The Electric Commentary

Saturday, November 12, 2005

The Washington Post On "Windfall Taxes"

They get it exactly right. Exactly.

Congress would do well not to repeat those "remedies," because both turned out to be disastrous. The case against price controls is especially powerful. When oil prices spike, it is because of scarcity -- for example, scarcity caused by hurricane damage to petroleum infrastructure on the Gulf Coast. The best way to manage that scarcity is for producers to make a special effort to get oil to the market and for consumers to make a special effort to cut back. Higher prices encourage both of those responses; rather than complain of price gouging, Congress should celebrate price signals. By contrast, controlled prices create no pressure for extra production or conservation. They just create gas lines: Witness the 1970s.

Just read the whole thing. Even the title is brilliant.


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