You may think it’s the Republicans who were the big losers last week, but you’d be wrong. It was the Energy Party.
I realized how awful things were last night as I passed the gas stations on the way home. Hess was at $1.879.
Folks, that’s the same as less than 30 cents a gallon back when I started driving in 1968. Which is less than we were paying then. And when I think of the 1968 Buick LeSabre I used to drive (before I bought my Vega, which was really a mistake), and the mileage it got, it sends a chill to the heart.
Even I, Energy Party stalwart that I am, thought about stopping to buy some of that cheap gas, even though I had plenty in my tank.
So now everybody’s going to start buying SUVs again (which of course will create upward pressure on the gas price, but we never learn), and Obama’s going to make sure we don’t drill in Utah or wherever, and Congress wants to bail out Detroit (or perhaps we should say, it wants to bail out the UAW), whether it gets its act together or not.
As The New York Times noted on Election Day,
Just a few weeks ago, the Big Three American automakers convinced
Congress to give them $25 billion in cheap loans to retool their plants
to make fuel-efficient cars. Then, with nary a blush, the Ford Motor
Company introduced the new star in its line: the 2009, 3-ton,
16-miles-per-gallon, F-150 pickup.
Lord help us, because we won’t help ourselves.
Just to review, here’s what we should do, and are not going to do:
- Impose a tax increase to get the pump price of gasoline back closer to $4, so the money stays in this country, and demand is curtailed, thereby driving down world prices, thereby putting more money in our national coffers for hydrogen research, developing electric cars, paying for the War on Terror, credit bailouts, a National Health Plan, and all the other stuff we can’t actually afford now.
- Produce more of our oil domestically, whether it’s off-shore, in Utah, in Alaska, wherever — for as long as we continue to need the stuff, which will be for quite a while.
- Put all the resources we can muster into an Apollo/Manhattan Project to make our need for oil a thing of the past ASAP. How will we pay for it? I just told you.
- Use "stimulus" funds to build mass transit, nuclear plants and other critical energy infrastructure, rather than throwing the money to the winds the way we did with the earlier stimulus program.
- Do all the other stuff in the Energy Party Manifesto.
There. I said my piece. Nobody’s listening, but at least somebody said it.
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Just now I went down the customer service desk in the lobby here at the paper to get some change for the snack machines.
There was a gentleman there announcing to all who could hear that he had just bought gasoline at $1.80. (For those keeping score at home, that would have been 29 cents a gallon in 1968.)
He seemed thrilled. I managed to contain my enthusiasm. I’m disciplined that way.
Oh, come on, Brad. It’s a wonderful thing. Twenty dollars worth of gas costs $20 now. Just two months ago it cost $40.
Thank you, Mr. Obama, you are The One, the very one. You haven’t even taken office yet and the oil gods are bowing down. I bet my check will arrive in the mail any day now.
Brad, as usual, shows his pro-government philosophy. For EVERY problem there is a government solution. This time though Brad has a point, sort of. The current low price for gasoline is not sustainable and hence there is a risk that people will return to their wasteful ways and we will again increase consumption of fossil fuels and fail to grasp the central point in this debate. Simply put, we must find a way to get around without using gasoline. T. Boone Pickens idea for using natural gas as an interim measure is a good one. But with low gas prices it’s hard to convince people that oil is indeed running out. Mexico will become a net oil importer within 5 years. Russian oil production so far this years is down 6% from 2007. U.S. oil production continues to drop as does production from the North Sea. Likewise OPEC is cutting production.
But there is another side to this. The American people are swamped with a terrible cash flow crisis. Folks are losing thier jobs at the fastest rate since the Bush Sr. recession. Many are losing their homes and cars because they can’t afford the payments. Others are awash in debt including that second mortgage because they can’t sell their homes after they bought a new one. A little relief at the pump doesn’t seem like such a bad thing for now.
I doubt this will last long but it serves the same purpose as a stimulus package. If only folks were a bit more disciplined and understood this is a temporary thing then it would be a good thing in the short to medium run.
