Socialist Sanders’ Hot Air on Gas

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Since the economic collapse of 2008, the Federal Reserve has more than tripled the money supply. This deliberate policy of inflating the currency predated the Obama presidency. But Obama-endorsed schemes such as quantitative easing—the Fed essentially creating vast amounts of money to pay for government operations—have exacerbated inflation.

A better way to think about increased fuel burdens is to grasp that it’s not necessarily the gasoline that is more expensive. It’s that our dollars are worth less than they once were. Money, like widgets, bananas, labor, or any other commodity, is susceptible to the laws of supply and demand. Flood the market with labor, and labor becomes cheaper. Flood the market with blue jeans, and blue jeans become cheaper. Flood the market with dollars, and dollars similarly become cheaper.

A consequence of running huge deficits is to either raise taxes, cut spending, or print money. Barack Obama hasn’t increased the top marginal income tax rate or slashed government spending as he promised. His Federal Reserve has rapidly expanded the money supply. Devaluing currency necessarily escalates the prices of goods purchased with currency. It’s not speculators increasing the price of a gallon of milk, an ounce of gold, or a semester’s tuition. It is, in large part, monetary policy that has done this.

By law, service station owners aren’t allowed to inflate the gasoline supply. But unscrupulous proprietors prime their pumps in just this way. The punishment for diluting petroleum with water or other additives often involves heavy fines and temporary closure of service stations. Just this December, New Jersey cited fourteen stations with selling gas containing octane levels less than advertised. What the government forbids at gas stations is a matter of practice at the Federal Reserve, where they constantly tinker with the value of the dollar. Enforcing honest weights and measures is a legitimate function of the state that the state enforces on everyone but itself.

In the 2008 campaign, Barack Obama faulted the Bush Administration’s energy policies for rising gas prices. He claimed that expensive fuel was proof of “Washington’s failure to lead on energy,” which transformed a “middle-class squeeze into a devastating vise-grip for millions of Americans.”

It wasn’t about speculators then. It’s not about them now, either.

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  • pierce

    I used to live in Vermont, so I know a fair amount about Socialist Senator Sanders,, but I do not buy his point of view. The man is a millionaire and a hypocrite, and unfortunately for Vermonters, does not represent the real world, but because a lot of Vermonters are naive, and/or blind, believe he is the end all. Well he is not, but he thinks he is, at least to this reader. Who is worse Sanders or Obama, take your pick.

  • kongMing

    Exactly. First time I've heard this mentioned in the media. Wheat, silver, and industrial chemicals have risen far more than oil due to the President's big spending.

    Also consider before the White House will address the $300 billion in waste shown by the GAO, they want to raise our taxes immediately while setting the baseline cuts in waste and fraud in the future so they never materialize.

    They spend the money passing it around to other local and state governments, who just limit their borrowing. Obama and his political backers take money off the top, and take loans so other can lessen their's.

    As better technologies for commodity processing emerge, and more efficient manufacturing lowers demand, one day commodities will drop. The radicals who prevent drilling and mining will end up costing the US about $300 trillion.

  • BS77

    Why not let Solyndra manage the gasoline supply?

  • mrbean

    It seems that the socialist Sanders and Bill O'Reilly think alike. Mr. O’Reilly in his economic ignorance is demonizing the industry that produces oil and this is extremely dangerous. The gross mischaracterization of petroleum companies creates an environment where government leaders feel free to make decisions that run counter to the interests of the American public. Remember Carter and the so-called widn-fall profits tax. Right now Dennis Kucinich is proposing legislation for a new “windfall profits tax” on oil companies. Representative Maxine Waters (a basket case when it comes to basic intelligence) wants to nationalize the oil and gas industry. Oreilly was told by Krauthammer and a commodities expert how off-base he was and he can't learn that supply and demand globally (and excise taxes) dictate the price of a gallon of gas. All he can do is demand that the government tax them more. Stupis is as stupid does Nill.

  • StephenD

    But there will be some other straw man issue to distract American's from the real problem of the policies of this Administration. So far, they've held aloft Birth Control, The "Millionaires and Billionaires" not paying their "fair share," the “Arab Spring” (which has to turned into an Arab Winter) and our role in it (which should be non-existent), the “success” of the Auto bailout (we shant mention the failure of the Solar bailout), the withdrawal and “success” of our troops mission in Afghanistan and Iraq, the “talks” with Iran and now North Korea; all these and many more issues that only serve to take our attention away from their vast failures to serve the American Public just until he can secure his re-election. G_d help us if this happens.

  • joe

    from the once rupublican now socialist republic of vermont new york suburb

  • WilliamJamesWard

    I buy gas, check the mileage and get 20mpg, not good, next time 28mpg, OK, nest time 19mpg, what
    the gassahol is going on, I will keep a record and talk with the station owner. As far as Sanders goes,
    it is about time for him to turn up his toes, who will be the next leftist Vermont will barf up to help keep
    America on a down hill ride to Socialist utopia?…………………..William

  • ebonystone

    If Bernie wants to blame someone for high gas prices, he need look no further than the Saudis and the other OPEC jihad sponsors. Crude priced at $100/bbl means that about $2.40/gal is going straight to them. Then add federal and state gas taxes ranging from $.30/gal to $.70/ gal. That leaves at most $1.00/gal to pay for the transportation and refining, the wages of all the employees, and all the other taxes involved.

  • badofdirt

    How can they blame Wall Street for speculating? They themselves are speculating (with 100% certainty) the market while they oversee from their special committees and have made millions.

    We now know why this administration brings the economy down to it's knees, because they don't even know Econ101!