It seems like every day people complain about "record gas prices" and how "Big Oil" is gouging the customer to increase the size of their "huge" profit margin. And inevitably, like everything else, this is somehow George Bush's fault.
The question is: What is there really to complain about? In fact, as a whole, we should celebrate higher fuel costs.
Certainly this seems counter-intuitive, but before delving into why $6-a-gallon gasoline is a good thing, it would be wise to dispel some pervasive myths about our current fuel market.
For starters, gas prices are simply not at record highs. Numerous news reports regarding this issue over the past few years have made this claim, but have failed to adjust for inflation. Not surprisingly though, the moment it appeared that real gas prices had in fact exceeded the 1981 record, news agencies such as CNN were eager to sensationalize. On May 21, CNN reported, "Gas now at highest level, even adjusted for inflation."
This report was immediately parroted over at www.democrats.org, where the "grilling" of Big Oil by Democrats on the House Judiciary Committee was portrayed as a small victory for the common man, rather than what it really was - a politically motivated measure to exert undue pressure on private business and expand government interference in the market.
As they often are, the news-as-entertainment outlets were wrong. CNN relied on 2006 dollars, rather than 2007 dollars, in order to make the claim. Where are CNN's bold home-page splashes reporting, "Gas now seven cents below highest level, when actually adjusted for inflation"?
When fuel prices are dissected even further, another interesting feature appears. Federal and state taxes account for roughly 40 cents per gallon. In fact, some states, such as Wisconsin, have even ordered gas station owners to increase their prices or face penalties for violating "unfair sales" laws.
Oil companies, on the other hand, profit about 13 cents per gallon.
How come the House Judiciary Committee didn't grill "Big Government" over their price gouging?
Instead, Democratic leaders such as Sen. Clinton rail against the record profits of companies like Exxon-Mobil and make startling and revolutionary statements advocating that the government should "take those profits." Where were all the CNN articles reporting, "Clinton proposes oil nationalization?"
God forbid that an industry that scraped by through the 1980s and 1990s and invested billions more than it made into infrastructure should be allowed to recoup those investments without being accused of criminal malfeasance.
Maybe one day the House Judiciary Committee will grill Apple Inc. and Fiat for those shocking profit margins and high prices on the iPod and the Ferrari Enzo.
Gasoline is a luxury, and this is why higher gas prices are a good thing. Luxury items should be priced in such a manner that consumers are not prone to waste. When gas prices fell below $1 in the 1990s, people polluted the roads with SUVs and Hummers. Alternative fuel research was simply not a viable area of study.
Higher fuel costs will result in more robust alternative energy research and implementation, something that everyone, from President Bush to Sen. Obama, agrees is important.
The use of alternative energy will not only reduce our reliance on Canadian and Mexican oil (less than 20 percent of our oil is imported from the Middle East), but will diminish overall fossil fuel consumption. Prohibitive gas prices will increase the use of mass transit, reducing highway congestion. Americans might even learn to walk again.
Less fossil fuel means less air and water pollution. Clean skies, lakes and oceans mean healthier people (and animals). Healthier people would lead to a reduced demand on our health-care system. Reduced demand results in lower medical costs. Lower medical costs yield an increase in disposable income.
As many Democrats such as Al Gore have been saying for some time, the benefits of clean fuels are long-term and far-reaching. So rather than relying on partisan maneuvering that demonizes Big Oil and portrays the president as their evil lackey, Democrats would better serve the American public by letting oil companies price their product according to market demands and supporting policies that they essentially agree with, even if that means backing Bush's energy initiative.
Puri is a psychology, history, government and Middle Eastern studies senior.
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