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Next Up: European Truckers Angry About Night, Gravity

Jun 11, 2008
By .
Politics & Current Events

European truckers and other frequent drivers are protesting high fuel prices. Various government luminaries are proposing a McCain/Clinton style repeal of gas taxes, which in the red-tape-intensive Europe would require the sign-off of the entire freaking EU, a task that would be described as Herculean if Hercules were a bureaucratic wonk.

Yet it's not clear what truckers are hoping to accomplish by cursing the darkness. Even in Europe, the government is not price-fixing gasoline. Market forces largely out of the government's control, and evidently out of its comprehension, are fixing gasoline prices. As was discussed here in America earlier during the Obama/Clinton smackdown, cutting the taxes is a Hello Kitty bandaid on an arterial gusher. What's worse, you're going to drop the price an insignificant fraction, encourage people to drive significantly more because of irrational human behavior, and thereby drive up demand and drive up the prices even higher. That's stupid. Unfortunately, many politicians would rather do a stupid, stupid thing than admit that government is at best powerless and at worst actively harmful when it addresses some economic forces. If they admitted that, people might have less faith in the government, and therefore less faith in them. Prestige would dwindle. Power would wane. Politics would cease to be even show business for ugly people; it would be merely ugly people for ugly people. Who wants that?

Not John McCain, at least. He's back to calling for a gas tax holiday. At least he hasn't yet stooped to the Clintonian levels of sneering at economists.

Last 5 posts by Ken White

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2 Comments

  1. PLW  •  Jun 11, 2008 @7:16 am

    "What’s worse, you’re going to drop the price an insignificant fraction, encourage people to drive significantly more because of irrational human behavior, and thereby drive up demand and drive up the prices even higher."

    You mean "rational human behavior", right? I mean, if something is cheaper, of course I consume more of it. As for the final price and quantity consumed, both will certainly be higher, but the price+tax would be lower (probably… it gets complicated with the monopolisitic supplier)

  2. Ken  •  Jun 11, 2008 @8:12 am

    Well, no, not exactly. By irrational behavior I refer to the tendency to exaggerate the impact of discounts. The problem is that the removal of a sales tax that amounts to less than 5% of the cost of gas will tend to drive more than 5% more increasing driving because of the human tendency to treat discounts irrationally. It's the same tendency that makes sales effective and makes prices always expressed as $4.99 rather than $5.00.