Miami Herald - August 31, 2005
"I'm tired of this nonsense with gas prices. We've got to let the free market decide what people might pay." -- State Rep. Irv Slosberg, Boca Raton Democrat, in The Herald Aug. 23.
Excellent idea. How does $10 a gallon sound? That's closer to what Americans are really paying for gas.
Thanks to a complicated web of subsidies to the petroleum industry, the price at the pump reflects as much economic reality as the price of bread once did in the Soviet Union.
We're guzzling gas in this country as if it were being given away for free because in a sense, we think it is.
UNBELIEVABLE PRICES
Imagine a new restaurant opening. Thanks to a cozy relationship with lawmakers, the owners work it out so that the land, construction costs and insurance are all paid for by taxes.
The restaurant opens with a star chef, a swank interior, and unbelievable prices. In fact, the main course is never more than $3!
Suddenly there's a run on Cuisses de Canard Confite. And before long, lawmakers are calling for a repeal of the duck tax.
Delicious, isn't it?
Chefs don't usually have the ear of kings. Otherwise our restaurant bears a close resemblance to the oil industry.
The federal government already grants the industry an estimated $2 billion a year in tax breaks alone.
The new energy bill that President Bush signed this month allows for another $4 billion in breaks to oil companies over the next decade, according to an analysis made by the Florida Public Interest Research Group.
And those are just direct subsidies. In a 1998 study, the advocacy group International Center for Technology Assessment estimated government subsidies to the oil industry at $125.6-to-$273.2 billion annually when things like security of the oil supply and the cost of pollution are taken into account.
Other estimates put the annual costs at closer to $700 billion.
BIGGER CARS
Given the implications for national security, you would think weaning Americans off oil would be the first priority of a responsible leadership.
Instead, politicians of every ideology continue to pander to a population hooked on gas.
In Florida, Rep. Slosberg wants to make it legal to sell gas below cost. ''The people I represent can't afford it,'' he told me. ``They don't need relief for the future. They need relief today.''
Meanwhile, the average fuel economy of new cars hasn't changed much since Ronald Reagan's time.
The Bush administration's tame new plan to make some SUVs slightly more efficient doesn't even include monsters like the Hummer H2.
That cars are getting bigger and bigger only reflects the drug-pusher economics behind our gas policy.
You can't blame the drivers any more than you can blame all those diners scrambling after the $3 gourmet experience.
MORE REALISTIC
In Europe, where gas prices can top $6 a gallon, the tax structure more closely reflects the true cost of gas. As a result, Europeans use far less fuel per capita than we do and enjoy many more alternatives to the car.
It may be too late for us in the United States, where we're happy to spend $3 a gallon on imported water, but not on gas.
Gasoline prices are already so entwined with the economy that any abrupt increase can lead to recession, and a catastrophe like Hurricane Katrina can lead to panic at the pumps.
In their book, The Elephant in the Bedroom, Stanley Hart and Alvin Spivak suggest raising the gas tax and lowering other taxes.
Here's another idea: Do away with protective subsidies to big oil and really let the free market decide the price of a gallon of gas.
It might encourage more mass transit.
And make that $21 seared scallop and foie gras appetizer at Azul seem eminently reasonable.
