Clinton on gas prices
Topics: Campaign2008
02 May 2008
From: Ervan Darnell
I was listening to a Clinton stump speech on energy on XM channel Potus
this morning (5/2/08). It amazes me how she can be wrong about
absolutely everything. You'd think a random idiot would be wrong only
half the time on yes/no propositions. Here were her proposals:
1) Change anti-trust law to sue Saudi Arabia.
2) Lower consumer gas taxes and raise oil company taxes.
3) Investigate futures traders for price fixing.
4) Open the strategic reserve.
Here's why this is broken:
First, I thought Democrats were concerned about global warming, and the
over consumption of gasoline in general, and thus wanting to ween us off
of gasoline? Rising prices are a good thing. Indeed, a carbon tax is a
favorite Democratic proposal (though I don't know if Clinton has agreed
to it). That is a way to raise gas prices. But now a little bubble in
gasoline prices and Clinton is all about regulatory authority to deny
supply and demand.
As to the specifics:
1) Funny, I thought Saudi Arabia was a sovereign country. I can just
see the reaction when we tell them a U.S. court them guilty of anti
trust, we want a $1T fine, and demand they break up their country into
little pieces.
2) To first approximation, this does nothing. It just hides the tax
elsewhere. It's a common liberal fallacy that business taxes come out
of profits and not prices. But on closer examination this is worse than
doing nothing because it weakens the link between gas taxes and road
work, and instead converts them into general welfare payments. And,
then, the consumer gas tax will return. That's not to say that the oil
companies have exactly a level-playing field tax structure. But this
sort of tax rotation doesn't do anything useful regardless.
3) This is just naive. Oil prices are up because demand is up
(especially China) and because the U.S. dollar is weaker (and oil is
priced ultimately against a basket of international currencies). Trying
to punish futures traders will only make the situation worse. It's
shameless scapegoating. (Incidentally, I'm weary of liberals blaming
gas prices on the Iraq War when there is no obvious connection, indeed
Iraq was partially prohibited from selling oil before, and now it can,
so, if anything, the Iraq War has brought down oil prices).
4) This can't work. First, is it a strategic reserve or isn't it? If
it's not, get rid of it. If it is, we shouldn't squander it for
trivial political reasons. But even if sold now and repurchased later,
it pushes down the price a tiny bit now and raises it a tiny bit later.
So what? Doesn't make any difference in the long run.
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