But Brad does have a point. If these low prices persist folks will once again buy those huge vehicles. Frankly though I doubt this will last much into the new year. The fundamentals do not support these prices. So I say let’s just enjoy this for now. No need for dramatic action given the major economic problems we face. On balance the low gas prices are a good thing.
Yeah, better for an extra $300 dollars a month for my family to go into the hands of the all powerful government (nevermind the downstream impact of gasoline costs on every other aspect of the economy).
Brad, I mean this in the most respectful way possible, but you haven’t got a flipping clue about economics. Your gas tax would drive the economy even faster into a Depression.
You want to spend money on energy independence? If it’s that important, then take it out of the revenues that already are going to the government. Is NASA more important than energy independence? How about a Department of Education? How about farm subsidies?
How about a war on the other side of the world?
Every dollar you want to spend on this pipedream is available RIGHT NOW in the coffers of the Federal government. Why don’t you endorse politicians who make that effort a priority?
Nah… the EASIEST solution you always come up with is raise taxes and hand the responsibility over to the government.
I would rather pay higher prices to the oil companies, and let them make more money, which they can invest into new exploration and into research for new fuels and motors, rather than hand higher fuel taxes over to a corrupt government which will blow it all on welfare programs and a little bit of academic research for window dressing.
Gas down at $1.80 is bad. Sarah Palin stated today that the republican party should NOT become the negative party (irony is completely lost on her). A Catholic priest in Greenville is refusing to serve communion to Obama supporters yet McCain ignores poverty and wants to continue with the death of thousands of civilians in Iraq and his supporters are ok.
I’m waiting for “cats and dogs living together.”
The civilians in Iraq are being killed by Muslim terrorists… you know, the ones who celebrated the election of Barack Obama.
McCain isn’t ignoring poverty.
The Democrats are trying to create more poverty.
They like having illiterates living in fear of starvation, waiting on a handout from Massa Obama.
“McCain ignores poverty”
How does McCain ignore poverty? If I recall correctly from the campaigns, both he and Obama gave considerable amounts to charity.
Yeah, right; I don’t understand economics.
That means that neither Robert Samuelson nor Thomas Friedman nor Charles Krauthammer nor Jim Hoagland understand economics, since they all agree with me — the one smart policy is to raise gasoline taxes to create a floor price that’s high enough to suppress the demand, and which serves to keep the money at home instead of in the pockets of the petrothugs.
Here’s something I don’t understand — what Randy just said, and what it had to do with the subject at hand.
I would point out, though, to him and bud that this was an issue on which — by MY way of looking at things — John McCain was wrong and Barack Obama was right. McCain (and Hillary Clinton) wanted to pander on the gas tax, while Obama refused to. That was good. But now we need to do the opposite of pandering, and RAISE the tax.
Interestingly, I heard a piece this morning on the radio regarding whether or not to bail out the Big 3. One commentator with considerable experience in auto industry economics said in essence, “No bailout, reorganize in Chapter 11, add taxes until the price of gasoline reaches $ 6/gallon.” 26 years ago, I was in the audience when Don Peterson (then CEO of Ford) said, “The Japanese taught us a lesson.” In the meantime, the Big 3 forgot what that lesson was.
Randy: “Gas down at $1.80 is bad.”
Brad: “Impose a tax increase to get the pump price of gasoline back closer to $4.”
Uncle Weldon: “And I’m the one who’s in an asylum?”
1. Why should the government be involved in suppressing demand for a product of private business (gasoline)?
2. The pain of doubling the price of gasoline is going to be felt the hardest by those on the lower end of payscale who are already trying to make ends meet.
Wait, maybe you are right. After all, taxes can be a great way to mold behavior for whatever cause we (the govern… I mean people) choose. And while we’re doing so maybe we can save the trees and landfill space by putting a $2 tax on every newspaper sold in this country.
This issue creates an interesting fissure among conservatives.
On the one hand are those who just hate taxes in any form, but ESPECIALLY taxes which actually encourage behavior that might be good for the country. We’re hearing from some of those above.
