Mark Gongloff gave us a policy primer and an investment idea in yesterday's Ahead of the Tape column. From the Wall Street Journal:
Oil's climb to $122 a barrel has policy makers and presidential candidates scrambling for quick, feel-good solutions. Trouble is, their ideas are exactly the opposite of what straightforward market economics says is needed....
...What the U.S. really needs, if it seeks a real fix to its energy-consumption problem, is less demand, not more. Mr. Market says there's a simple way to do that: Jack up the gas tax. Don't lower it.
Economists call it a "Pigovian Tax," in honor of English economist Arthur Pigou, who early in the 20th century examined economic activity that hurts innocent bystanders. To stop behavior that's not in the public good, you tax it more, not less....
...Beware a Spinout at Speedway Motor
Higher gas prices mean the yellow caution flag is waving over Speedway Motorsports, one of two big Nascar racing promoters.
Speedway derives about 37% of its revenue from admissions and a little less from concessions. High gas prices make racing fans less willing to drive long distances to races or spend on baseball caps and beers once they get there....MORE