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Unlike the editors of the NYTimes editorial page who think that high prices and profits have no redeeming social value [2], their counterparts at the Washington Post [3] (rr) nail the economics:
When oil prices spike, it is because of scarcity — for example,
scarcity caused by hurricane damage to petroleum infrastructure on the
Gulf Coast. The best way to manage that scarcity is for producers to
make a special effort to get oil to the market and for consumers to
make a special effort to cut back. Higher prices encourage both of
those responses; rather than complain of price gouging, Congress should
celebrate price signals. By contrast, controlled prices create no
pressure for extra production or conservation. They just create gas
lines: Witness the 1970s.A tax on windfall profits is less counterproductive but still bad. For
one thing, it’s not as though the profits are socially useless. Even in
the absence of a special tax, they generate regular tax revenue for
both federal and state governments as well as dividends for retirement
plans. For another, the profits are a spur to new investment; taxing
them reduces the return that companies will expect to make on new oil
finds or refineries, with the result that there will be less oil and
gas available in the future and hence higher prices.
The title of the editorial is the lovely, "A Call to Inaction."