With the price of gasoline hovering between $2.70 and $2.95 per gallon, the politicians are in full cry, determined to show that they feel our collective pain.
Republican state Rep. Paul Kohls wants to suspend the state 20 cent-per-gallon gasoline tax for six months (which means it would end about one week after the next election). Meanwhile, Democrats in Congress have proposed suspending the 18 cent-per-gallon federal gasoline tax. Not to be outdone, Senate Majority Leader, Sen. Bill Frisk, R-Tenn., has proposed giving everyone a $100 rebate to help buy a tankful or two. And Minnesota gubernatorial candidate Steve Kelley, DFL-Hopkins, has proposed more laws against "price gouging" on gasoline sales. Who can be against that?
These elected officials all are making it clear that they want to lower the price of gasoline. Meanwhile, some so-called experts are saying what we really need to do is increase the price even more by increasing gas taxes. That, they think, will make people change their driving habits, dump their gas hogs and be more frugal in their lifestyles. Of course, they admit, that would be a major drag on the economy, but they tend to gloss over the part about throwing thousands of people out of work.
The fact is, it has taken us more than 50 years to create a society where the bulk of the population lives in mega-metropolises where many motorists have a daily one-way commute of 20 miles or more. Undoing those trends will take just as long, and will require every suburb to become not just a bedroom but a self-contained community again.
The biggest mistake the politicians can make is to send the price of gasoline artificially lurching in one direction or another. If overconsumption is an issue, why would one lower taxes to encourage more consumption? It is better to leave the taxes in place and to address some of the other causes of the growing global use of gasoline. Two things that the politicians could do to help, for example, would be to expand the incentives to grow the wind energy industry and to expedite the permitting process to build more nuclear power plants. These efforts would be used to replace those power plants that run on coal, oil or gas. If the fossil fuel plants are replaced, that will help lower demand for them, driving down the price at the pump.
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In 1981, when President Reagan deregulated the price of gasoline, many predictions were made that the price of gas would go immediately to $2 per gallon or more. (It was about $1.20 at the time.) Instead, market forces went to work, and the price of gas remained well under $2 for 25 years, even as inflation almost tripled the cost of everything else.
What makes the most sense is to allow these price signals from suppliers to set in motion the millions of individual decisions that will solve the problem. On the supply side, as the price goes up, it encourages more expensive drilling operations to reach secondary oil fields. On the demand side, it will encourage more motorists to swap their gas guzzler for a hybrid or to abandon their car altogether in favor of mass transit.
This Friday, the Duluth Transit Authority is holding a well-timed promotion, allowing bicycle riders to ride the buses for free. Each bus has a bike rack. Some Duluthians may find that a bike-and-ride commute will more than save the extra amount they have been spending on fuel. We encourage bicyclists to give it a try. It's those countless small decisions that will eventually help tip the cost of fuel downward.
