Wednesday, April 26, 2006

Price Gouging

I am as unhappy about high gas prices as the next guy.

However, as a believer in freedom and the free market, I think screams of price gouging are simply wrong-headed, as Cox and Forkum point out in this brilliant cartoon.

Gasoline is something, like coal, steel, lead, lumber, and mulch that real people take real risks and spend real money and work to extract, process, and deliver to the market and they have every right to ask whatever price they want for it. The price Wal-Mart charges for pillows is between Wal-Mart and me, not between Wal-Mart, the government, and me. Bottom line, government should not be involved.

Besides, if you want to look at real price gouging, consider that the federal government makes about twice as much on each gallon of gas as the gas stations do... and the same goes for state/local government. Taxes on a gallon of gas, when you add the taxes up, are around 40 cents a gallon. Depending on what state you're in, it might actually be a percentage of the sale price rather than a premium per gallon -- which is even more price gouging. So if we're going to talk about price gouging, we're going to have to take a good hard look at gasoline taxes.

If government wants to get involved, and I'm not saying it should, but I suppose its possible to make a national security issue out of it -- if it wants to get involved, it should encourage research into making ethanol production more efficient. Same with solar cells. And nuclear power. If there was a way to run Uranium all the way to lead, I think our problems would be solved. Otherwise, gas is going to cost what gas costs, and the market will have to adjust.

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