Monday, August 22, 2005

Senate to Hold Gas Prices Hearing

On September 8 the Senate will discuss the recent increases in the price of gas. This I believe is cause for concern, especially with politicians spewing things like,

Clearly, we need to have the very best advice and counsel on what actions can be taken to help lower the cost of gasoline.

- New Mexico Sen. Jeff Bingaman, the panel's senior Democrat

Lower the cost of gas? I think this Senator needs to go back and visit his econ 101 notes. The only way government can lower the cost of gas (save a price ceiling) is by supplying more oil, or somehow reducing the demand. We know the price ceiling idea is out of the question, it will only exasperate the problem by causing a shortage.

So what to do? How about nothing? People will alter their spending patterns as the price of gas rises and occupies more of individuals' budgets. Perhaps they will start to carpool with neighbors, maybe ride bike, trade that SUV in on a hybrid car, move closer to work, spend less on that pesky cell phone bill, or buy more ground beef and less filet mignon. Just let the spontaneous order of the market work its magic and people will make decisions on their own and in their own self interests while finding solutions to deal with their changing gas budget constraints.

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