N. William Clayton's Blog
Friday, 26 March 2010
Obama's Treatment of the Israeli Prime Minister

Barack Hussein Obama seems perfectly comfortable with the idea of a nuclear-armed Iran, but he gets his panties all bunched up because the Israelis are building a few apartments in East Jerusalem. 

 

Which of the following scenarios poses a bigger threat to our national security?

 

(a) The Israelis build a few new apartments in East Jerusalem for Jews to live in.

 

(b) Iran produces a few nuclear weapons and gives one or two of them to a terrorist group. The terrorists smuggle the weapons into the U.S. and detonate them.

 

Our staunchest and most capable ally in opposing Iranian nuclear-weapons development at the moment is Israel. Obama's disgusting treatment of the Israeli Prime Minster left even me gaping in astonishment. Can you imagine Franklin D. Roosevelt snubbing Winston Churchill in this way during one of their conferences at the height of World War II?

 

Although we're not in a world war at the moment, the current situation may actually be more dangerous for the United States than WWII was. In WWII, there was never any possibility that the enemy would destroy our cities or kill significant numbers of American civilians. The Japanese did attack military installations in Hawaii on Dec. 7, 1941 (killing fewer Americans than were killed by Muslim terrorists on 9/11), and they managed to hold a couple of remote Alaskan islands for a brief period, and they killed one person with a balloon bomb. The Germans, though able to sink ships just off the eastern seaboard by means of U-boat attacks, never did any damage on U.S. soil that I'm aware of. And, of course, neither the Japanese nor the Germans came anywhere close to developing an atomic bomb (though we didn't know this at the time). So, throughout WWII, the U.S. mainland remained a safe haven, lying beyond the reach of enemy firepower.

 

But a couple of basic uranium fission bombs (which is what Iran appears to be striving for) could kill tens of thousands of Americans in a few seconds.

 


Posted by N. William Clayton at 9:23 PM MDT
Sunday, 14 March 2010
The Slaughter Solution

Since last week, there’ve been several procedural developments in the Obama/Pelosi/Reid triumvirate’s quest for nationalized healthcare. The Democrats’ current game plan appears to be this:

 

The House, despite its large Democratic majority, is extremely unlikely to pass the Senate healthcare bill that passed the latter body on Christmas Eve. The Senate bill includes Gator-Aid, the Cornhusker Kickback, the Louisiana Purchase, the Conn Job, a 40% tax on “Cadillac” health-insurance plans (except for plans held by union members), federal funding for abortions, and other stuff that’s not in the House bill that passed last fall. 

 

Pelosi and Reid claim to have come up with a new healthcare bill that would amend the Senate bill in order to change the Senate bill to make it palatable for the House. They claim that the amending bill will have enough support to pass the House. They also claim it will have enough votes to pass the Senate using the budget reconciliation procedure, which requires only a simply majority vote (with the Vice President providing the 51st vote in the event of a tie). The use of the budget reconciliation process for Obamacare is highly questionable, with Sen. Robert Byrd (D-WV), the Senate’s leading authority on such matters, declaring that reconciliation is not appropriate in this case.  Reconciliation is intended for the purpose of passing fiscal amendments to existing law, not for jamming through massive bills. But most of the Democrats don’t seem to care. So we’ll assume, purely for the sake of argument here, that reconciliation is kosher even though it isn’t.

 

For the amending bill to pass via the reconciliation process, the House would first have to pass the Senate bill. Once the House passes the Senate Bill, Obama can sign it immediately and it will be the law of the land. The House could then pass the amending bill. But the amending bill would still require passage in the Senate, followed by the President’s signature. The catch-22 here is that there’s no guarantee that the Senate will even vote on the amending bill once the President has signed the Senate bill into law. So the House just has to trust the Senate.

 

Apparently, a lot of Democrats in the House don’t trust the Senate all that much. As of a week ago, the gridlock appeared insurmountable. I found myself once again praising the Founding Fathers for having designed gridlock into the system.

