Congressional Democrats Would Benefit From an Entry-Level Economics Course

Remember waaaay back in high school economics, when you learned what a market economy is?

Market Economy- an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services (Chapter 1, Principles of Microeconomics, N. Gregory Mankiw)

Well, it seems that Congressional Democrats might benefit from auditing an econ class or two.
This article from the Washington Post discusses Democrats’ failure to recognize the functions of the market, as well as their diligence in blaming the oil industry for high gas prices.

Sen. Barbara Mikulski (D-Md.) was typical: “It is often the large, vertically integrated oil companies that dictate the prices that gasoline retailers can charge.”

Senate Democratic Leader Harry Reid agreed, and then some: “The nation’s eyes are focused on the big-oil companies’ greed and enormous profits – the oil companies blame international tension and demand, and then increase their prices. I blame the Bush administration.”

And why does he blame the Bush administration?

The culprit was predatory, price-gouging oil-company executives – who obviously golf regularly with Dick Cheney.

HA! I knew it. Those evil executives…

The problem, instead, was a series of simultaneous events: climbing crude prices, refining capacity that had been reduced by storm damage and increased U.S. demand for gasoline.
That’s not to say that only supply and demand are to blame. The reports also finger congressional policies – specifically regarding ethanol.
Last summer, refiners were essentially forced to start using more of the corn-derived additive, nearly doubling its cost per gallon. Demand for ethanol became so intense that refiners began importing almost 20 percent of their supply, despite a 54-cent-a-gallon tariff.

Obviously, the added cost got passed along to the pump.

Don’t you just HATE those corporations? If only the government would take care of all of this for us…