Four-dollar diesel (forgive an agricultural bias) is an ugly thing–but not the ugliest of things. To grossly paraphrase John Stuart Mill, the state of moral feeling that thinks that government should “keep prices reasonable” is far worse.
Prices at the pump are (for the most part) an elegant demonstration of market forces at work. It should come as no surprise then, that they tend to raise the ire of those who distrust markets and favor their manipulation. (And what goes up also comes down–the trend is positive right now.)
Whether it’s because the prices are so prominently displayed, or because so many of us so often pay them, fuel prices are a tempting target for the command-and-control set.
Economies (and Psychologies) of Taxation
The keen attention we Americans pay to fuel prices is both a blessing and a curse.…
Picture your neighbor’s pool. Unless you live in Malibu, it’ll contain about 6,000 gallons. That’s the “Gulf” for purposes of discussion. Now go to your garage, get a quart of oil and pour it in when he’s not looking. Pretty good sense of the oil spill in the Gulf of Mexico, right?
Nope, not even close. Put a drop of that oil onto a sheet of paper and carefully cut it in half. Now do it again and toss that quarter of a drop into the deep end. Even this quarter droplet (about the size of the comma in this sentence) is about 10% too large, but NOW you have a sense of what 4.9 million barrels of oil in the Gulf looks like.[1]
Now that we’ve grappled with the issue of scale, let’s look at the aftermath of this ‘catastrophe.’ …