Mar 6, 2005 — WASHINGTON (Reuters) - Energy prices are "way, way too high" and act as a headwind against growth, but the U.S. economy has so far powered through the higher costs, Treasury Secretary John Snow said on Sunday.
"These higher energy prices act like a tax on the economy. They are way, way too high," Snow said in an interview on ABC's "This Week With George Stephanopoulos."
It is amazing that a Treasury Secretary has so little clue about how the economy works. The market sets energy prices. The market is a collective manifestation of our desires. When we waste our precious resources, as the Bush Adminstration encourages, then the price of gas goes up. Bush's oil buddies get richer, but the society as a whole gets poorer.
Supply and demand drive the price of oil. It is not some secret hidden tax. Demand is the primary driving force in the current energy price increase. Since total oil reserves are fixed, Bush's push for accelerated production of oil only transfers wealth from our children to our SUVs. The only part of the equation that we can control is demand. Intelligent conservation translates directly into wealth. SUVs and Humvees translate directly into national poverty.
The price would go down if we could get people out of this insane notion that driving big SUVs is somehow patriotic. Each person using their resources wisely is patriotic. That is what makes the US strong. The delusion that going into debt for a big SUV or pickup weekens the finances of individual families and wastes resources. The SUVs are far less a patriotic option than those who chose to conserve.
The oil price jump shows that we live in a real world with a functioning market that reflects the choices we make. The natural response of a market to supply and out of control demand is not a tax. One could make an argument that the subsidized accelerated develop of oil resources in the US is a future tax that Bush is placing on the children of this nation, the current peaks and valleys in the market are just the way that markets behave.
Leadership would involve a president crawling out of the pockets of the oil barrons and encouraging people to conserve. Instead, Bush will make the case that we have to take oil reserves from our children and use them today so that we can drive big cars. This is nonleadership.