Gas Prices Go Up and President Obama Disavows the Law of Supply & Demand
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Mr. Obama Disagrees with a Basic and Time-Tested Tenet of Economic Physics
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Last week, President Obama used his weekly address to acknowledge the rising cost of gasoline.
He went on to take his wrath out on those who have suggestions to address the matter: Republicans. “We hear the same thing every year,” Mr. Obama said about the them. “Step one is drill, step two is drill, and step three is keep drilling.”
Well…uh…yes, Mr. President. That’s how it works. When supply runs low, and prices increase as a result of anemic supply, the answer to alleviate the price spike, as well as address unfilled consumer demand, is to create more of a supply.
And this law of economic physics is not something new, let alone contrived by a “vast right-wing conspiracy.” The power of supply and demand was understood to some extent by, amongst others, early Muslim economists, John Locke in his 1691 work Some Considerations on the Consequences of the Lowering of Interest and the Raising of the Value of Money, and Adam Smith in his 1776 book The Wealth of Nations.
It is also ironic that Mr. Obama, a former community organizer, does not appreciate the virtue of supply. After all, his mission as such was to increase the supply of people to the cause(s) he was espousing.
The President went on to say “Well, the American people aren’t stupid. It’s a bumper sticker. It’s not a strategy to solve our energy challenge. It’s a strategy to get politicians through an election.”
Perhaps there are politicians using the spike in gas prices for political gain. But by Mr. Obama’s logic, keeping the supply low, and prices high, is not only a bad strategy for the country but also one to not get politicians through an election.
-I.M. Windee
