It seems everywhere you turn someone is demanding the government do something to lower the price of gasoline and solve our “energy crisis”. Before joining the chorus we need to stop and apply some good old fashioned “horse sense” to the problem.
We do not have an energy crisis. We have a business crisis. Simply put, the problem is that oil companies are not able to supply enough oil to meet the demands of world markets. A seeming related problem is that the climate of the earth is warming. Both of these problems, the real and the imagined, require clear thinking on the part of the American people before we allow the government to do irreparable damage to our economy, the Constitution and our way of life.
The first question that must be answered is why the oil companies are not able to keep up with the demand for their products. It is not because there is a shortage of raw product. There are trillions of barrels of oil beneath the surface of the earth just waiting to be discovered and processed. It is not due to lack of capital. The oil companies are among the best financed companies on earth. It is not due to lack of labor. So long as there are millions of unemployed persons worldwide seeking a livelihood it cannot be claimed there is a shortage of labor.
The only reason there is a shortage of oil is because it is 100% under the control of the most inefficient mechanism ever devised by man, government. 95 percent of the world’s proven oil reserves are owned by a government. The remaining five percent, located in free-market countries, are heavily regulated by those governments and, in most cases, located under land or water owned or controlled by government.
When Congress returns to Washington, September 3, it will be under heavy pressure from the American public to “do something”. Most Americans have no idea what they want Congress to do other than make gasoline cheaper. The price of gasoline is an end result not a process. In order for the price to come down, oil companies have to produce enough product to meet the demand at a price consumers and businesses can afford.
Our problems are not due to government inaction. They are due to too much government action in the past. What we need is less involvement by government not more. Demanding that government do something without specifying what that something is, is like turning your teen age daughter loose at the mall with your credit card and permission to buy whatever she wants.
If we can’t drill our way out of the problem, we certainly cannot legislate our way our. Given a choice between the two, drilling is certainly more productive than legislating. Most of the solutions offered by our political leaders are nothing more than flights of fantasy though up during periods of daydreaming about what they would do if they were king. Only a small percentage of them are practical enough to ever be implemented. Those that may be implemented promise to do more harm than good.
The solutions offered by either party involve a major overhaul of our economy, our lifestyles and our relationship to government. Democrat plans would add trillions of dollars to the cost of government and give it almost total control of the major decisions we make in our lives, such as the type of car we drive, the type of home we live in and where that home is located. In Obama’s energy plan, for example, he promises to “build livable and sustainable communities”.
These communities would be designed to facilitate the use of alternative means of transportations, including bicycling and walking. He would have controls over building design to insure energy efficiency. He would also have controls on appliance manufacturing to insure our refrigerators, toasters, light bulbs, etc. were energy efficient.
To bring about these utopian communities he proposes billions of dollars of taxpayer money be directed to manufacturers, building supply firms and contractors for insulation, windows, heating plants, and other energy saving devices. One of his proposals is to “make a commitment to weatherize one million low-income homes” each year for the next ten years. Included in the plan is “upgrading a home’s furnace, sealing leaky ducts, fixing windows and adding insulation“.
Both parties have plans to force Americans to use less oil and more alternative energies. No doubt we would be better off if we did so. However, man is a stubborn creature and engaging in that human activity identified by Jefferson as “the pursuit of happiness” is an activity we prefer to engage in in our own way and at our own pace. Wind power and solar power has been around for decades. The reason it is not used more by the public is because it does not meet their needs for convenience and reliability.
The same thing can be said for energy efficient cars; remember the Yugo. Some readers may even be old enough to remember the Willys. Then there was the Isetta, a two passenger vehicle very similar to the “plug-ins” being made today except the Isetta had only one door. That door opened in front. If you parked at the curb and another car parked in front of you, you couldn’t get back into your car until the other car moved.
The point is there is nothing new in the proposals offered by government. Everything has already been tried and rejected by the consumer. Some will return in an improved form, and eventually will be accepted, when the public is ready, not when the government is ready. If we have learned anything from history, it is that when government attempts to manipulate the American consumer, the unintended consequences are always more negative than the problems government is attempting to solve.
There is no way the government could force the changes in American’s lifestyle they want without Herculean controls over almost every aspect of our lives. I can not believe a majority of the American people are ready to turn over to government the amount of control over their lives that would be required.
The most serious danger facing us in our current dilemma is an over reaction by government. Whenever government attempts to make major “forced” changes in one part of the economy the ripple effect has consequences for all its other parts as well. The ripple effect of plans currently being discussed would be a tsunami. For example, according to DOT figures Americans drove 12.5 billion fewer miles in June, 2008 than in June, 2007. That may mean a penny less per gallon when we fill up our gas tanks, but it plays havoc on the profits and jobs of those who depend on a motoring public for their livelihood.
The effects of mandated use of ethanol on our food supply and prices is another example, and there are many more. If left to its own devices, the market will eventually reach equilibrium between the various forms of energy available today. That is the way of nature and of markets. Government tinkering with either can only have disastrous effects in our lives.
That’s why the most fervent prayer by every American ought to be, “please give us a do-nothing Congress. Above all, please, do not allow them to saddle the American people with a ‘comprehensive’ energy plan.”
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