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Location: Georgia Southern University, Georgia, United States

Saturday, September 10, 2005

Politics as Usual

The Governor of Georgia has led the State legislature to repeal excise and sales taxes on gasoline. At the same time, he threatens retribution against gasoline retailers caught "price gouging." Let's see how this works, shall we? A Catergory 5 hurricane wipes out major southeastern oil port and adjacent refineries - oil and gas supply are signicantly reduced at a time when world supply can barely keep up with demand. Basic economic principles are validated as retail gas prices quickly rise in response to panic buying and decreased supply. Basic government knee-jerk response is also just as predictable - accuse sellers of gasoline who charge what people are willing to pay of "gouging" and threaten to prosecute them, making certain that gas suppliers from other regions have no incentive to reroute gasoline our way. And, to top it off, since the problem is a short-term shortage of supply, for good measure reduce the price at the pump so drivers will not be encouraged to conserve, keeping demand high.

It all rather reminds us of something H.L. Mencken once wrote, "Democracy is the theory that holds that the common people know what they want, and deserve to get it good and hard. "

Not that we don't like tax cuts, we do. But we prefer the permanent kind rather than transitory relief that distorts markets. Speaking of which, why is it that newspapers consistently refer to this tax rollback as "costing the government"? We have yet to see it characterized as "saving the taxpayer."

1 Comments:

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4:31 AM  

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