On the other hand are those who greatly prefer a higher gas tax to CAFE standards. Krauthammer would be in that category. So would my old boss, Fred Mott. Fred was probably the most conservative publisher I ever worked for. Publishers tend to be economically conservative and culturally liberal (which creates tension with ME, since I tend to be the opposite). Not Fred. He was conservative about everything.
And nobody hated taxes more than Fred. He and I used to have big arguments about taxes in South Carolina, which he insisted were just extremely high (until he left here to go work in Pennsylvania, which is another story). So it sort of shocked me one day when he said that what we need to do in this country is raise the gas tax — instead of raising CAFE standards. But that’s because Fred was that kind of conservative — the sensible kind.
YES, it would be painful, especially for the poor. But as painful as it was, the world kept turning with $4 a gallon gas. Now, before it goes there again (which it WILL), we should beat the petrodictators to the punch and raise the TAX to that level, so that we can hang onto our money here in this country, and use it for things that would help the poor and the rest of us, such as mass transit and electric cars and new energy sources.
To do otherwise, just so we can bask in the pleasure of cheap gas for a little bit longer, is crazy, and most decidedly not in our best interest. It’s pound-foolish.
The politicians aren’t going to suggest this, because they’re all about getting elected. They expect us to act like children and insist on cheap gas no matter what the long-term cost, and they’re glad to pander to us on that. That’s what McCain and Hillary Clinton both tried to do, and Obama, God bless him, resisted.
Here’s another irony for you: Doug likes term limits (if I recall correctly). But the ONE good argument out there in favor of term limits is that MAYBE they would motivate politicians to do something smart like raise the gas tax, which they will never do as long as they have hope of re-election.
The only hope on this would be for a movement of grownups out here in the electorate to rise up and say, “Raise our gas taxes,” because the politicians are not going to lead on this.
Folks, nobody likes paying more for gas. I certainly don’t. Frankly, I feel like I’m overpaying at any price more than a dollar a gallon. (Maybe it’s the fact that I AM such a cheapskate about gas that keeps me from getting overly excited about $1.80, which still FEELS too high to me.) But my feeling that way, and being motivated by the price rising beyond my ability to pay to CONSUME LESS of it, is in my long-term best interest, and the country’s too.
Oh, and just in case anyone out there takes what Birchibald said about taxing newspapers seriously… folks, you might be able to come up with reasons to do that, but the argument I’m using about gasoline doesn’t work for that.
The problem, the one I’m trying to address, is that we buy a lot of gas from places like Venezuela and Saudi Arabia. That’s not where we get the trees for paper. Whatever the price for newsprint (and I hear it’s rising 10 percent in 2009), it’s something we grow right here in the US of A.
Oh, I know where you were going with this Mr. Warthen, you might say I was just trying to get a rice out of you.
I still disagree about the $2 tax though. But if you are usually on the opposing side of fiscal conservative/culturally liberal types, then I probably won’t be agreeing with you often.
Now, I’m no economist like Lee (snicker, snicker), but if we decrease our consumption of oil from the Venezuelas and Saudi Arabias of the world, isn’t that going to drop the price of oil globally and in turn increase demand for oil in places like China? So in the end, don’t the America-haters get their money anyway all the while our economy suffers with higher input costs for domestic goods? Seriously, I’m not sure how that would all work out.
Robert Samuelson nor Thomas Friedman nor Charles Krauthammer nor Jim Hoagland agree with you, Brad, because none of you understand economics, nor do you respect free markets and individual choice.
You all prefer the blunt instrument of government force.
I am sure you can round up a few more pundits who agree with you, and it will be because they, too, understand nothing about economics and markets.
Brad, the effect of taxing gas $2 a gallon would be to decrease demand temporarily, increase the price of everything now and forever, and do almost nothing to demand for petroleum in the long run.
It would also give us more bureaucracy and more money for the government to literally steal and give to its friends, which seems now to be the main purpose behind the big bailout.
PM, my 1.80 is bad comment was simply a restatement of Brad’s point.
Brad, my point was to point out contradictions; low gas price is bad, Palin decrying negative campaigning, and the priest picking out one aspect of Christianity while ignoring the others.
