Senate Fails To Raise Gas Prices

Yesterday, the Senate failed to pass a bill that would raise gas prices. That's not a typo, I said raise. Why would the Senate want to introduce a bill that would raise gas prices above their already ludicrous levels? Well they didn't want to, they has good intentions and thought they were helping. Unfortunately the road to hell is paved with good intentions.

Senate Democrats put forth an energy bill with a key component being a windfall tax on oil company profits that were not reinvested in alternative energy sources. The thinking behind this is that it would help wean us off of our dependency on foreign oil. Unfortunately, that's not what would have happened.

Oil companies are responsible to their shareholders. The shareholders want profits. A windfall tax means an extra cost to the company. In order to offset the cost, the company must either cut costs somewhere else (i.e. layoffs) or raise prices. So the effect of this bill would have been greater gas prices or greater unemployment.

Now I see the scowls on some faces out there. You're thinking, "Why should I care if the shareholders make money? That's not helping me any." Well it probably is. If you have a pension, you're one of their shareholders. Most pension funds, from private mutual funds to city, state, and federal retirement plans are all heavily invested in oil companies.

Do you have kids? Their teachers' benefits are paid for by investments in oil companies. If you think it's hard to find good teachers now, imagine what it would be like if they had no benefits. Police, fire, ambulance, all these municipal workers have benefits paid for by investments in oil companies. Would you like to make it harder to attract good people for those positions?

Now I'm not saying that oil companies alone are paying for all this, they're just a large part of it. I'm also not saying I like high gas prices. I am saying that we need a feasible, economically-sound energy policy. If the senate (and congress) really wants to do something about the high prices, they need to take steps that will actually amount to lower prices. What can they do? Open more lands for oil drilling, allow more nuclear plants to be built, focus on strengthening the dollar. Each of these will lower the price of oil. None of them is a magic bullet, and none of them will work overnight, but unlike the tax plan, they will help.

Is Fair Pay Sexist?

On the face of it, that appears to be an absurd question. How can anything fair be sexist? I'm not actually referring to "fair pay" as much as two bills known as the Fair Pay Act of 2007 and Paycheck Fairness Act. With names like those, who could be against them. The problem is they start from seriously flawed assumptions.

A recent study by the Bureau of Labor Statistics stated that women make an average of 81% less than men do. The assumption the people behind the bills make is that the difference is due to sexism and something must be done about it.

Economist June O'Neill, who served as director of the Congressional Budget Office under President Clinton, wrote a paper explaining much of the difference. The statistic doesn't say that a woman makes 81% less than a man, it states that women make less than men. However, calculating this number involves calculating all women and all men. This is deceptive because, as Ms. O'Neil points out, women are much more likely over the course of their lives to cut back their hours or quit work altogether than men. So the percentage of women in the workforce is less than that of men. Women not in the workforce make no money, but they are counted in "all women" so this accounts for some (not all) of the difference in the figures. Women are also 40% more likely to work part-time than men are. This affects the difference as well.

O'Neil, as well as numerous other economists, also stipulate that women tend to take jobs that pay less. This is not to say that they are doing the same work for less money, but as Senator Tom Harkin, who authored the bill, has said social workers (mostly female) make less than probation officers (mostly male), "even though both jobs require similar levels of skill, effort and responsibility." However, that is not sexist. Sexism would be if a women decided to be a probation officer and was told she couldn't because she was a woman. Sexism is not not two different jobs make different salaries but women prefer to do the job that pays less.

The assumption at this point becomes, women don't know any better so the government must help them. That's sexist.