 

Then, a few days ago, Rep. Louise Slaughter (chairwoman of the House Rules Committee) invented a very clever workaround, called “the Slaughter Solution”. Rep. Slaughter proposes to have the House vote to enact a rule declaring that if the House passes the amending bill, the Senate bill will automatically be “deemed” to have passed the House without a vote having actually been taken in the House on the Senate bill. Please reread that sentence. The amending bill would then go to the Senate for its approval under the reconciliation procedure. Then both bills would be sent to the President for his signature.

 

There are a couple of potential snags here. One snag is an obscure and little-read document called the Constitution of the United States of America. Article I Section 7 clearly outlines the steps through which a bill must go before it becomes law. One of these steps is that the bill must pass the House of Representatives by a majority vote. If a bill doesn’t pass the House by a majority vote, it can’t become law. Period.

 

The proposed Slaughter Solution simply skips the step of having the House vote on the Senate bill. The House will take two votes. The first vote will be to pass a rule (not a bill, but a rule) that simply says that the Senate bill will be deemed to have passed the House if the House passes the amending bill. The second vote will be a vote on the amending bill. But, under the Slaughter Solution, the House won’t vote on the Senate bill itself. There’s nothing in the Constitution that authorizes the House to “deem” a bill to have passed. For a bill to pass the House, an actual vote must be taken on the bill.

 

So the Slaughter Solution would appear to be a direct violation of Article I Section 7. One might even say that the Slaughter Solution slaughters the Constitution. But this is a minor snag, given that congressmen, senators, and presidents from both parties routinely ignore the Constitution. 

 

The second snag, which may be slightly harder for politicians to ignore, is that the Senate Parliamentarian (who is not a senator) has issued a verbal opinion that the Senate cannot vote on the amending bill until the Senate bill has been passed fair-and-square in the House and has been signed by the President.

 

But that’s not necessarily a show-stopper. The parliamentarian may have a brother who’d like to be a federal judge. After all, President Obama nominated my own Democratic congressman’s brother for a federal judgeship recently, on the same day that my congressman switched his position on Obamacare from “no” to “maybe”.

 

But what if the Parliamentarian can’t be bought? Well, the Democrats have yet another option. The Vice President of the United States, who by constitutional definition is also the President of the Senate, can step in and overrule the Senate Parliamentarian. So, as with the Constitution, the ruling by the Senate Parliamentarian may turn out to be just a minor speed bump.

 

If the Slaughter Solution doesn’t sound sufficiently surreal, there’s more:

 

Nancy Pelosi has indicated that the crucial votes in the House (the vote on the Slaughter Solution and the vote on the amending bill) will take place this week. But nobody has seen the text of the amending bill yet! Not only has the general public not seen the text of the bill; members of Congress haven’t seen it.

 

But that’s not a problem, either. In a recent speech, Pelosi said the following about the final healthcare bill (which will consist of the Senate bill as modified by the as-yet-unseen amending bill): “...We have to pass the bill so that you can find out what is in it....” You don’t believe that the Speaker of the House would say something like this? The full text of the speech is on her official website, with the relevant sentence occurring about five or six paragraphs before the end.

 

Link: http://www.speaker.gov/newsroom/pressrel...

 

In essence, Pelosi is proposing to have the House of Representatives "deem" an unknown multi-trillion-dollar multi-thousand-page bill into law so that we, the people, can find out what's in the bill.

 

Are ya'll cool with that?

 


Posted by N. William Clayton at 3:48 PM MST
Updated: Sunday, 14 March 2010 3:52 PM MST
Monday, 1 March 2010
The System Works!

The debate over Obamacare has led me to reflect on one of the less-appreciated aspects of the U.S. Constitution: the way in which that marvelous document was designed to foster political disunity, partisan fighting, and legislative gridlock.  Of course, the Constitution makes no mention of political parties per se.  But multiple factions existed at the time of the Constitutional Convention (primarily the Federalists and the Anti-Federalists), and the Framers knew that such divisions are natural in a free society and that, if channelled properly, they can serve as a bulwark against tyranny.

