Saturday, August 18, 2012

Driving Costs and Obama

I recently heard that gas prices are set to be the highest in history.

As this is an important issue, and an election year, let's look at Obama's policies and see if they have made driving more or less costly.

Cash for Clunkers was meant to help stimulate the economy.  Since French economist Frederic Bastiat gave us the "Broken Window Fallacy."  We knew before this plan was implemented that it would not work, and it has not improved the economy.

Did destroying functional cars make driving less expensive.  I would say, "no."  We destroyed functional cars and people who would have bought those cars were forced to pay more for more expensive cars, or no car at all.  The cheaper cars no longer existed.  If those people are buying the next level of cars, then the people who would have bought those more expensive cars had only fewer, and more expensive, options left.

The Keystone Pipeline would have brought more oil into America, or at least brought in in more cheaply.  In order to appease the environmentalists, this pipeline was stopped.  If we make it harder to import something, will that make it more or less expensive?

Offshore drilling was banned within a certain distance from the shore.  We wouldn't want a spill to affect the shoreline, would we?  If we require oil drilling in more difficult situations will that make oil more, or less, expensive?

President Obama banned all offshore drilling after the BP oil spill; does banning the "creating" of a product make it more, or less, expensive?  Some oil rigs pulled up and left permanently for countries that don't ban drilling on a whim.  Do you like sending more money to foreign countries?

Ethanol subsidies were implemented before Obama became president, but they have continued with him.  More corn demanded has meant higher corn prices.  Can you think of a food product that contains corn?  and whose price has gone up recently? (Corn syrup is used in place of sugar because there are large sugar tariffs preventing much importation of sugar, btw.)

At Eric Peters Autos, Eric often comment of the CAFE laws requiring higher gas mileage from new cars.  (Eric on the future of cars here.)  Higher gas mileage is good, but there are costs.  How would you like to trade your car for one that gets the required mpg?

CAFE Acceptable Car

Other cars are using smaller engines and not making other models.

Gas prices are high, did destroying cars help? Did preventing an oil delivery system reduce gas costs? Did banning drilling in shallow water prevent shoreline damage? Did banning all offshore drilling reduce gas costs? Does having taxpayers pay to put corn in their cars reduce gas (or food) prices?  Does requiring 35 mpg cars sound like fun?

Next time you fill your car up with 10% ethanol think of Obama.  Consider how he helped reduce your driving costs.

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