Actually, I agree with Brad’s analysis. We are a reactionary society – especially our politicians. If we don’t have high prices to drive us, we may lose the impetus to go green. The uninformed voters who base an entire vote for president on an SNL skit or Palin sound bite simply don’t have the depth for preventative government.
Figure out a way to make the gas tax less regressive for poor folks–a tax credit, monthly rebate, a bus system that works–and I’m with you.
If we don’t have high prices “to drive us to go green”, that means the market is telling savvy consumers not to waste their time and money “going green”.
Norm,
It makes no economic or social sense to give tax credits to “the poor” to offset silly taxes that should not be in place.
If the price set by the market without much taxes is discouraging those who cannot afford the fuel from driving wastefully, isn’t that a good thing? Why encourage fuel waste with tax credits or cash vouchers?
Norm makes a great point. A $50 fill up is a much bigger proportion of the monthly budget of the low income earners. Friedman doesn’t address this.
Norm,
Why don’t you just tell me how much of my paycheck you want me to give to “the poor” and I’ll do that instead of passing it through the government middleman to skim its cut?
Give me a best guess of how many months (years) an additional $2.00 tax on gasoline would need in order to provide some return to the public. Can we agree it would be many months of paying money into the government before a dime was returned? How does the average American deal with the compounding impact of an increased gas tax on every single product they buy in the meantime?
And explain to me why energy independence is less important than a Federal Department of Education? or farm subsidies? or sending a hunk of metal to Mars? We need leaders who are willing to prioritize spending not just demand more from those who already pay more than their fair share. Saying “raise the tax” is the approach only someone without any common sense would propose.
Just like his national healthcare boondogdle, Brad can never provide anything approaching rational thought on how these pipedreams would actually work.
It’s pure thinktank drivel.
Even though I drive a fuel-efficient vehicle and live a half mile from the school where I work, I am delighted with the plummeting price of gas. Each dollar saved per gallon annualizes at $120 billion not being transferred from our pockets to the oil companies and the sheiks of Araby. Right now we’re at $240b + potential savings.
I do think that too many Americans have been living so close to the edge financially, literally spending every penny on mortgages and car payments, that ordinary expenses like fuel and food simply needed to stay within tolerable limits to keep from going under.
I, too, would like to see more fuel-efficient vehicles like my Toyota Tacoma straight-drive on the road, but right now the relief at the pump can’t come too soon for many Americans who saw commuting expenses go from $120 a month to $360+ from 2002 to 2008. Add to that the increased cost of transporting goods and providing services (like delivering pizza, for instance), and you have an intolerable situation: do I pay the mortgage this month or do my kids get to eat? Since the LTV ratio on the house is less than what is owed, many Americans began to feel trapped and just started to go belly up.
Capitalism needs judicious regulation if it is to work well. Although I am a lefty on political and social issues, I am very pragmatic in my economic thinking. Some of you may be familiar with Kevin Phillips (2005) book, American Theocracy, in which he decries the Republican Party’s abandonment of its conservative principles in favor of big oil, big debt, and fundamentalist religion. I revisited that book (I read it during my summer vacation prior to teaching econ. the following semester in my high school.) and marvelled at how prescient Phillips was.
I had begun to make adjustments in my own life in 2005 when I saw the price of gas start to take off. I stopped my long commute from Newberry to Columbia and subsequently traded in my F-150 for a Toyota Tacoma, selling my overvalued house at a profit while pocketing the profits, clearing all my debt, investing more money in my retirement, and then taking out CDs to save my cold, hard cash.
I live comfortably now in a nice apartment waiting to pounce on a house at a bargain price sometime next year.
But not everyone has been able to do as I have done. Still, I sensed all of this coming since I did not believe that federal overspending on the military to support our stupid overseas empire while cutting taxes was a wise thing to do. The American government has been like a family that overspends in relation to their income for years, and now must pay the piper.
So, I think lower gas prices will help us all breathe a bit. Oh, BTW, I was never happy with the bail-outs. Our government should not have given AIG, the banks, or anybody else their huge bailout. Perhaps a program at the family level to refinance and guarantee mortgages, but not a huge cash infusion to banks that are just using it to buy other banks rather than free up credit.