 

As a conservative, I think that bipartisanship is highly overrated.  I'm glad that President Barack Hussein Obama continues (in practice if not in rhetoric) to eschew bipartisanship and embrace hard-core partisanship.  Partisanship is good, because it encourages both sides to present their points of view and duke it out for all to see.  Of course, a bias toward compromise is built into the American political system, and that's a good thing.  But I think the Founding Fathers probably intended compromise to be the final phase of the legislative process, coming at the end of a bare-knuckle political brawl rather than being the first course of action.  In other words, bipartisan compromise should ideally occur in cases where both parties have exhausted themselves fighting for their respective ideas with neither side having won enough votes to realize its vision. 

 

Furthermore, the Framers designed gridlock into the system to ensure that the majority of such brawls end in stalemate even after compromise has been attempted, causing most legislation to simply die.  They deliberately made it hard to enact sudden sweeping changes in federal law.  Not impossible, but hard.

 

That's why I detest politicians who preach about the need for “broad-based bipartisan unity” as if it were some sort of nirvana lying just over the horizon.  Such unity can be dangerous.  The Constitution was designed to discourage unity by pitting various interests, factions, and governing entities against each other in multiple political dimensions (see “gridlock” above).  The notion that politicians from both parties should preemptively set aside their ideological differences and hold hands and sing Kumbaya (a vision actively promoted by Obama during his 2008 campaign) is simply un-American, except perhaps in national emergencies such as World War II or the immediate aftermath of 9/11 (in which case a war chant is probably more appropriate).  

 

By the same token, I detest politicians who believe that passing big complicated bipartisan legislation is in and of itself a worthy cause.  John McCain, for example, loves to co-sponsor gargantuan bills with Democrats, perhaps because he views bipartisan compromise as an end in itself rather than something that should be reserved as a last resort.  Or perhaps he simply loves to have his name attached to massive legislation as a kind of monument to himself.  McCain does most of his compromising right up front during the drafting process, preemptively giving Democrats 95% of what they want before the bill even sees the inside of a congressional committee chamber.  

 

I prefer a politician with a clearly defined one-sided ideological agenda in which he sincerely believes, who fights like a pit bull for that agenda and tries to sell it to the voters even if it’s not popular at the time, and who compromises only after all other avenues have been exhausted.  Then, when he does compromise, he gives away as little as possible.  Ronald Reagan was actually quite good at this.  So are President Obama [1] and House Speaker Nancy Pelosi.  Rep. Pelosi came up with the farthest-left healthcare bill she dared produce, then tried to ram it through the House of Representatives while Obama read endless sales pitches to the American people from his teleprompter.  When it became clear that Pelosicare 1.0 wouldn’t pass the House despite the large Democratic majority in that chamber, Madam Speaker oversaw the production of Pelosicare 1.1, which incorporated just enough compromise to squeak through on the final floor vote.  Bear in mind that I’m merely complimenting Rep. Pelosi on her tactics and her ideological doggedness while wholeheartedly opposing her agenda and her ideology.  

 

The Senate is, of course, more prone to compromise.  That’s how it was designed.  Despite the filibuster-proof majority the Democrats enjoyed until this week, the compromises that were ultimately needed to keep Obamacare alive in the Senate became so ugly and convoluted that they accelerated the growth of the already-strong citizen outrage against the bill.  This outrage led, in turn, to the election of Scott Brown in Massachusetts.  The swearing-in of “Brown 41” introduced a new layer of gridlock by eliminating the Democrats’ supermajority, which means that Obamacare is dead.  The system worked as the Founders intended.  Gridlock killed Obamacare.

 

And I admire the Republicans in Congress for having held their ground against Obamacare.  Until this week, the Democrats controlled enough seats in both houses of Congress to enable the passage of Obamacare without a single Republican vote.  But to do so required all sorts of shenanigans (the Louisiana Purchase, the Cornhusker Kickback, etc.), some of which might not have been necessary if two or three GOP senators had crossed over.  I was impressed that all 40 Senate Republicans held the line and voted “no” at the crucial moment, and that all but one Republican in the House voted “no”.

