More about gas

I've heard a bit from liberal type folks who don't seem to be upset or concerned about the recent bit of price gouging by the gas companies. In fact, I've heard many people who are pleased that the price has gone up, convinced that the higher price will induce people to seek alternative modes of transportation or in general consume less gasoline. This is not the case. With a short term price shock such as this you shouldn't expect to see any decrease in demand as a result of the price increase. The fact is that the elasticity of demand for gasoline is very low in the short term. High prices for an extended period of time will likely result in some changed behavior, but a minor interruption of national refining capabilities will not result in long-term higher prices. If the goal is to reduce consumption then a gas tax would be the way to go. That tax could fund public transportation and other innovations to make energy use more efficient. As it stands, increased case prices are unambiguously bad for our economy. They lower our standard of living. They make other goods more expensive as a result of increased transportation costs. In short, if your state has laws related to gas price gouging then perhaps your state should be investigating legal recourse. This is not good behavior from the gas companies.