I know, I’m as shocked as you are: but that’s what happened. You see, Richard Thaler was trying to push back on the entire steadily-rising gas price thing (four bucks a gallon, if you’re lucky), and so in an op-ed today for the New York Times Thaler authoritatively declared:
Here is a one-item test to see whether you are guilty of cloudy thinking about gas prices: Do you believe that they are something a president can control? Many Americans believe that the answer is yes, but any respectable economist will tell you that the answer is no.
Meet the not-respectable economist Barack Obama:
…for those without video, it’s a campaign ad where then-candidate Barack Obama was engaged in some would-be faux populism over Big Oil and how they were causing high gas prices (three-fifty a gallon, back then), and how Obama would do something about it (mind you, what he did about it, apparently contra Thaler, was to turn what was a somewhat temporary spike in gas prices into the new baseline). In other words, Barry certainly acted like he thought that he’d have some control over the process there, Professor Thaler. Was that acting an artifact of that informal advice to the President you were saying that you gave, Professor Thaler?
Before you turned on this administration, of course.
Moe Lane (crosspost)
So I understand that they want to increase the taxes of oil companies. But, I still can’t wrap my head around how their scheme is supposed to lower gas prices.
These people seem to think that if the state taxes ‘excess’ profits – more accurately, if the state taxes what it defines as ‘excess’ profits – then the companies will lose the incentive to keep those ‘excess profits’ and will thus reduce the retail price accordingly.
What? No. No, academia does not trust the market in the slightest, and it’s been resenting it for thousands of years.