 

[1] Actually, Reagan was better at this sort of thing than Obama has been thus far.  Reagan entered office with a Democrat-controlled House of Representatives and a Senate in which the GOP had a majority but not a supermajority.  During his first year in office, Reagan nonetheless managed to get large parts of his political agenda enacted by Congress.  Thus far, the only major component of Obama’s agenda that has passed Congress is the “stimulus” bill, despite the fact that Democrats control both the House and Senate and despite the fact that they enjoyed, for a period of at least six months, a supermajority in the latter chamber.  Other key components of Obama’s plan, including government-run healthcare, regulations designed to make electricity more expensive, and the elimination of the secret ballot in unionization votes, appear pretty much dead for the time being.  Admittedly, another element of Obama’s agenda (higher taxes) will automatically become reality on 1 January 2011 if Congress does nothing.  That’s when the 2001 tax cuts expire.  

 


Posted by N. William Clayton at 1:24 AM MST
Monday, 2 October 2006
The Gambling Ban
I sent the following letter to one of my U.S. senators, who's up for re-election this year.

__________________

Dear Senator Hatch:

As a long-time GOP activist, I’ve been vacillating about whether to bother voting in November.  The main reason for my lack of enthusiasm has been the fact that Republicans have, on most issues, been acting like Democrats since gaining simultaneous control of the White House, the House of Representatives, and the Senate.  In fact, Republicans have managed to out-Democrat the Democrats on a number of domestic issues.  The only saving grace for Republicans at the federal level in recent years has been their willingness to support our war against the Jihadis while the Democrats have retreated into pacifism.

Earlier this year I began to believe that Democratic control of the House might jolt the Senate and the White House into acting more like Republicans on domestic issues without necessarily imperiling our war efforts overseas.  When called to the mat, a sufficient number of Democrats in a hypothetical Democratically-controlled House will refuse to cut and run in the face of Jihad, while, at the same time, Republicans in the Senate and the White House might, in the process of having to deal with a House led by the Loony Left, develop some backbone when it comes to dealing with domestic issues such as stopping the Mexican invasion, cutting taxes, reducing the size, cost, and power of the federal government, and confirming constitutionalist judges to the federal bench.

Recently, when Congress suddenly authorized a fence along the Mexican Border while, at the same time, starting to show a few meager signs of fiscal restraint, I began to think that maybe Republicans in Washington were finally beginning to “get it” and might not need the bracing impact of a Democratic takeover of the House to persuade them to return to conservative principles.  At the same time, the Democratic Party has been publicly strengthening its embrace of socialism, pacifism, and environmentalism to the point where I was beginning to buy into the “Speaker Pelosi” scare tactics used by the GOP.  Perhaps I’d vote in November after all to avert a Democrat takeover.

Then came the shocking news that the Republican Congress has decided, out of the blue, to ban all internet-based gambling done by Americans, including gambling conducted outside the United States, with the strange exception of state lotteries, horse races, and Indian casinos.  Don’t you guys have better things to do with your time and your power than to ban yet another victimless recreational activity?  Aren’t there already enough federal laws on the books?  Do you even believe that there’s any limit to how big the U.S. Code should get?  Is there any private activity that you think doesn’t lie within Congress’ purview to ban, tax, or regulate?

I’ve once again lost my will to vote.  I think I'll sit this election out and encourage my Republican friends and family members to do the same.  A few years of divided government might whip our party's politicians back into shape.

Please re-read the 10th Amendment, and then show me the portion of the Constitution that authorizes Congress to ban internet-based gambling.  Thanks for taking time to consider my views.


Sincerely,

N. William Clayton

GOP Precinct Chairman and Utah State Delegate, Precinct 4738


Posted by N. William Clayton at 11:21 PM MDT
Updated: Monday, 2 October 2006 11:26 PM MDT
Friday, 14 October 2005
The Court and the Constitution
The duty of a Supreme Court justice is to interpret the law in light of judicial precedent, and to overturn laws and judicial precedents that clearly violate the Constitution. While the Constitution certainly provides room for judicial interpretation, many Supreme Court decisions have gone far beyond the limits of interpretation, entering the realm of pure fabrication. While this is not a new phenomenon (think: Scott v. Sanford, 1857), it has become far too frequent in recent decades.

