Oil Hits $117 Per Barrel

"A meeting of big oil consumers and producers has yet to forge a consensus that a record oil price above $117 a barrel is too costly, the head of the International Energy Agency (IEA) said on Monday," reports Reuters. "Nobuo Tanaka said he was met with silence from an audience which includes heavyweight members of the Organization of the Petroleum Exporting Countries, when he asked if they shared the IEA's view that prices were too high."

In the Cato-at-Liberty blog post "Is There an Oil Price Bubble?" Cato senior fellow Jerry Taylor writes: "The most recent Fed actions to combat the deteriorating state of the macroeconomy added even more fuel to the oil price fire. With market actors increasingly convinced that the Fed is willing to entertain inflation in the course of injecting liquidity into the market, investors are looking for investments to hedge against inflation. And what do you know? Returns on commodities have historically been better during inflationary periods than during non-inflationary periods. Ben Bernanke thus sent another strong infusion of cash into commodity futures -- again, largely into oil and gas futures.

"The increased demand for oil futures drives spot prices because it diverts oil from immediate use into inventories. The stepped-up infusion of oil into public inventories (the Strategic Petroleum Reserve and the emerging state inventory maintained by the Chinese government, for instance) has also contributed to the diversion of oil from immediate use and thus, has further increased prices. Federal mandates for low-sulfur fuel haven't helped either."

States Raising Tobacco Taxes

"To keep the state's landmark universal health coverage plan afloat, Massachusetts lawmakers are looking to tap an increasingly popular source of financing for health-related initiatives: tobacco taxes," The New York Times reports. "If the state raises its tax by as much as $1 a pack, it will join New York -- and possibly a number of other states -- in enacting significant increases this year."

In "Children, Say 'Thank You for Smoking,'" Thomas Firey, managing editor of Cato's Regulation magazine, and Jacob Grier write: "Smoking in the United States is already declining significantly -- largely as a result of public awareness of its dangers, not higher taxes. The declining number of smokers makes cigarette tax revenue unstable. ... Tobacco use is linked to increased risk of a host of cancers and other diseases, and some of the costs of fighting smoking-related diseases are passed on to taxpayers. But cigarettes are already heavily taxed, and the resulting tax revenues already more than offset the public costs of smoking. A landmark study of 1995 smoking data by esteemed risk analyst Kip Viscusi, now of Vanderbilt University, showed that taxes in that era more than offset the broad range of social costs from smoking."

"Millionaire's Amendment" Challenged

"Wealthy, self-financed congressional candidate Jack Davis says the McCain-Feingold Act's 'Millionaire's Amendment,' which raises the contribution limits for opponents of wealthy, self-financed candidates, is not only unfair but also unconstitutional, and his lawyers will try to persuade the Supreme Court of that tomorrow," The Washington Post reports. "The provision violates his rights under the First and Fifth amendments, gives an advantage to his opponent and imposes reporting requirements that force him to reveal his campaign strategy, says Davis, an industrialist who unsuccessfully ran for Congress as a Democrat in 2004 and 2006."

Cato senior fellow Ilya Shapiro comments:

"Tomorrow the Supreme Court will hear yet another challenge to the McCain-Feingold campaign finance law: The 'Millionaire's Amendment' attempts to discourage candidates for election to Congress from spending more than $350,000 from their own personal funds. It penalizes campaign spending above that threshold by enhancing the political speech of the self-financing candidate's opponent through increased contribution limits and unlimited coordinated party expenditures. This penalty unconstitutionally chills candidates from engaging in protected political speech beyond that personal funds ceiling, and does so without serving any governmental interest that the Supreme Court has recognized.

"The penalty doesn't event prevent the 'corruption' that was the rationale for McCain-Feingold, because there is no threat of a quid pro quo from a candidate's expenditure of her own funds. And the Supreme Court has expressly rejected the district court's rationale for upholding Section 319 -- 'leveling the playing field' of financial resources -- as an interest sufficient to justify infringement of First Amendment rights. Ultimately, the 'Millionaire's Amendment' is nothing more than an incumbency protection mechanism designed by Congress for its own benefit."