“It’s far past time to rein in Big Oil’s outrageous price gouging,” UC Berkeley professor (and Clinton Labor Secretary) Robert Reich recently opined. “It’s time for a windfall profits tax.”
A group of Democratic Senators agree, having introduced the Big Oil Windfall Profits Tax Act of 2022 to “impose a windfall profits excise tax on crude oil and to rebate the tax collected back to individual taxpayers, and for other purposes.” President Biden, too, has warned that “we will not tolerate … profiteering or price gouging.”
Where have we heard this before? At the top of every oil-price cycle—never at the bottom.
Fourteen years ago, the same rhetoric was in play during a spell of high gasoline prices. An IER press release in June 2008, “Price Gouging Again? Seriously?” quoted Tom Pyle:
Price gouging proposals get attention in Washington because they help politicians assign blame to political bogeymen, but they do not lower the price at the pump for consumers and could lead to fuel shortages, especially in times of emergency…. Today’s gasoline prices reflect record global demand for crude oil…. If the consumer is getting gouged, it’s by their own government.
Back to the present. The bad news is that petroleum prices are historically high. But the good news is that gasoline and diesel are easily accessible. So, it is easy to get in-and-out of service stations without wasting time—or fuel in idle mode.
If the federal government wants to jawbone or legislate prices below their natural levels, be sure to bring an iPad or book to endure the queue. If you want to stay cool, have enough fuel in the tank. And prepare to do it again at a half tank (like most everyone else) because of the fear of becoming stranded.
As Pyle stated above, the government needs to investigate itself for a raft of public policies designed to keep oil in the ground, not flowing as refined product to motorists and other petroleum consumers. That list of policies is long, and it began with a Biden promise on the campaign trail:
I want you to look into my eyes. I guarantee you; I guarantee you, we are going to end fossil fuel, and I am not going to cooperate with them.
That has been a promise kept. As chronicled by the Republican Study Committee, dozens of executive actions, starting with the cancellation of the Keystone XL pipeline permit on Day One and continuing today with regular climate-related edicts, are anti-energy for drivers and households otherwise.
The cure for high prices is high prices and less government. The market will take care of the rest.