Hawaiian Pride and Political Folly
Yesterday, West O'ahu (a team from 'Ewa Beach, where some of my relatives still reside) won the Little League World Series in dramatic fashion.
Not to be outdone by na keiki on the drama front, the political powers in the Aloha State are going full steam ahead with price controls on wholesale gasoline. That this economic nonsense is happening under the supervision of a Republican governor makes this occurrence even more bizarre. During the California recall election, Lt. Gov. Cruz Bustamante called for price controls on gasoline. He was roundly lambasted for the idea -- including a scathing editorial by The Sacramento Bee and a column by Bruce Bartlett, who hits the nail on the head:
What is also hardly unmentioned is the ongoing global cartel in oil. The secret to lower gasoline prices? A genuinely competitive global market. The chances of that happening? Roughly the same as that of a snowball in the Arabian desert.
For the record, state and local gasoline taxes in Hawai’i are at minimum 28 cents per gallon plus a 4% excise tax, according to the American Petroleum Institute. Overall, taxation of gasoline comprises anywhere between one-quarter to one-third of the final pump price nationally, depending on the county of purchase. The underlying price of crude still makes up the bulk of the cost.
If politicians were really intent on providing direct and immediate relief to consumers they should look to a tax holiday instead of implementing policies that will inevitably lead to artificial scarcities. Why do that, though, when the costs can be borne by someone else?
To steal an observation from William F. Buckley, perhaps it would be better if the people of Hawai’i were governed by Little Leaguers instead of third-rate politicians who foolishly seek to redefine supply and demand.
Not to be outdone by na keiki on the drama front, the political powers in the Aloha State are going full steam ahead with price controls on wholesale gasoline. That this economic nonsense is happening under the supervision of a Republican governor makes this occurrence even more bizarre. During the California recall election, Lt. Gov. Cruz Bustamante called for price controls on gasoline. He was roundly lambasted for the idea -- including a scathing editorial by The Sacramento Bee and a column by Bruce Bartlett, who hits the nail on the head:
The main reason why gasoline prices rise and fall is because of fluctuations in the world price of oil, which oil companies have little control over since they import most of it from places like Saudi Arabia.For anyone who's been paying attention to global affairs recently -- and having grown up in Hawai’i, I know that even keeping up with events on the mainland is a stretch -- economic growth in India and China are fueling the rise in oil prices.
What is also hardly unmentioned is the ongoing global cartel in oil. The secret to lower gasoline prices? A genuinely competitive global market. The chances of that happening? Roughly the same as that of a snowball in the Arabian desert.
For the record, state and local gasoline taxes in Hawai’i are at minimum 28 cents per gallon plus a 4% excise tax, according to the American Petroleum Institute. Overall, taxation of gasoline comprises anywhere between one-quarter to one-third of the final pump price nationally, depending on the county of purchase. The underlying price of crude still makes up the bulk of the cost.
If politicians were really intent on providing direct and immediate relief to consumers they should look to a tax holiday instead of implementing policies that will inevitably lead to artificial scarcities. Why do that, though, when the costs can be borne by someone else?
To steal an observation from William F. Buckley, perhaps it would be better if the people of Hawai’i were governed by Little Leaguers instead of third-rate politicians who foolishly seek to redefine supply and demand.
posted by ronpaulpoets @ 8/29/2005
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