First was this picture in the San Francisco Chronicle, of a ‘Pray-in at San Francisco gas station asks God to lower prices’. I almost choked!
Then came Hillary Clinton and John McCain’s joint request for a “gas tax holiday“:
Hillary will impose a windfall profits tax on oil companies and use the money to temporarily suspend the 18.4 cent per gallon federal gas tax and the 24.4 cent per gallon diesel tax during the upcoming peak summer driving months.
I understand Hillary is trying really hard to get elected, but still . . .
I have to join Thomas Friedman in his ‘Dumb as we wanna be‘ lament:
The McCain-Clinton proposal is a reminder to me that the biggest energy crisis we have in our country today is the energy to be serious – the energy to do big things in a sustained, focused and intelligent way. We are in the midst of a national political brownout.
At the roots of this environmental policy fiasco is a lack of understanding of some basic economics principles, and malicious efforts on the part of politicians to appeal to the crowds’ dumbness. Maybe someone should take the time to explain, in plain English, why artificially lowering gas prices is not such a good idea. Robert Reich summarized it best:
McCain and HRC are proposing a tax holiday on gas – so this summer you wouldn’t pay the 18 cents a gallon that would otherwise go to Uncle Sam. Talk about dumb ideas. This will only encourage Americans to drive more, thereby increasing demand and causing gas prices to rise even higher. Driving more will also put more carbon dioxide into the atmosphere, which fuels global warming. And this will cost taxpayers some $10 billion. It’s a cheap political gimmick that does nothing to stem the rising price of oil.
Someone needs to sit down with Americans, and treat them as intelligent people, and explain how things really work. The answer is not in lowering gas prices. The real solution is in conservation, and learning new ways to deal with gas, as in carpooling, driving less, biking, walking, taking public transportation, shopping less, better planning, living more locally, buying more fuel efficient cars, etc.
I blogged about this when McCain first proposed it; talk about idiocy in government.
I did have a conversation with a friend of mine which highlighted the controversy over the gas tax holiday. I was ranting about the increased demand for gas and the concurrent increase in CO2 emissions that a gas tax holiday would cause. My friend Tom understood the issue, but stated simply that “I’d like to be able to get to work without paying $60 a week in gas.” My friends and I would probably be considered “working poor,” so often it’s a compromise between getting to work and being able to eat off what’s left of your paycheck after gas. I just happen to be lucky that I’m close enough to bike or walk to work.
People with the least discretionary spending (e.g. the poor) are obviously hurt the most by the higher fuel price. An income-tax break would do wonders for this group, and still keep everyone aware of the high pre-tax cost of fuel.
A large number of economists agree that gas taxes should be raised, in favor of lower income or corporate taxes.
See
http://en.wikipedia.org/wiki/Pigovian_tax and
http://en.wikipedia.org/wiki/Pigou_Club
“If lower income individuals tend to spend a greater portion of their income on the product with external social costs, such as cigarrettes or electricity, then the corresponding Pigovian tax is regressive.”
The higher pre-tax costs of fuel could be compared with a higher gas-tax, so if you’re concerned about equity, you need to compensate the poor for this.
I hope that will be Obama’s proposal. Doing nothing hurts the poor the most.
Meryn, your suggestion has merit. Unfortunately, people in the higher income tax brackets and large corporations are the one who have the money to lobby government for tax breaks. The poor don’t have the time to lobby or the money to grease the wheels.
And the thing that really pisses me off about the tax holiday is that it offers a false hope; the idea that if we can just get through this recession with a gas tax holiday, there are better days ahead. But it doesn’t work like that.
I don’t mean to pick on you Meryn, but words like “people with the least discretionary income” remove us from the hard facts of the situation – the decisions poor people face every month when bill time comes around. “Should I pay the medical bills and taxes? If I don’t then they’ll garnish my wages. But if I do, I won’t have enough money to get to work and buy food.”
And with limited public transportation systems, their are no options for them other than to pay for gas.
We need to offer the public some real hope – not just this stupidity that McCain and Clinton throw out there trying to get elected. They aren’t dumb – they just don’t have any options.
I’m on board with this, but I guess I just don’t want to be the one to tell Tiny Tim that Santa Claus is dead.
Sorry for the rant.
“I don’t mean to pick on you Meryn, but words like “people with the least discretionary income” remove us from the hard facts of the situation”
Point taken. I sometimes fail to realize that many Americans are highly indebted. What’s more, I actually don’t have a clue how tough life for them is. It must be much worse than in The Netherlands, but how bad, I don’t know.