For example, this past summer the Court eliminated two clearly-worded portions of the Bill of Rights (the “public use” clause of the 5th Amendment and the entire 10th Amendment) by ruling that these two items have no meaning and are therefore essentially null and void.

In addition to flagrantly discarding textually explicit constitutional protections such as these, the Court has been finding all sorts of things in the Constitution that most of us don’t see there.

For example, the Constitution is completely silent on the matter of abortion. In light of the 10th Amendment, such silence means that individual states have the power to allow, prohibit, or regulate abortion as their people and their legislatures see fit. This was how the matter was handled until 1973, when the Supreme Court suddenly “discovered”, while considering the case of Roe v. Wade, that the Constitution prohibits state governments from restricting abortion during the first six months of pregnancy.

Justice Harry Blackmun, who authored the majority opinion in the Roe decision, clearly viewed the Constitution as a lump of Silly Putty that could be molded and distorted in any way necessary to suit his personal political agenda. This is precisely the sort judicial philosophy that doesn't belong on the Supreme Court.

We shouldn't care whether a given Supreme Court justice is liberal or conservative or pro-abortion or anti-abortion. We should only care about whether he views the Constitution as having a reasonably definite and restricted meaning or regards it as an infinitely elastic document.

Posted by N. William Clayton at 10:45 PM MDT
Updated: Tuesday, 18 October 2005 1:51 PM MDT
Sunday, 9 October 2005
Another Letter to the President
My previous letter was pre-Miers. This one was written a couple of days after the Miers nomination.
_________________________________

Dear President Bush:

Your choice of Harriet Meirs for the Supreme Court is the final straw.

We need Supreme Court justices who are known to take the Constitution seriously and who are of a sufficiently curmudgeonly nature that they will retain their edge and avoid becoming overly chummy with and influenced by the leftists on the Court, as happened with justices O'Connor, Kennedy, and Souter.

A number of potential Supreme Court candidates clearly meet these criteria. Harriet Meirs does not.

I have worked hard to achieve simultaneous Republican control of the White House, the Senate, and the House of Representatives. These goals were attained several years ago, and all we've gotten for it is more socialism, an explosion of federal spending that puts every Democratic administration in my lifetime to shame, greater disregard for Constitutional princples than ever, more federal control of state and local matters (such as education), and a "zero-tolerance" police-state mentality which recently landed a peaceable young man from my own state in federal prison for 63 years because he committed a completely non-violent technical violation of federal gun-control laws -- laws which are unconstitutional to begin with.

I now believe that the only way to stop the growth of the size, power, and cost of the federal government is to see to it that neither major party has simultaneous control of the White House and both houses of Congress. Split control results in partisan bickering and gridlock, which can serve to slow down the march toward socialism and tyranny. This sort of split control existed during the last six years of the Clinton Administration, which is why those were such good years for the country compared with recent times.

My previous plan had been to work to end Republican control of the House while retaining GOP dominance of the Senate, as the latter body is tasked with confirming judicial nominees. However, given your unwillingness to nominate hard-core constitutionalists to the Supreme Court, Republican control of the Senate no longer seems quite so crucial. Given the fact that, in legislative matters, the GOP-controlled House seems a bit more conservative than the Senate, and given the fact that GOP control is more vulnerable in the Senate than in the House, I'm considering altering my agenda to work for Democratic control of the Senate.

Please let me know whether you would be willing to support this agenda.

Sincerely,

Nelson William Clayton
Utah State GOP Delegate and Precinct Chairman
Precinct 4790
Alta, Utah

Posted by N. William Clayton at 9:08 PM MDT
Updated: Sunday, 9 October 2005 9:16 PM MDT
Smoke-Free Bars?
I keep seeing billboards in Salt Lake City proclaiming that “80% of Utahns want smoke-free bars and clubs.”

To me, this message is fundamentally no different from: “80% of Utahns want ice cream sandwiches.” So what? If someone wants an ice cream sandwich, he’s free to go to the store and buy one. If someone wants to frequent a smoke-free bar or private club, there are a number of these in town from which he may choose. And, of course, he’s free to establish his own smoke-free bar or club if he doesn’t like any of the existing ones.

