Yet Another Genius Proposal from Sen. Warren

(Don Boudreaux)

Tweet

Here’s a letter to the Wall Street Journal:

Editor:

You report that “high U.S. fuel exports are contributing to $5-a-gallon gas” (June 16). Despite Sen. Elizabeth Warren (D-MA) agreeing with you, both you and she are mistaken to imply that freedom to export keeps prices unnecessarily high in the home market.

The greater are energy producers’ abilities to export, the larger are their markets for domestically produced energy and, thus, the greater are their incentives to invest in domestic exploration, drilling, and refining. While forcibly curtailing fuel exports, as Sen. Warren proposes, might decrease the prices that we Americans pay for gasoline today, the resulting reduced investment in domestic fuel production will ensure that we pay inordinately higher prices in the future.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

…..

Among the many myths about markets is they are myopic while government takes an appropriate long-run perspective. The truth – as evidenced by Sen. Warren’s destructive proposal – is the polar opposite.