gas Prices: The Great Conspiracy

What You Say To Someone Who Believes Obama’s To Blame For High Gas Prices
by Simple Simon

Simple Simon is hearing a lot of conflicting information these days about gas prices.

One. Republican Louisiana Governor Bobby Jindal recently claimed that gas and oil prices are “the highest in a hundred and fifty years.” Well, that’s not true. They peaked in 2008 under George W. Bush.

Two. Republican presidential candidates all say that the Obama administration has stopped or sharply curtailed drilling in this country. That’s not true either. It doesn’t seem to matter to them whether something’s true or false.  If it reflects negatively on Obama, it must be true.  The truth is, even though it doesn’t matter to them, American oil production is up.

Three. Most Americans believe–Democrats and Republicans–that we are increasingly dependent upon foreign oil.  Well, Simple Simon was surprised to learn that American dependency on foreign oil has dropped dramatically during the Obama administration.

Four. Simple Simon knows that the big oil companies are making money hand over fist. One company reported making larger profits last year than has any company in world history. Simple Simon doesn’t mind people getting rich–that’s the good ol’ American way, but Simple Simon does not think it’s right for oil companies to get a tax write-off.

Five. Americans are using less gasoline now than they did four years ago. Cars are more efficient–partly due to the Cash for Clunkers program that got a lot of gas guzzlers off the highways– and also because of the economy, Americans have had to become a bit more frugal.

Six. Simple Simon believes the war mongers who are lusting after a new war–this one with Iran–are driving up the price of oil.

Seven. Simple Simon has heard that the Obama administration is engaged in a conspiracy to drive up gas prices.  Now, that requires some background information.

To get the answer, Simple Simon found a fine article written by Elizabeth Kolbert in the April 2 issue of the New Yorker. After reading it, Simple Simon has concluded that if there’s a conspiracy, there are a lot of economists in on the plot–including a top adviser to Mitt Romney, one Greg Mankiw, a Harvard professor.  Imagine that!

Here’s what Mankiw says: “Economists who have added up all the externalities associated with driving conclude that a tax exceeding $2 a gallon makes sense. (The current tax is 18.4 cents a gallon.)

Mankiw explains: “By taxing bad things more, we could tax good things less.”

Simple Simon thinks this concept makes sense, but he doesn’t want to see it happen in a sudden jolt.  That would really hurt the economy, which is starting to recover.  However, gradually raising the federal tax on gasoline toward the $2-a-gallon mark would go a long way toward reducing the deficit–that along with repealing the tax write-off of big oil.  And it would certainly make alternative energy and mass transit economically feasible and more appealing to Americans.


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