Thomas Sowell

Amid all the hysteria among politicians and in the media over rising gasoline prices, and all the outraged indignation about oil company profits and their executives' high pay and lavish perks, has anybody bothered to even estimate how much effect any of this actually has on the price we pay at the pump?
If the profit per gallon of gas were reduced to zero, would that be enough to reduce the price by even a dime? If the oil company executives were to work free of charge, would that be enough to reduce the price of gasoline by even a penny a gallon?

Surely media loudmouths making millions of dollars a year and the multibillion dollar TV networks they work for can afford to get some statistics and buy a pocket calculator to do the arithmetic before spouting off nationwide.

But this is the age of emotion, not analysis.

Politicians are even more hypocritical. The government collects far more in taxes on every gallon of gasoline than the oil companies collect in profits. If oil company profits are "obscene," as some politicians claim, are the government's taxes PG-13?

The very politicians who have piled tax after tax on gasoline over the years, and voted to prohibit oil drilling offshore or in Alaska, and who have made it impossible to build a single oil refinery in decades, are all over the television screens denouncing the oil companies. In other words, those who supply oil are being denounced and demonized by those who have been blocking the supply of oil.

Given the vast amounts of gasoline sold across the length and breadth of this nation, and given the mega-billion dollars involved, whether or not some corporate executive has an inflated pay scale is unlikely to explain the price of gasoline.

It may allow some people in the media to vent their emotions and some politicians to create a bogeyman, since they can't play St. George without a dragon. But cheap demagoguery cannot explain expensive gas.

When the two most heavily populated nations on earth -- China and India -- have rapidly growing economies and rapidly escalating importations of oil, how could that not affect the world price of oil? After all, the price of oil is determined in the international markets, contrary to conspiracy theories that keep turning up whenever gas prices rise.

Those conspiracy theories have been investigated time and again, without uncovering anything. But it is still a clever political ploy to ask for more investigations when gas prices rise. If nothing else, it distracts attention from those who have been blocking all attempts to enable us to use our own oil.

Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

Creators Syndicate