What Alternative Energy Policy?

Tom Friedman nails both Clinton and McCain for their pander bear move on eliminating gas taxes for the summer.

Hillary Clinton has decided to line up with John McCain in pushing to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for this summer’s travel season. This is not an energy policy. This is money laundering: we borrow money from China and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks. What a way to build our country.

The amount of stupid political posturing over this issue is truly mind-boggling. Here we are moving towards oil at $5/gallon and say anything for a vote politicians are trying to raise our consumption of gas. As Peter Schwartz of GBN says, “Maximize demand, minimize supply and buy the rest from the people who hate us the most.” What a way to run a country.

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0 Responses to What Alternative Energy Policy?

  1. JR says:

    Priceless photo!

  2. Dan says:

    It’s the photo of her with Scaife that really tells the story.

  3. Morgan Warstler says:

    “But regardless of the legislative realities — not to mention the futility of promising short-term decreases in gas prices — Democrats have embraced a political opportunity. By proposing aggressive legislation that takes on the boogeymen of the oil tycoons and profiteering speculators, Democrats are trying to corner Republicans into choosing between a president who is chummy with the oil industry and a decidedly populist energy bill.”


    Hopefully, the Dem Congress gets Jon’s message.

  4. STS says:

    What a way to run a country, indeed.

    At least HRC is taking back with the right hand what she offers with the left — guaranteeing herself an excuse for this dumb idea never being adopted. Matthew Yglesias posted on this last week. Here’s Hillary’s “out clause”:

    She said she would “also consider a gas-tax holiday, if we could make up the lost revenues from the Highway Trust Fund,” which the federal gas tax supports. She didn’t specify how those lost revenues would be recovered.

    Good thing this won’t happen because while it sounds sort of like economic relief for consumers, most of the savings would go to the suppliers. Krugman spells it out here.

    Meanwhile, it looks like Jon’s prediction of positive nominal growth came true. Not quite the way he predicted, with “real” growth negative but nominal positive. But if you take account of the weird way we measure inflation lately, it might amount to the same thing. Barry Ritholtz is your man for the “ex-inflation there is no inflation” report.

  5. Rachel says:

    Right you are, STS. In Australia two years ago the Conservative Government, in a fit of panic at falling poll numbers, reduced the excise on fuel. After a brief (2 week) decrease, it ended up making not a whit of difference to the prices consumers paid – the distributors (Caltex, Shell) pocketed the increased margins, and their profits rose by a corresponding amount.

    Gasoline stands at US$1.44 per litre in Sydney right now, which is $5.46 per gallon. It’s $5.54 in Paris, and US$6.48 in Amsterdam. Y’all should stop whining about gas prices.

  6. Rachel says:

    Ouch. That last comment about whining makes me sounds like the anti-Morgan. I’m going to take a break for a while.

  7. John Hurt says:

    Let’s face it, Americans are a bunch of penurious, miserly, niggardly, parsimonious, penny-pinching, close-fisted cheapskates.

    Break over, Rachel. Your serve.

  8. Rick Turner says:

    Most of the modern USA was built upon the idea of cheap gas, fast cars, and suburban living; most of Europe was not. Australia is somewhere in between, in part because the livable part of the country is pretty near the coastline all the way around. Tasmania is an exception, though there are still huge areas that are very sparsely populated. So the US will need a massive make-over as far as living and working and commuting goes in order to transition away from the automobile. Not many people outside the US realize what a pain in the ass it is to try to live as we do and use public transportation. At one point I lived in Petaluma, but ran a cabinet shop in China Basin in San Francisco…a good forty mile commute. The only way it worked for me to use public transportation was to have two vehicles…a car that I kept in Petaluma, and a pickup truck that I parked in San Francisco near and express bus stop. Othewise it would have taken about two hours each way if I’d had to use public transportation the whole way. As a drive it was just over an hour if I stayed on either side of rush hour.

    The only way to change this is to change zoning laws so living near work is possible. Dual use buildings, mixes of office, industrial, and residential in what are now business and industrial ghettos, going high rise to cut down suburban and urban sprawl, putting the really needed shops like grocery stores near homes…these zoning practices must become more normal. Work should not have to be more than 30 minutes from home, and that distance should be “doable” with pure, modest electric vehicles whether they be private cars or public transport.

    If you look at Colonial America, you’ll see shop keepers living above their stores, manufactories close in to where people lived, and later you see boarding houses and company towns, though that was all horribly done.

    I currently live in a small apartment at my workshop in a neighborhood with three grocery stores, a hardware store, a couple of bakeries, and several fine restaurants well within walking distance, and it’s great. There are many days I never get into my car, and when I do it’s usually not more than a ten mile trip unless I’m doing a major drive. This is doable…but it’s not the usual American dream…which is all over except for the funeral.

  9. zestypete says:

    Having grown up in Montreal and now living in London (UK), one thing I noticed was the difference an effective public transport system can make for the kind of distance living that Rick is talking about.

    In Montreal, a car would always get you where you were going faster, no matter where you were going. Public transport was limited to slow buses and irregular trains making loads of stops from the suburbs, as well as a small metro system to get you around within the city centre.

