Tag: gas

Obama’s Anti-Energy Policy

Robert Samuelson has a great piece on President Obama’s counterproductive bias against domestic oil and gas production in favor of unrealistic “green” jobs:

In 2007, wind and solar generated less than 1 percent of U.S. electricity. Even a tenfold expansion will leave their contribution small. By contrast, oil and natural gas now provide two-thirds of Americans’ energy. They will dominate consumption for decades. Any added oil produced here will mostly reduce imports; extra natural gas will mostly displace coal in electricity generation. Neither threatens any anti-global warming program that Congress might adopt.

Encouraging more U.S. production also aids economic recovery, because the promise of “green jobs” is wildly exaggerated. Consider. In 2008, the oil and gas industries employed 1.8 million people. Jobs in the solar and wind industries are reckoned (by their trade associations) to be 35,000 and 85,000, respectively. Now do the arithmetic: A 5 percent rise in oil jobs (90,000) approaches a doubling for wind and solar (120,000). Modest movements, up or down, in oil will swamp “green” jobs.

Samuelson assumes that the White House is interested in common sense—they’re not. What the White House cares about is what all politicians care about—catering to their constituencies. The reason why Obama does not favor more domestic energy is because there’s no political upside to it for him. Obama can’t afford to annoy the environmentalist lobby that plays to American’s worse environmental fears. If he did, he’d risk losing political support.

Even though domestic energy exploration makes sense in terms of energy policy, national security, economics, and even environmentally, none of that means anything. It won’t play well politically, so it is dead on arrival.

That’s the way our government works in the 21st Century. For all the talk about “hope” and “change” the Obama Administration is as nakedly political as any other, and a politically unpopular program will not be enacted no matter how beneficial the results, and a policy that is economically ruinous but politically popular will always win out. It’s Reding’s Second Law of Public Policy—the best policy will always lose out to the most politically popular policy.

President Obama could show real leadership by dramatically increasing domestic energy productions. But “drill baby drill” was the motto of the other side, and with the worldwide recession pushing oil prices down, there won’t be a serious political demand for more domestic energy until the next crisis hits and it’s far too late.

Clinton’s Fictional Gas Tax Plan

Sen. Hillary Clinton is pushing her own version of a summer “gas tax holiday”—except that her plan would end up doing absolutely nothing to help consumers. Sen. Obama has been attacking her plan (and McCain’s) as an effort to “pander:”

On ABC’s “This Week with George Stephanopoulos,” Sen. Hillary Clinton, D-N.Y., was asked repeated to name an economist who supports her plan to suspend the 18.4 cent federal gas tax. Either she could not or chose not to. “I’m not going to put my lot in with economists,” she said, presenting her tax hike plan as a way to life the burden of soaring gas prices off middle class Americans.

Rival Barack Obama has called the plan, which is also backed by Republican presidential nominee-in-waiting, Sen. John McCain , “a pander” that won’t solve the high cost of gas. Asked about the gas plan in his interview with Tim Russert on NBC’s “Meet the Press”, Sen. Obama, D-Ill., framed the proposal as a “classic Washington gimmick.” “You’re looking at suspending a gas tax for three months. The average driver would save 30 cents per day for a grand total of $28,” claimed Obama.

Although Clinton did not offer her own estimate as to how much relief the holiday would provide, she did try to distinguish her plan from McCain’s. “Senator McCain has said take off the gas tax, don’t pay for it, throw us further into deficit and debt. That is not what I’ve proposed. What I’ve proposed is that the oil companies pay the gas tax instead of consumers and drivers this summer.”

So, what Sen. Clinton proposes is that the oil companies pay the gas tax instead of consumers—and somehow those costs won’t end up getting passed right back to the consumers in the form of higher oil costs. No wonder Sen. Clinton doesn’t want to listen to the advice of people who actually understand economics.

Sen. Obama’s criticisms over the tax aren’t too far off—it is questionable how much a gas tax holiday would actually help consumers, and from a policy standpoint it’s also questionable whether we really want the government encouraging people to use more gasoline than they might this summer.

The Clinton gas tax plan takes the flaws of the McCain plan and magnifies them. At least the McCain plan would actually lower gas prices, while the Clinton plan would just pass the costs right back to consumers. The Clinton plan is definitely a pander—it panders to consumers by pretending to lower gas prices and it panders to anti-corporate sentiment by pretending that the oil companies will take the costs.

Clinton keeps demonstrating that when it comes to economic matters, she’s absolutely clueless—and the fact that she doesn’t want to listen to economists when she formulates economic policy should serve as a reminder why she and the other Democrats not qualified to be deciding this nation’s economic policies.