Gasaholic Communists

There's a lot of angst in the air, and much hand wringing in Congress, regarding the current price of gasoline. There should be. Gasoline is way too cheap.

What am I, one of those social-engineering, green-minded, soft-headed knee jerk liberals who wants to foster a utopia where everyone would commute to work by bicycle and the only place to find an SUV would be a museum?

Not at all. I'm just a plain old, market-oriented conservative -- a dying breed, it's true, and so a quaint way to picture oneself, but that's what I am. I trust markets to set prices and don't trust governments when they interfere. All I want, really, is for the price of gasoline to reflect its true cost. To let the market work.

"What do you mean, its true cost?" you're saying. "Between federal and state taxes, there's already an average of a 59 cent surcharge on every gallon of gas we buy at the pump. Doesn't that mean the price of gasoline is already higher than its true cost?"

No. The true price of a gallon of gasoline is whatever it costs the nation to secure it. How much of the size and scope of our military is devoted to securing access to foreign oil? How often do we in fact have to wage war to secure that access? After all, while there were doubtless many reasons for the first and the current gulf war, it's impossible to imagine either of them if Iraq didn't have the world's second largest oil reserves.

Our use of oil, which involves the transfer of hundreds of billions of US dollars to regimes like those running Iran, Russia, Saudi Arabia, and Venezuela, strengthens these anti-democratic regimes and finances their foreign agendas. What does that cost us?

Add these and other costs up, subject them to rational economic analysis, and you'll have the true cost of a gallon of gasoline. The difference between the true cost and the current price can be closed with a tax. Anything less than a full tax is simply a hidden subsidy. And as a good, market-focused conservative, I don't want the government to be in the business of subsidizing commodities.

And I know you don't, either. We're all Americans, after all; we know how silly it is when communist regimes like China and North Korea subsidize rice, or when the Soviets used to create those terrible Moscow queues by subsidizing bread. We're smarter than that and wouldn't want to dabble with that sort of communist market interference here.

Except... maybe we would. How long does an American politician last after suggesting that road access be priced higher during rush hour? Only until the next election, typically. But roads are in higher demand during rush hour. If the price of access is the same when the demand is higher, you'll get... why, you'll get queuing. Of course, we prefer to call road queuing "traffic jams." It helps obscure the real cause of the problem: rush hour road access is artificially cheap.

But everybody needs access to roads! And everybody has to buy gasoline! If it were more expensive, only the rich could afford it!

Well, that sounds like the definition of a market economy to me. After all, what could be more natural -- and desirable -- than items in higher demand commanding higher prices? If you think there should be exceptions to this rule, I hope you'll have a little sympathy for those Chinese peasants. They can as reasonably claim to need to eat as we claim to need to drive. Why are subsidies and artificially low prices communist claptrap for them, and a fundamental right for us? What is it about roads, cars, and driving that perverts our principles and sullies our common sense?

It's an odd thing. The same pundits and politicians who insist that medical marijuana be prohibited across the board because ordinary people might want a toke, too, simultaneously insist not only that Americans should be able to drive whatever fuel-inefficient vehicles they want, but that the government should subsidize their ability to do so. Why do we focus only on the potential costs of the first, and only on the public's appetites for the second? If we had to diagnose politics like these, we might call them... schizophrenic.

Still not convinced that something's wrong here? Try this: when it comes to cars, we're so neurotic that our favored means of creating fuel economy is by having Congress ordain it, in the form of Corporate Average Fuel Economy (CAFE) standards. This is classic, Soviet-style, command economy stuff, yet when it comes to cars we embrace the practice as though it's Adam Smith himself. Congress ordering fuel efficiency, rather than permitting the market to create demand for it? It's worse than embarrassing. It's un-American.

President Bush made headlines in his January State of the Union address when he described America as "addicted to oil." He was right about the addiction, but wrong about the source. We're not addicted to oil. We're addicted to subsidized oil. And the way to cure our addiction isn't through "technology," as the president suggested with Dr. Feelgood sincerity and a magician's sleight of hand, but simply by ending those insidious, hidden subsidies and letting the market work the magic we Americans know it will.