    In London, public transport will often get you there faster than a car (in part due to congestion, in part due to the road patterns being convoluted and stretching back a few thousand years when horses, walking and narrow streets were the norm). For example, I can get from home to work in 45 minutes, door to door, by public transport. A car could take me over an hour one any given day, and during the working week I’d have to pay £8 for the privilege (congestion charge). Buses have bus lanes, trains run regularly and the Underground is vast and fast.

    The only problem? Public transport costs are rising. There could come a point when I could save money by driving, but I probably wouldn’t because of the time savings I make for a while at least. If that tips too far the other way, you can be sure I’d consider my car (or a bike – that’s the other option picking up the pace).

    So the question is this: if you save money by taking public transport but it costs a bit more time than taking your car, do you still take the public transport?

    And vice versa, if you save time by taking public transport, but it costs more in money than using your car, do you still take the public transport?

    Are people willing to spend a bit more to save a bit on time? Or spend some of their valuable time to save on cash money?

    Or is neither a consideration and is it still all about fast cars and convenience (the car being right outside your door), actual cost in time or money be damned?

    I’m just wondering where the current US mentality lies. As for London, I’m seeing more scooters and bicycles than ever before, and I haven’t heard anyone complaining about the cost to fill up their cars…

  10. Dan says:

    What I’d like to know is why there are such wide disparities in gas prices. Are the prices higher because of higher production costs? Higher distribution costs? Taxes? Tariffs? If primarily taxes, do the taxes just get dumped into the General Pork Fund, or are they used to develop alternative energy sources? What is the range of stories in the various developed countries of the world?

    I can already hear Morgan having an aneurysm, but I’d gladly pay more for gas *if* the money went toward the development of genuine alternative energy sources. But I have my doubts that we can do anything with a gas tax in this country that doesn’t immediately degenerate into handing billions of dollars to billionaires in exchange for nothing, or that doesn’t result in politicians simply grabbing the money and using it to build bridges to nowhere, with a lick and a promise that they’ll put the money back with all of the great economic benefits that the bridges to nowhere are certain to generate.

    Somebody convince me that I’m too cynical.

  11. Morgan Warstler says:

    Dan you are too cynical.

    Investment in alt.energy needs to and will come from the private sector. And the only thing we need to do to make that happen is make it advantageous for investors to invest their money in alt.energy.

    First let me be clear: when you think about the “rich” investing, realize that pension funds are a serious part of the investment class. CALPERS alone is $240B.

    Right now, investors are parking their money in commodities futures. The cost of food and oil is higher because of demand true. And biodiesel is probably helping cause that problem, but all of these prices are are higher right now, because investors are betting the prices will be higher – and they need somewhere to put their money.

    What I want to do, is let alt.energy investment losses be tax credits, maybe also allow 0% capital gains taxes from alt.energy investments. Instead of trying to hit this problem with a government stick, we need to dangle more carrots. There is nothing to stop the next 8 years from being an alt.energy boom. Solar, nano, nuclear, wind, conversion to these systems is real jobs here in the US. This is a very patriotic effort, it helps us weaken our enemies. We can actually solve this problem without me having to have an aneurysm.

    The market has very little respect for the government, because deficit spending causes inflation. And inflation destroys savings. And whether everyone gets mad at me for saying it or not, Repubs intentionally deficit spend, so Dems can’t promise bennies for votes. We need political-economic detente, the rich have to accept that the poor will have their pound of flesh, and the poor have to accept that they cannot kill the golden goose. There is a $MAX we can take, and thus, there is a $MAX we can give.

    We really need to force politicians to live within their means. If you can’t get votes making promises within a balanced budget, then you are a thief. We have to respect the next generation economically. Taking 40% of a rich guy’s income is fine. Taxing what people consume is fine. But taxing money people make from their investments gives them incentive to consume, not to save. Deficit spending is the same thing. Inflation gives people the incentive to consume.

    Imagine that we want our greediest rich to live the lives of paupers, because they never take a payday, and never buy a new toy. Sure they have billions, earning billions, investing in billions, never being taxed – but they don’t go buy two gold jets because that gets taxed. They don’t go buy a $1000 haircut, because the salary they took to pay for it – that gets taxed. The over-arching effect is less consumption, which you really really want.

  12. John Kelly says:

    Well said Morgan.

  13. Dan says:

    “Repubs intentionally deficit spend, so Dems can’t promise bennies for votes”

    You don’t suppose that Repubs might also like to spend just a lil’ bit o’ pork in their own home districts, do you? As opposed to doing it only to strive bravely and nobly to keep Dems from implementing a Marxist nightmare?

  14. Dan says:

    I’m not sure what buying two gold-plated jets has to do with investing in alt.energy.

    (Except, of course, that I fear that investing in alt.energy will result in billionaires buying two gold-plated jets.)

  15. Dan says:

    “We really need to force politicians to live within their means. If you can’t get votes making promises within a balanced budget, then you are a thief. We have to respect the next generation economically. Taking 40% of a rich guy’s income is fine. Taxing what people consume is fine.”

    This much I agree with. However if you can get politicians to live within their (our) means it will be a first. We keep electing thieves, and I don’t see that changing.

    0% capital gains sounds too low to me. Lowered for alt.energy, but not zero.

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