Head Scratching Economics

"[Senator Chuck] Schumer and most of his Democratic colleagues in the Senate—the very crowd shouting the loudest about 'obscene' gas prices—have voted uniformly for nearly 20 years against allowing most domestic oil production. They have vetoed opening even a tiny portion of the Arctic National Wildlife Refuge in Alaska to oil and gas production. If there is as much oil as the U.S. Geological Survey estimates, this would increase America's proven domestic oil reserves by about 50%. They have also voted against producing oil from the Outer Continental Shelf, where there are more supplies by some estimates than in Saudi Arabia... If [environmentalists have] discovered some new law of economics in which a fall in output with rising demand can cause a reduction in price, we'd love to hear it. The dirty little secret about oil politics is that today's high gas price is precisely the policy result that Mr. Schumer and other liberals have long desired. High prices have been the prod that the left has favored to persuade Americans to abandon their SUVs and minivans, use mass transit, turn the thermostat down, produce less consumer goods and services, and stop emitting those satanic greenhouse gases... So how do the sages on Capitol Hill propose to reduce gas prices? They want to slap a profits tax on Big Oil because of alleged price gouging. Here we have another head-scratcher that seems to defy even junior-high-school economics. Usually when you tax something, like tobacco, you get less of it. But somehow a tax on oil will magically lead to more oil."

—The Wall Street Journal