<body><script type="text/javascript"> function setAttributeOnload(object, attribute, val) { if(window.addEventListener) { window.addEventListener('load', function(){ object[attribute] = val; }, false); } else { window.attachEvent('onload', function(){ object[attribute] = val; }); } } </script> <div id="navbar-iframe-container"></div> <script type="text/javascript" src="https://apis.google.com/js/plusone.js"></script> <script type="text/javascript"> gapi.load("gapi.iframes:gapi.iframes.style.bubble", function() { if (gapi.iframes && gapi.iframes.getContext) { gapi.iframes.getContext().openChild({ url: 'https://www.blogger.com/navbar.g?targetBlogID\x3d5529474\x26blogName\x3dDimmy+Karras\x26publishMode\x3dPUBLISH_MODE_BLOGSPOT\x26navbarType\x3dSILVER\x26layoutType\x3dCLASSIC\x26searchRoot\x3dhttp://dimmykarras.blogspot.com/search\x26blogLocale\x3den_US\x26v\x3d2\x26homepageUrl\x3dhttp://dimmykarras.blogspot.com/\x26vt\x3d2234159095245132931', where: document.getElementById("navbar-iframe-container"), id: "navbar-iframe" }); } }); </script>

Wednesday, May 19, 2004

Gasoline Hysteria

Some people who think the New York Times is unabashedly in John Kerry's corner should read today's lead editorial. The Times unloads on Kerry with both barrels, absolutely trashing his proposal with regard to the Strategic Petroleum Reserve.

Senator John Kerry, the presumptive Democratic presidential nominee, knows this, of course, and he demeans the seriousness of his own candidacy when he suggests that President Bush could single-handedly bring down fuel costs. Senator Kerry has urged the administration to stop buying oil for the reserve, as if that would make a difference. Fortunately, some residue of shame has kept him from joining the other Democrats calling for the reserve to be raided. The government's oil purchases have taken place at a time of higher prices, but they are not a major cause of the increase.

The Times is entirely correct here, and it's refreshing to see the paper hasn't fallen into the knee-jerk response of supporting Kerry's call that I've seen in some parts of the liberal blogosphere.

The plain fact is that the United States has absurdly low gas prices to begin with. By encouraging less driving in the short run and the purchase of more fuel-efficient vehicles in the long run, higher costs at the pump can help the US achieve several important national objectives: energy conservation, environmental protection, limiting road congestion, cutting our dependence on foreign oil, etc. This is why the vast majority of academics and policy analysts in this area have been favoring a large increase in gas taxes for years, something that is politically unthinkable for a host of complex reasons. Instead, we have the corporate average fuel economy standards--requiring manufacturers to meet miles per gallon targets--that bring about less actual conservation by not cutting the marginal cost of driving while also distorting the market and costing more than a simple tax would.

Kerry's new proposal worsens matters by giving voters the false impression that the president has the power to maintain a low price of gasoline. In doing this, Kerry will presumably delay the beneficial effects of rising gas prices outlined in the previous paragraph, all to promote a fantasy-land vision of low fuel costs forever that he hopes will help him in the election. The Republican approach of letting supply and demand take their course is clearly superior here. I've seen some blatant political opportunism by Kerry before, but this case, with the deleterious consequences that may result, may take the cake as the worst.

UPDATE: Well, I guess this post violates my no-Kerry-bashing post-primary rule. But it's about policy, not his personal style, so that's how I'll justify it. While Bush may be right in this particular instance not to intervene on gas prices, I will say that neither party gives me a reason to vote for them on energy issues. The Republican energy policy largely consists of giving tax breaks to campaign contributors, while the Democratic energy policy largely consists of prolonging and tinkering with ineffectual regulatory regimes. Even Nader has been a chief backer of CAFE from its inception, so he's useless. In short, vote on the other issues because everyone sucks on this one.