High gas prices are inducing consumers to tighten their belts and politicians to call for taxes on oil companies. This Outlook explores the true causes of oil price fluctuation and explains how policymakers can help lower gasoline prices.

The Obama administration is gambling that, with time, firms will flourish, stocks will rise, and market interventions will be vindicated. But it is placing these high-stakes bets with taxpayer funds.

The government’s reluctance to sell may be comforting to those who worry that it is too eager to recede from being a major stockholder in large private corporations, or who believe that stocks have nowhere to go but up.

SymphonyIRI reports that “57 percent of consumers are feeling increased financial strain when gas prices increase, and more than four in ten say high gas prices make it difficult to meet monthly expenses,” based on polls conducted in the second quarter of 2011. Furthermore, 49 percent of consumers plan to reduce grocery spending if gas prices climb another 50 cents. What can be done?

Perceptions of uncertain future events like credit safety or credit risk are inherently subjective and highly influenced by the views of all the others who are doing what you are doing.

Once again, high gasoline prices are in the news. As of this writing, the national average gasoline price per gallon price is hovering around $3.79.

The current financial crisis is an entirely political phenomenon, caused by bad regulation and overcome only by the reestablishment of an institutional system based on responsibility and on the assumption of reasonable risk.

In less than twenty-five years, government “affordable housing” and other housing policies have turned a healthy market into a financial ruin. Until Fannie and Freddie’s market dominance and the government’s role in the housing finance system are substantially reduced or eliminated, the United States will continue to have an inferior and unstable housing market.