·:[ The (vast) Right Wing Conspiracy ]:·
• • • • •

Apparently the State Senate of Hawaii skipped Economics 101 when they were in high school:

“Oil companies have been able to earn super-competitive profits at the expense of Hawaii’s consumers,” said State Sen. Ron Menor (search), who helped pass the nation’s first state cap on gas prices set to go into effect Sept. 1.

The law mandates the state Public Utilities Commission (search) “impose a price ceiling on wholesale gasoline prices that reflects competitive market conditions” and to foster “the opportunity for prices to reflect and correlate with competitive market conditions,” reads the statement by the Division of Consumer Advocacy, available on its Web site.

Are you kidding me? A price ceiling?? Did the State Senate ever stop and wonder why gas prices may be so high in Hawaii? The price of oil is one reason, but how about the fact that Hawaii is a series of islands in the middle of nowhere? Market forces determine a price and the government should NEVER have a hand meddling with them.

Here’s a smart woman:

But oil industry lobbyist Melissa Pavlecik disagrees with the idea of capping prices.

“Every expert who has looked at the industry has concluded that the price is higher here because of taxes, the remote location and other market forces. No one has ever found price gouging in Hawaii,” she says.

Exactly. The price of gas will be higher in Hawaii then say, Delaware for instance, if they charge a ridiculously high gas tax, not even taking into account the costs incurred to get the gas to the islands. More:

Economists also warn that, unless companies can make a profit, they won’t send their gas to Hawaii. And even if it doesn’t affect the main islands, critics say oil companies may stop sending gas to outer islands — where delivery costs are higher.

Gas station owners have their own objections. The new law is meant to control prices by putting a cap on what wholesalers can charge, but station owners fear they’ll be squeezed as the oil giants raise rents to make up for lost profits.

“They’re playing a shell game. They’re lowering my price of gas, but then they’ve increased my cost of doing business. So I have to recover that cost somehow,” gas station owner Barney Robinson said.

Textbook economics! Gas producers will have to make up profits somewhere, and if the cost of business raises too much for gas station owners they will be firing employees and going out of business. Price ceilings and price floors (like the government mandated minimum wage for example) are dangerous statist economic planning tools that should be avoided because of the harm they cause. When the Hawaii lawmakers start seeing gas stations close because of the squeeze from gas wholesalers and producers and unemployment raising maybe they will see what a completely boneheaded move they are undertaking.

How stupid is this idea? The article’s conclusion, referring to gas stations closing their doors:

If that happens, Hawaii’s revolutionary gas cap could result in even higher prices at the pump.

Which would totally defeat the point of the gas cap anyway. What a complete waste of time and taxpayer money. Getting a high school Econ teacher to lead a session on supply and demand for the Hawaii state Senate would probably have been cheaper and possibly wouldn’t have resulted in a plan destined to hurt rather then help Hawaiians.

This morning, I turned on CNN as I readied myself for another day at work here in Budapest. On the screen were Bush and Blair in a morning news conference. They had just had a private breakfast before together to work out some differences before going to the bargaining table with the other members of the G7 (and Russia).

From what I heard, it doesn’t sound good for us conservatives. Bush sounded wishy-washy on climate change: he said that he accepted climate change was man-made and that “something must be done.” Although he trotted out the normal line on action against climate change (China and India have to do something first), the scary part was that Blair immediately jumped in. “I will be welcoming a delegation from China shortly.” Hmmm. I hope Bush isn’t walking right into some BS Kyoto-wannabe…he didn’t sound too firm about “staying the course” on emissions.

I checked the net and the news outlets to see if this had made any headliens or there was any commentary. Given the hour back in New York (4:30 am) I doubt I’ll see any big commentary on this morning meeting between Bush-and-Blair until later in the day. But I would keep my eye on this summit. Blair is pushing for something big, and Bush might just cave on something huge.

Heritage’s Nile Gardner shines some light on the path most here in the States would prefer Bush take:

President Bush must resist efforts to tie the U.S. to an artificially set figure on foreign aid spending as a percentage of GDP.The U.S. is already the world’s biggest international donor, providing $19 billion in official development assistance in 2004, according to the Organization for Economic Cooperation and Development (OECD).[2] The President should also oppose any declaration that commits the U.S. to supporting the principles of the Kyoto Protocol.

The President should though work closely with his British counterpart on debt forgiveness, trade liberalization, and economic and political reform in Africa, while insisting that any deal on debt be offered only to fully democratic governments that guarantee political and economic rights for their citizens.

The U.S. and the UK should form a powerful alliance at Gleneagles calling for the abolition of artificial trade barriers by Western nations. President Bush and Prime Minister Blair should jointly call for the scrapping of Europe’s £33 billion ($60 billion) per year Common Agricultural Policy (CAP), the biggest barrier to free trade in the world and a vast welfare system for uncompetitive European farmers. French farmers alone receive a staggering £7 billion a year in CAP payments, 21 percent of the total.[3] At the same time, the U.S. must pledge to end its own (albeit far smaller) system of agricultural subsidies.

How do you know a country is getting to be fiscally and financially stable? Look no further:

The Trade Bank of Iraq on Tuesday issued the country’s first credit and debit cards, from Visa International Inc., at a ceremony in Baghdad.

Visa cards were given to cabinet ministers, government officials and financial professionals, the bank said. Bank Chairman Hussein al-Uzri presented the first card to Adel Abdul Mehdi, one of two vice presidents and a former finance minister.

The bank said it would issue 30,000 Visa cards in Iraq by the end of the year. The company also plans to install the country’s first network of automated teller machines, which would enable cardholders to withdraw Iraqi dinars or U.S. dollars from their accounts.

The Trade Bank of Iraq is a state-owned bank founded in 2003 to facilitate Iraq’s international trade. It is capitalized at $100 million and has issued 1,537 letters of credit worth $5.7 billion since its establishment, the bank said.

First come the credit cards, then the big mortgages, loans, etc. The Iraqi Stock Market is also up, running, and expanding and improving.

I think my (upcoming) senior thesis on microlending/microfinance in developing democracies might just turn into a case study of the Iraqi and growing Eastern European economies, which is really what I want to focus on anyway…