Economic naiveté in Frankfort could worsen pain at the pump
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I have some advice for Kentuckians upset about high gas prices: Quit calling the state Attorney General’s Office to “report” the latest perceived mischief on the part of those greedy oil companies and their convenience-store cohorts.
It’s not going to relieve your pain at the pump. In the long run, it could make things worse.
Some Kentuckians – angry that the price of gasoline recently spiked overnight in Louisville – contacted state officials demanding action.
So the action came, sort of.
Expressing his “outrage by the voracious practices of price gouging we are seeing,” Gov. Steve Beshear signed an executive order declaring a “state of emergency to prevent price gouging in the commonwealth.”
His “order” was requested by Attorney General Jack Conway, who wrote in a letter to Beshear that “it remains unclear whether the price spike in gasoline and other fuels was wholly caused by legitimate economic market-based factors.”
So, if it remains “unclear” as to whether drivers get shafted at the pump, what exactly prompted Beshear’s “outrage?” The attorney general doesn’t even know whether high gas prices reflect economic factors or greedy sellers.
If the governor wants to take meaningful action, he should call a press conference and give Kentuckians a lesson in Economics 101.
To assist him, I offer the governor the following press release, which, if nothing else, may contribute in some small way to reducing the turnover of overpaid communications directors in the Governor’s Office:
“My fellow Kentuckians, when you have to spend $100 to fill up your vehicle just to get to work and meet your family’s obligations, it’s a clear sign that we must act as a nation and as a commonwealth. Therefore, we in state government are going implement a two-pronged solution to this crisis:
“First, we need to conserve. I just realized that I’ve been so focused on my ‘outrage’ at (possibly) greedy oil companies that I forgot to tell you that if you use less gas, you spend less money. I don’t pay for most of mine, so it slipped my mind.”
“High gas prices indicate scarce supply. So, if we know a hurricane might strike next week, which may lead to a scarcity, that’s a good reason to conserve today. Combine trips to the grocery and work. Ride your bike. Carpool. Walk. You can make a difference.
“You see, that’s a much better approach than well-cared-for politicians in Frankfort mandating prices. With supplies tightening, government-mandated price caps would just offer less incentive to conserve.
“Second, we must encourage more domestic oil production. These wacky ‘envirocrats,’ who remain adamantly opposed to drilling for more oil, don’t seem to understand the pain suffered by you living in the real world.
“Well, I feel your pain. I understand: Higher prices offer a clear signal we need more fuel.
“So, I issue this executive order: I demand the federal government take every possible step – including reasonable tax breaks – to encourage more drilling and development of resources in ways that lower prices for fuel for you right now.
“Some of you want government to cap prices charged at the corner gas station. I understand the frustration leading to that idea. But doing so would hurt this great commonwealth in the long run. Many suppliers would avoid doing business here. Plus, it smacks of something inherently un-American: government telling private industry what it can charge for products.
“Some of you may remember the disastrous Kentucky Kare policy of the 1990s. Government tried to mandate how health-care providers met patient needs. Dozens of providers left the state. Health-care premiums increased. Providers covered fewer ailments.
“Does that sound healthy to you?”
I hope the governor utilizes my free services.
And remember: You saw it here first.