Market Rally

by Don Boudreaux on July 26, 2008

in Energy, Prices, Regulation

Here’s a letter that I sent yesterday to USA Today:

Concerned that oil is nonrenewable, Tim O’Neill wants government to “Rally the nation to find a way to reduce dependence on oil” (Letters, July 25).  This advice, alas, is at best redundant.  The market itself is “rallying the nation” on this front.  Oil’s higher price reliably inspires consumers to use less of it and, simultaneously, prompts entrepreneurs to search for alternatives.  And the higher this price rises, the stronger these inspirations become.

Any further “rallying” by government would not only be overkill, it would risk infecting a natural market process with the poison of politics.


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