Unfortunately, the real meaning of the billboard seems to be: “80% of Utahns, the majority of whom do not frequent bars or private clubs, want the Utah State Government to prohibit anyone from operating a bar or private club in which smoking is allowed.”

In other words, 80% of Utahns want to impose their own personal preferences on others by force of law.

Even if second-hand smoke were a health hazard (which it isn’t), the owners of bars and private clubs should be free to allow people to smoke on the premises. The fact that numerous such establishments continue to operate successfully while permitting smoking would seem to indicate that a significant number of Utahns want to frequent such places.

Incidentally, those of you outside the Beehive State might be interested to know that all bars and clubs in Utah that serve alcohol are required by law to be members-only establishments, and a person has to go through a certain amount of rigamarole (again required by law) just to get in the door. Smoking is already prohibited by law in establishments that are open to the general public.

Thus, if you want to smoke at a bar or club in Utah, you have to first find a place that permits smoking, then you have to find a current member to sponsor you, then you have to fill out an application and pay an annual fee, after which you're given a card that you must present at the door every time you go there.

If a minority of Utahns are willing to go through all this just so they can congregate in a bar where they can enjoy their habit with fellow smokers, what moral grounds do the rest of us have to forcibly prohibit them from doing so?

Here's one final bit of irony: Given that two-thirds of the state's population is Mormon, I'm guessing that most of the 80% of Utahns who want to outlaw smoking in bars and private clubs don't personally frequent drinking establishments of any sort, including those that are already smoke-free.

Too many modern Americans are busybodies who feel compelled to forcibly meddle in the private affairs of others. The old addage of "mind your own business" isn't heard often enough anymore.


Posted by N. William Clayton at 9:00 PM MDT
Updated: Sunday, 9 October 2005 9:15 PM MDT
Sunday, 18 September 2005
Letter to the President
Below is a letter which I e-mailed to President Bush earlier today.
_________________________________

Dear President Bush:

Given that the size, cost, and power of the federal government have ballooned on your watch much faster than they ballooned under Bill Clinton, I am looking for a reason why I should continue to support your administration.

There are two types of justices currently on the Supreme Court: Those who take the Constitution seriously, and those who don't. I can't yet tell which category your nominee for Chief Justice, John Roberts, falls into. For the new Associate Justice vacancy, I therefore encourage you to nominate a judge who takes the Constitution seriously, even if it means that he will occasionally vote to overturn unconstitutional laws or policies which you personally favor.

When the House of Representatives, the Senate, and the White House are simultaneously controlled by one party, the federal government becomes much more oppressive than when control is divided between the two parties. The real goal of both major parties at the federal level is to tax, spend, regulate, meddle, and ignore the Constitution. When control of the above-mentioned federal entities is divided, partisan bickering creates political gridlock which, in turn, reduces government's ability to do bad things. When either party controls all three of the above-mentioned entities, this barrier is removed and the government is able to do much more damage.

As a Republican who actually believes in the principle of limited central government expressed in the U.S. Constitution and the GOP Platform, I will actively use my blogging skills to campaign for Democratic control of one of these three entities (House, Senate, or White House) in 2006 unless I soon see some major signs that the GOP leadership at the national level actually takes its own party platform seriously. Putting two new justices on the Supreme Court who take the constitution seriously would be a step in the right direction.

Sincerely,

N. W. Clayton
Utah State Republican Delegate and Precinct Chairman
Precinct 4790
Alta, Utah

Posted by N. William Clayton at 4:31 PM MDT
Sunday, 11 September 2005
Supply, Demand, and Prices
Because of the basic law of supply and demand, gas prices are going to be high for a while. In part, this is due to environmental regulations enacted in recent decades which have dramatically increased the cost of building new oil refineries.

Because the refining industry normally operates on thin profit margins, the increased costs associated with the stricter environmental regulations meant that the building of new refineries was not profitable during the 1980s and 1990s. Consequently, no new refineries have been constructed in the United States since the late 1970s. Thanks to improvements in refinery efficiency, the refining infrastructure that was in place was sufficient for the nation’s needs until recently. However, fuel production finally reached its limit earlier this summer, while Americans guzzled gas faster than ever. The result was a large price increase. Then Hurricane Katrina came along and knocked out about 10% of our total refining capacity. This created further price increases.

