The editorial explains the bad economics of artificially holding down gas (or any commodity) prices in a clear manner. That the R T has published an editorial that is clearly written, with a conservative position on the economics of the proposal is remarkable enough in it's own right. But the striking thing to me is the clear bias it shows against the Republican Party in Virginia.
The disaster-induced disruption in the gasoline supply drives up prices, and the higher prices pare demand to the bare essentials and avert shortages.
If state lawmakers intervene to hold down prices artificially, they will encourage consumption and discourage needed changes in consumer behavior.
Or perhaps the theory holds only in off election years.
If Cline's proposal is not good economics, it's probably good politics. Everyone's feeling the impact of higher gas prices -- though not everyone feels the same pain.
Now, I'm not an economist. I'm an engineer, therefore I do think logically. For example, I have to use boolean logic evry day. (If this happens, then that must happen.) This RT editorial is probably the most logical I have seen in ages. In order to continue in a logical vein, one must ask, where does the Roanoke Times stand on an equally dumb campaign speech Lt. Gov. Kaine made in Vinton on Sept. 2? This page from Tim Kaine's campaign website, reposts the entire Roanoke Times article, (which I don't think is available in a free form on the Roanoke Times website after 7 days).
Roanoke Times, September 2, 2005
By Todd Jackson and Michael Sluss
Democratic candidate for governor Tim Kaine today called on all public officials — state, federal and local — to put pressue on the oil companies to freeze their prices, at least until the current hurricane-induced crisis fades.
The economic impact of the two proposals is indistinguishable. If anything, Kaine’s proposal may even be worse, calling as it does for local and Federal intervention in addition to State. Yet, in typical Roanoke Times fashion, the Republican proposal is the one they chose to editorialize against.