Several weeks ago, Bryan Caplan supported John McCain’s and Hillary Clinton’s advocacy of a gas-tax holiday not because it would work, but because politicians have to do something to appease public opinion. A tax holiday would be the most benign of a number of options.
[In the 1970s, during the last big energy crisis], doing something turned out to be a salad of populist nonsense: price controls, rationing, windfall profits taxes, arcane loopholes and lots of lawsuits.
He warned that although this would not solve anything, it may prevent politicians from doing far worse. Well, politicians are now talking far worse. This is twilight zone bad. Representative Maurice Hinchey, (D-NY) suggested yesterday that the American government take over national oil refineries. Why?
Then we can control how much gets out into the market.
Uh oh. If he thinks nationalization can solve the energy crisis, then someone needs to knock him on the head with a tack-hammer, teach him a little about pre-Thatcher Britain, France, Lyndon Johnson’s Great Society, the former USSR, and perhaps some introductory economics. Government, however, can help solve this problem — by repealing stifling regulations. Let the companies build new refineries. Let oil companies drill off-shore and in Alaska.
About that gas tax holiday… pass it quick before something worse happens!