The good news is that with gas now at $3 a gallon, the free market will quickly begin to work its wonders if our politicians stand back and allow it to do so rather than cave in to the temptation to meddle.

On the supply side, foreign refiners are now scrambling to ship gasoline to the U.S. at a faster rate, and there is tremendous financial incentive for American refiners to quickly repair their damaged facilities on the Gulf Coast. Every gallon of crude oil that goes unrefined represents a lost opportunity to make money – more so now than it did prior to Katrina. Note that two refineries and two major pipelines that were knocked out by the storm were repaired and made operational by the oil companies within a few days, while government agencies hadn't yet begun to rescue the people stranded in New Orleans, and while FEMA wasn't even aware that thousands of people were housed at the New Orleans Convention Center -- people who were regularly being interviewed by CNN reporters.

The profit motive is a wonderful thing. In fact, it may finally even be profitable to build brand-new refineries in spite of the high cost of complying with environmental regulations. The higher the price of gas, the faster these refineries will get built. Money talks.

On the demand side, American drivers are likely to finally start throttling back on their consumption of gasoline, and car manufacturers will soon be producing a lot more high-mileage vehicles to meet the near-certain increase in demand for such cars. The new plug-in hybrids currently under development could enable you to get 100 mpg or better when commuting or running local errands. My sister in Utah County bought an early-model hybrid car in 2002 and was mildly laughed at by many friends and neighbors who enjoyed roaring around in their gigantic SUVs. She gets about 40 mpg on the highway and more than 50 mpg around town. She also gets to have the last laugh.

Now for the bad news: Most American voters and most politicians know little about basic economics, and there is growing populist pressure for government to place price limits on gasoline. If such limits were enacted, many of the positive developments described above would either take place at a much slower pace, or not take place at all.

Every time throughout recorded history that a government has placed price caps on a commodity, product, or service, the result has been severe shortages of the commodity, product, or service in question. The last time there were caps on the price of oil and gasoline in the United States was during the oil crisis of 1979-1980. The result of these caps, established during the Carter Administration, was that people in many large cities had to wait an hour in line to get gas. President Reagan lifted the price caps in 1981, gas lines vanished, oil and gasoline production increased, and prices at the pump declined.

The temptation of politicians to meddle will be very strong. If you're on the side of meddling, ask yourself this question: Do you want the American fuel industry to be run by the same people who ran the disaster-relief efforts in New Orleans?

Posted by N. William Clayton at 2:09 PM MDT
Updated: Sunday, 11 September 2005 2:42 PM MDT
Soviet Utah
I thought socialism was supposed to have gone out of vogue with the collapse of the Soviet Union. Then I read in Wednesday’s Deseret News (a Salt Lake City daily newspaper owned by the Mormon Church) that the Utah Legislature passed a law earlier this year that puts a cap on retail prices when a state of emergency has been declared in Utah by either the Governor or the President. Such a declaration has recently been made due to the influx of 2,000 refugees from New Orleans, meaning that it is now illegal for retailers (including gas stations) to charge more than 10% above the average price they were charging during the previous 30 days. In other words, the Utah Attorney General now has the power to set gas prices Soviet-style. Let’s hope he doesn’t use it.

Throughout recorded history, government-imposed price caps have always resulted in shortages (in terms of quantity, quality, or both) of the product or service in question. The law of supply and demand requires free-market pricing in order to cause supply and demand to match each other, even (or especially) in the wake of a natural disaster. Should the Utah Attorney General’s Office decide to enforce the new law and dictate gas prices, you’ll end up waiting in very long lines for gas if you’re lucky enough to find a station that has any.

Economists have made great strides in recent decades in understanding how the world works. Sadly, most politicians have no grasp of economics. Consequently, you may find yourself having to drive to Evanston to fill up next week, unless the Attorney General wisely decides not to enforce the price-cap law.


Posted by N. William Clayton at 1:56 PM MDT
Updated: Sunday, 11 September 2005 1:59 PM MDT

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