Advertisement

Elastic Gas

I started out thinking that Hillary Clinton was just making a clever dodge on the gas tax holiday, but now she’s lighting in to Barack Obama for having the correct position on John McCain’s stupid idea. This is basically the environment/energy/transportation equivalent equivalent of Obama’s anti-mandate fliers and it makes it very hard to imagine that she’s prepared to try to do anything about climate change.

Meanwhile, short-term demand elasticity for gasoline is low, because the main things you can do to use less of it — buy a new car or move — aren’t really short-term decisions. But this inelasticity goes both ways and a temporary (though of course one doubts it really would be temporary) cut in gas taxes doesn’t give anyone much incentive to cut consumers a break.

What’s needed are measures that can increase the short-run elasticity of demand. Making federal funds available to increase the frequency of bus service and/or reduce fares to give people better alternatives to driving might work. Or some kind of program designed to facilitate/encourage the trading in of inefficient vehicles for ones that don’t guzzle as much gas. I’ve heard over and over again about Clinton’s vast powers of wonkery and incredibly command of policy, so maybe she should show us some with some creative thinking on a tough problem rather than mindlessly parroting John McCain’s proposals.

Advertisement