scribblings by Paul Mison.



quote 20:23:05
“ America already taxes petrol far more lightly than other developed countries do. Short of cutting petrol taxes still further (John McCain and Hillary Clinton proposed a tax holiday during the 2008 race), or mounting an irresponsible raid on the strategic oil reserve for political purposes, [Obama] has no ready way to make petrol cheaper for the American voter. ”

Another snippet from Lexington’s Economist column on the President and the pump.

There’s actually a little irony there. When taxes make up a small part the cost of fuel, a 50% change in the price of crude will push up pump prices by roughly that amount. However, for Europeans (who typically see a large, but consistent, part of the price of a litre going to their governments), the same rises and falls are hidden under the flattening effect of that fixed price.

Personally, I’d love to see a flat price dictated by government, with the taxes shrinking when petrol is cheap, and rising when it’s cheap. Given the volatility in crude prices since 2005 or so, that would have done a nice job in making the economics of recovery far more stable. (Lexington says that oil prices might not hurt the President directly  ”unless they inflict much broader damage on the recovery”, but I’ve a suspicion that rising energy costs earlier in the recession helped stifle what ‘green shoots’ there were.)





notes (1)

  1. tominsam reblogged this from blech and added:
    I don’t know if this would still apply if the point of the policy was to maintain a consistent price. But it’s worth...
  2. blech posted this