Friday, May 11, 2007

Gasoline Prices and Minimum Wages

In the past I have blogged about the energy policy I think the USA should focus on namely -- USE AS MUCH GASOLINE AS YOUR POSSIBLY CAN. Driving the price per gallon of gasoline to levels like $10 or $15 would provide the market incentives for entrepreneurs to invent and bring to market a range of non-petroleum alternatives -- pricing is everything when it comes to energy.

Do I sound crazy or do I simply understand the first law of economics -- supply and demand -- well enough to save the planet? Ah, our eternal masters - supply and demand - if people demand more of something prices go up accordingly and vice versa. A basic concept that the US Congress does not seem to understand consistently.

As evidence let me highlight the May 8th press conference hosted by Speaker of the US House of Representatives Nancy Pelosi. The photograph I saw in the newspaper story about this press conference showed Speaker/Grandmother Pelosi standing next to a billboard. This billboard depicted gasoline prices in 2001 -- at US$1.47 per gallon which was symbolized with a BLUE gas pump -- and in 2007/today -- at US$3.05 per gallon which was symbolized with a RED gas pump.

Blue and Red? Was this a subliminal message by Speaker Pelosi that "blue state voter world" is good and "red state voter world" is bad since us red state conservatives need to drive Mother Earth-killing SUVs so we have enough room for several shot guns on our gun rack?? If I am wrong then Speaker Pelosi has my apology (and sadly my tax burden) in her hands once she prints this blog posting off for a hard copy ;-)

The other odd thing about Speaker Pelosi's messaging is that she is trying to have the "price of gasoline" issue both ways:

  1. She is blaming "Big Oil" greed and the White House for high gasoline prices which she wants to lower apparently.
  2. She also wants to save Mother Earth from global warming caused by my SUV (and her private jet flights from DC to her San Francisco district -- thus her "carbon footprint" is bigger than mine) so shouldn't Speaker Pelosi be calling for much higher gasoline prices? Perhaps we could mandate that the federal minimum wage should be equal to the price for a gallon of gasoline? That way every time Congress raises the minimum wage the per gallon price of gasoline would match it. Using this model would give us a per gallon gasoline price of $7.25 to match the wage level the House under Speaker Pelosi's leadership approved.

What a great deal for everyone in the USA -- poor people get paid more and Mother Earth is saved from the evils of gasoline. So what do you think Grandma Pelosi?


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