With the price of oil approaching $100 per barrel, my brother-in-law traded in a small SUV for a large SUV. What was he thinking?
My brother-in-law is a college professor. Perhaps he should study the solutions to the high price of oil offered by a history professor from Penn State University in a recent Pittsburgh Post-Gazette editorial.
According to the Penn State professor, “There are … things that can be done to reduce prices; all require government action.” Fair warning to my brother-in-law: government action is often just a nice term for “government force.” Moreover, government action is often meant to limit human action or freedom.
In order to lower the price of oil, the Penn State professor suggests finding a diplomatic end to the war in Iraq, as well as using government action to raise taxes on gas guzzlers, providing tax breaks for the purchase of highly fuel-efficient vehicles (40 mpg or more), increasing fuel-efficiency standards, and providing $12 billion in government loans to the automobile industry.
If the professor were to have his way, he would use government force to make my brother-in-law pay higher taxes for purchasing a gas-guzzling vehicle. But wait, don’t we live in America? Isn’t this the country that stands for freedom? I recall some folks who were unhappy about heavy-handed taxes levied on tea.
Let’s move on to the professor’s next idea: the federal government should provide tax breaks for purchases of highly fuel-efficient vehicles. My brother-in-law’s vehicle gets a horrendous 15 miles per gallon. Thankfully, he only lives three miles from work. He burns four-tenths of a gallon of gas each day. If government action were to convince my brother-in-law to purchase a fuel-efficient vehicle he might choose to live near his aging mother 35 miles away from work. Many of his colleagues live in that same area. If he were to buy a 40 mpg vehicle and move, he would burn 1 3/4 gallons each day. He would increase his fuel consumption by 438 percent. Perhaps the government should increase taxes on fuel-efficient vehicles. Then, my brother-in-law’s colleagues might purchase gas hogs, move closer to campus and burn less fuel.
What about increasing fuel-efficiency standards? The professor cites a study demonstrating that if Congress were to force an increase in fuel efficiency to 35 mpg, motorists would save “$1,500 per year with gas at $3 per gallon.” But wait, won’t people just drive more? In an article about fuel-efficiency standards, Charli Coon, executive director of policy for the U.S. Chamber Institute for 21st Century Energy, said, “It’s an old phenomenon: Make something more efficient, and people use it more.”
The professor’s final idea is to make $12 billion in no-interest government loans available to the auto industry to build more efficient cars. Nice thought, but where does that money come from? You guessed it—your pocket. Do we need more corporate welfare? Besides, there’s already a mechanism in place to loan money to corporate America. It’s called the bond market.
So what should the government do about gas hogs like my brother-in-law? Should we the people restrict my brother-in-law’s economic freedom or promote his liberty and pursuit of happiness?
Limiting individual freedom is good in the case of restricting unreasonable force. It makes sense that my brother-in-law should not be free to point his gun at you and demand your money, but it makes little sense to limit his economic freedom. Government policies designed to lower the price of oil by limiting economic freedom will be expensive and do little or nothing to lower the cost of oil. In fact, such policies may have the opposite effect.
The logical conclusion is to leave my brother-in-law alone and demand that the U.S. Congress act American and promote freedom. For example, billions of barrels of domestic oil could be made accessible if unreasonable regulations were lifted from the energy industry. Increasing the supply of energy is the most efficient means of lowering the cost of energy. By opening a desolate and relatively tiny tract of the Arctic National Wildlife Refuge to drilling, Congress could make billions of barrels of oil available—the equivalent of 30 years of imports from Saudi Arabia. Double that amount if federally controlled waters were opened.
By giving more freedom to the energy industry and consumers, the supply of energy will increase and the cost will decrease. That would make my brother-in-law happy.