Well, at least I am comfortable and, as some of my friends have noted, Smug in my Assurances. 🙂
There are a couple disturbing facts about education; we may have less students graduate from high school this generation than the last (Education Trust) and since the 1970s the world has erased our enormous lead in college graduates (Race Between Education and Technology) – education has been the primary factor in determining our success.
Sadly, in the 06 State Super of Ed race, Brad and the state focused on debating the voucher issue rather than real reform.
Brad – Two things.
I’ve heard we don’t actually get our oil from Saudi Arabia. Most of it comes from Canada, Mexico, and Venezuela. If we consume so much less that it affects their bottom line, won’t it just balance out with China and India?
Second, if we set a price floor, what is to stop my local gas station owner or Exxon for that matter from raising its price up to the floor. Instead of the government getting the money for renewable energy, the private companies just take a bigger profit.
Doug
I honestly don’t want you to give a dime of your paycheck to the poor. Really. The discussion was about a gas tax designed to reduce consumption of oil. I support the idea if there is a way of designing it so that it does not penalize poor people disproportionately. Our income tax rates are set on a graduated scale for the same reason. The rise in gas prices this summer proved that increased prices will reduce demand.
I absolutely agree with you about energy independence. I never said anything to the contrary. It has been, and will remain for me, the most important issue of all. It impacts virtually every other major issue facing us as a nation. I am so serious about it that I drive an electric car to work every day. When teaching my daughters to drive, I stressed how to increase their mileage through driving habits as much as I did safety. I support nuclear power, solar power, wind power, biomass, damming up the rivers to produce power–whatever it takes to make the energy here at home. I’m not a big fan of increased drilling because the resulting benefit is miniscule in meeting our demands, but I don’t oppose it on environmental grounds (and I am a bit of an environmentalist).
If we’re just talking about taxes, then I like the idea of the Fair Tax if it is set up so that it does not penalize those with the least. I would much rather pay taxes on what I spend than what I earn or own.
One more point I forgot to make in my last comment. The first and easiest step toward energy independence is reducing consumption. We can reduce consumption by changing habits and increasing efficiency. We have a poor track record on both fronts of doing either one. Taxes can be a tool to encourage changes in behavior and to increase efficiencies in products being offered to us as consumers.
I saw a news article that even during the period of declining gas prices, gas consumption dropped 3%. That tells me that people are not reverting to their old habits, but are continuing to conserve.
The dropping price of gas and barrels of oil is great for us in the “Lower 48”. I saw Fox News’ Greta Van Something interview Sarah Palin back in her Wasilla home. Palin said that the price for oil barrels is bad for Alaska because that’s how they fund state government and give money to Alaskans. Services may have to be cut in Alaska with $60 barrel oil. Gov. Sarah says gas is higher in Alaska even though they drill it and refine it.
The tenor of this blog reinforces my belief that we (the US) are terrible problem-solvers. We are too lazy to consider multi-faceted solutions – we want quick, simple answers to hard questions. We think majority-supported thinking leads to good solutions. Unwise. The best answers to hard questions are usually held by a minority who do the grunt work to understand the problem. We jump from one quick, simple, and wrong solution to another based on over-simplified and often self-interested persuasion. We only want to listen to those who agree with us or offer us something (pander), and demonize those who would challenge our ideas. The energy crunch is a price crunch, not a shortage, and is a complex issue. Many of the best solutions are things we do not want to hear about, because they require discipline such as (conservation), inconvenience (mass transit), shared responsibility (taxation, CAFE standards), and social responsibility (lowered speed, lowered thermostats, smaller cars).
Give ’em hell, Harry. Or give them the truth and let them think it’s hell.
Norm,
Thanks for the clarification. I also support Fairtax. We need to simplify the tax system and set a maximum limit that government can take. From those revenues, the government should then prioritize the needs of the country (long term and short term) and then prioritize appropriately. If lobbyists for one cause take X%, that means there’s X% less for other lobbyists to take. Instead, our current system allows the government to just say, “Okay, instead of X%, we now want X+Y%”.
