See what happens?

Are you wondering about the price of your gasoline? You may have noticed that the price of crude oil is off its highs, but unleaded gasoline hovers stubbornly in the vicinity of $2.90 / gallon. What's up?

I'll listen to competing theories from commenters, but my read is this: our Congress has managed to further boost gasoline prices, even as they have sought to blame the oil companies for "price gouging". How have they managed to do this? Some credit goes to their passage of last year's massive energy bill and its new seven-year ethanol mandate. Specifically, this year four billion gallons of ethanol are required to be incorporated into our automobile fuels. This amount gradually rises year by year to 7.5 billion gallons in 2012.

The problem with mandates of this kind, of course, is that they're legal requirements that brook no excuse. Domestic production not yet capable of producing that much ethanol? Tough. Internal transport of ethanol from the midwest to the coasts difficult or expensive? Too bad. Money is no longer an object, since the legal mandate trumps expense. So while July unleaded gasoline closed at $2.07 / gallon Wednesday, the July ethanol contract was closing at $4.08 / gallon. And no, that's not a typo.

We can thank our lucky stars, I suppose, that this mandated gunk is still usually just a tenth of our fuel (E10 blend, i.e. ten percent ethanol and the rest unleaded gasoline), else prices could be even worse. Doing a back-of-the-envelope calculation here, nine-tenths gallon of unleaded plus one-tenth gallon of ethanol at the July contract prices is a $2.27 gallon of fuel. Add Wisconsin's minimum markup (9.2 percent, I believe), federal tax of $0.184, Wisconsin state tax of $0.327, and we're looking at a pump price of $2.99 a gallon, which appears to be in the ballpark of what we're actually seeing. Whereas if the ethanol were not required as part of the mix, the price would be reduced to $2.77.

Take a moment now to bask in the asininity radiated by our sainted lawmakers. Confronted with the problem that gasoline was getting expensive, they designated a partial substitute, created a law to make it artificially scarce, and now obligate us by law to use the more expensive concoction.

Part of the reason this is so frustrating is that one starts to wonder whether, given the nature of our government today, to complain is to open the door to even worse outcomes. Don't complain about gas prices, since then Congress will have to do something, and the people making the loudest suggestions might turn out to be ethanol lobbyists. Don't complain about illegal immigration, since that encourages the Senate to trot out a massive amnesty bill guaranteed to tempt millions more border crossings. Don't complain about drug prices, otherwise we'll wind up with a new budget-busting Medicare entitlement. It's a disheartening notion.

Is "constructive complaining" a remedy? In other words, don't just say "gas prices are too high." Rather, make sure to say "would ya open up the arctic wildlife refuge for some drilling already, jeez?" Or, "could you stop raiding the transportation budget so we could have a state tax amnesty for the rest of the year?" Or, "would you drop these stupid boutique fuel, oxygenation, and biomass mandates, for crying out loud?" I suppose that would be great if most people actually agreed on which remedy they want, but of course they don't. The resulting cacaphony of complaints and suggested remedies gets polled, push-polled, and focus-grouped for a few weeks and pretty soon the headlines read: "Gas prices too high, survey says." Oy!