Let’s just keep it at that some extra monthly after-tax income would be really nice for them, certainly with these high gas prices. This could be paid from the proposed wind-fall tax.
It may seem a little strange request, but would you be able to recommend me a good book (or articles?) on the American lower-class? I think I need to read up on that.
There are many books, but (although they weren’t completely poor) I’d make sure to read, or watch on DVD, Miller’s “Death of a Salesman.” There’s a great version with Dustin Hoffman.
Sorry Meryn, I can’t think of any. All I have is some real world knowledge; maybe it will help.
When you apply for a job here, most applications ask the question “Do you have a reliable means of transportation?” I’ve always translated this to mean “Can you get to work SOMEHOW (bus, walking, bike, etc.)?” But for employers this means a car. Every job interview I’ve ever had has asked me “Do you have a car?” If you don’t have a car, or a car is not your primary means of transportation, you don’t get the job. Period.
I grew up on a horse farm, and we had a neighbor who everyone called Junior who grew wheat, corn, and soybeans. He was always the first person to call whenever I got the tractor stuck or we needed an extra hand. He retired at 77, and within two years he was working as a bag boy at a grocery store to make ends meet.
One of our recent employees at my job, Brandon, was trained and started work. I talked with him one day about what he was going to do with his first paycheck. He pointed to the crease on the toe of his nearly-new shoes and said that they needed to be replaced; he needed a new wardrobe. He didn’t show up to work one day, and a few weeks later he was in the newspaper; he’d had been arrested for armed robbery. He is 19 years old.
My friend Tom, who I mentioned earlier, lives with and takes care of his grandmother. His job is across town, and he ends up paying $60 a week for gas. There is no public transportation that he can take for where he lives and works. He could move closer, but his grandmother would have to live alone. She doesn’t want to leave the house her husband built her and where she raised her family.
There should be buses, carpooling meetups, trains, all over the place. Public transportation infrastructure needs to become a top priority at all levels, local, state and federal. Employers should be given subsidies for facilitating carpooling options amongst their employees. I am aware of such subsidies here in California, and I know some of the large Silicon Valley companies outsource carpooling to specialized vendors. I don’t know about the rest of the country.
Certainly in rural areas and in small towns, things are not so easy to organize although I am sure that can be done. I can remember my younger days back on my grandparents’ farm in France. There was a daily bus that would pick up workers twice a day and stopped in all the villages along the way to the major city where the jobs were. Cars have replaced the bus. We need to go back to a good bus/carpooling system, with subsidies to encourage people. Until better times, when cheaper and more widespread technology exists that will make electric cars an option for all.
A few months ago, I felt pretty good with the fact that, somehow, all three major presidential candidates were claiming that they saw global warming as an immense and important problem, to be addressed.
Then I started becoming uneasy. I think my mini “celebration” was too soon.
This latest notion, i.e., the summer-gasoline-tax-holiday idea, suggests that two of the three candidates may not really understand the global warming problem and/or that they both have some important screws loose? (Sorry for the critical wording.)
In my view, the facts seem to (strongly) suggest that, if we want to seriously begin to address global warming, we have one choice, and his first initial is B.
What does this mean, in my view? It means this: If we want our bicycle riding, new lightbulbs, personal recycling efforts, and other personal actions to matter in the larger context, we’d better first vote for B. (This is my two cents, of course.) If a candidate other than B wins, there’s a very big question (in my mind) about what that might mean for large-scale action on the climate front.
If this is the case, then now’s the time to call your local representative and get your “B” hats and signs.
Yes, God wants us to have cheap stuff
Jeff, you’re making the same mistake Americans always make – putting it all onto one person. One person, the US President, cannot force anything good or bad to happen all by themselves. Everything needs the consent of another few hundred people at least, and those are all influenced by thousands, who are influenced by millions, and so on.
If you were going to put it all onto just one person’s individual character and ideas then you may as well have kept the British monarchy of 1776. But wisely you rid yourselves of it.
Write to your councillors, state reps, federal reps and senators, and all the candidates, too. As I understand it, you’ll be voting for your federal congress at the end of this year, too. Which, you know, is the body which will actually pass or block the laws you’d like to see.
One person, yes, even the US President, can only do so much – good or bad. Don’t rest all your hopes and fears on that one person.
Kyle, this is why educating the crowds is so important. A big part of the problem is the widespread misinformation, and lack of understanding on issues such as basic economics, climate, and science in general. Since people learn best on an as needed basis, blogs and mass media have a huge role to play here. The issues keep on evolving, and need to be addressed as they arise. Every day brings up new problems, new opportunities to enlighten the public.
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