We are spending billions of dollars on technology for defense, NASA, etc. that could just as well be re-focused on an energy policy that drives us toward independence. It’s all about priorities and which lobbyists pay off the most politicians.
I saw gas in Newberry for $1.82 today. I expect it to go lower, but I don’t think it will help boost consumer spending. People are using the money they’re saving at the pump to get caught up on their bills.
I still maintain that the energy cost crisis that we have been experiencing the last few years is the straw that broke the economic camel’s back. With so many other things going wrong economically, we just could not afford it.
If prices stay low, the economy might pick up, but remember that 2/3 of the money we spend on energy is spent right here in the good ole USA! Louisiana, Texas, Oklahoma, and Alaska all benefit just as much as does OPEC when gas prices rise, even as the rest of the country suffers and energy costs risk killing the capitalist goose that laid the golden egg of prosperity.
The economy will continue to slide towards a recession as long as Obama and the Democrats threaten to tax the Productive Class, and continue to devalue the dollar by running monstrous budget deficits.
The only way to revive the economy is to not implement any of Obama’s stupid Marxist campaign platform, and to abolish many of the Democrat programs which created this economic collapse, starting with FNMA and FMAC, and including Medicare, Medicaid, and Social Security.
Of course the socialists will not do that. Just as they did under FDR, they will blindly pursue their Marxist ideology, and blame ever one of their failures on “the failure of capitalism”.
Obama and Biden give almost NOTHING to charity.
Looking at Obama’s charitable giving in since 2000 based on his tax returns, we find that Obama consistently refused to follow his own advice to “spread the wealth” when he had the opportunity to do so. This is especially true in years when he made nearly $250,000 or more. . . . [F]rom 2000-2004, Obama’s charitable giving was less than 1 percent.
His contributions increased after his book deal, to a maximum of 6.1% of income in 2006.
In previous years, Obama made $50,000 as a state Senator, his wife Michelle made $360,000
for sitting on the board of a hospital, and they gave less than $1,800 to charity.
Obama’s running mate, Joe Biden, was even stingier about spreading his wealth. When his tax records were released in September, they revealed that over the past decade he had only donated an average of $369 each year. In 2007, his charitable giving was only $995, or 0.3 percent of income in a year when his tax returns reported $319,853 in income.
By comparison, John McCain gave more than one-quarter of his income in 2006 and 2007 (28.6 and 27.3 percent respectively). And according to the New York Observer, since 1998, he has donated royalties on his books totaling more than $1.8 million.
Governor Palin gave more in 2007 ($3,325) & 2006( $4,880) than Biden ($995) and Biden makes more money but history shows he likes to hog the wealth, just like the pandering Obama. Biden’s average giving for 10 years was $369 per year.
Source: FEC filings and tax returns.
Socialism: “A theory or practice . . . which advocates the vesting of ownership and control of the means of production . . . in the community as a whole.” (Source: Random House Dictionary)
“Ms. Patterson’s recent article claims that Gov. Palin was practicing socialism when she rebated $ 1,200 to each person . . . What she may not know is that Alaska is different from other states in that they own the oil.” (Source: Letter in Aiken Standard, 11/17/08)
Priceless!
The payments to citizens of Alaska a portion of the royalties from oil extraction, has been a practice for decades preceding Governor Palin. Like many of the Western states, Alaska negotiated retention of mineral rights and other land uses, such as grazing and mining, as a condition of statehood.
This is not socialism.
Socialism confiscates private wealth and redistributes some of it to greater numbers of people to buy political support, among its other characteristics.
For Alaska to own the means of production, such as building a pipeline, could be viewed as a socialistic enterprise. The ideal approach would be to have such projects be as privately funded as possible. In the case of Alaska, where the state and federal government own almost all the land, this is difficult to do.
Alaska has far more revenue than it needs to run its government, so it rebates the excess to its citizens.
All other states also have far more money than they NEED to run responsible government. Some have no income taxes. Most just keep piling the taxes on and wasting more money.
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