The McCain-Clinton Gas Tax Holiday proposal is a monumentally bad idea and just another example of the short-sightedness of these two candidates.
Do people care? I am not sure.
We have a knee-jerk, band aid fix that will arbitrarily force down the price of gas encouraging Americans to drive more over the summer. I am no economist but in a situation in which we are already dealing with supply and demand factors driving up the cost of gas, contriving a fix will do nothing to help with our actual situation..or in the more eloquent words of Krugman from the New York Times:
It’s Econ 101 tax incidence theory: if the supply of a good is more or less unresponsive to the price, the price to consumers will always rise until the quantity demanded falls to match the quantity supplied. Cut taxes, and all that happens is that the pretax price rises by the same amount. The McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers.
Krugman goes on to say:
So it’s Econ 101: the tax cut really goes to the oil companies.
Hillary is saying she and McCain’s plan will help the people of Indiana and America, but what she really does is put more money into the pockets of big oil, even with her excess profits tax on oil companies. We the people get nothing but another empty promise and your friends in oil and gas get to buy more Cadillacs.
Who is Hillary really helping with this moronic idea? How about terrorists? Here’s a bit from Jonathan Alter in Newsweek:
Hillary Clinton has now joined John McCain in proposing the most irresponsible policy idea of the year—an idea that actually could aid the terrorists.
Clinton, the sniper-fire dodging candidate, is offering help to terrorists and tyrants. Alter is just getting warmed up there though. He goes on to criticize the abject stupidity of the idea:
Not one respectable economist—and not one environmentalist or foreign policy expert—supports the idea, unless they are official members of the Clinton or McCain campaigns (and even some of them privately oppose it). To relieve suffering at the pump, send another rebate check or provide tax credits or something else, but not this.
Why is this gas pander so bad? Let me count the ways:
* It’s a direct transfer of money from motorists to oil companies, which are getting ready this week to again report record obscene profits. If the federal excise tax were lifted, oil companies would simply raise prices and pocket most of the difference. Clinton’s proposal to recover the money with a windfall profits tax on oil companies sounds nice but won’t happen. That tax was easily blocked by the Senate in December and would likely be blocked again.
* It offers taxpayers only peanuts. The American Association of State Highway and Transportation Officials says the average savings to motorists this summer would be a total of $30. Did I miss something, or was that measly number somehow not included in Clinton’s explanation of her support?
* It sends more hard-earned money to the Middle East, which is terrible for our national security. Remember, 15 of the 19 terrorists on 9/11 came from Saudi Arabia. How did they get the terrorist training? The madrassa indoctrination? Oil money.
* It worsens global warming by encouraging gasoline consumption. When you flee your house in 2020 because of flooding, remember which politicians pandered.
There is no silver lining here and no cause for celebration. It is worse for security, worse for the environment ultimately DOES NOTHING TO LOWER THE PRICE OF GAS in the long-term. However, in the short-term you car-driving maniacs out there will save $30.
$30.
In LA there are bars where that will not buy you two drinks. Is that worth the risk and the expense? Isn’t that just thick-headed pandering in a desperate attempt to get votes from an uninformed and trusting public?
Want to hear something really crazy? The industry you would think might support some sort of lowering of gas costs, the trucking industry in America, also thinks it’s a bad idea. Here’s an excerpt from Sam Stein on the Huffington Post:
UPDATE: Even the American Trucking Association, the group the Clinton camp says is most favorable to it’s idea, offers a tepid thanks but no thanks. From the group’s spokesperson:
ATA appreciates the effort and supports the proposals. But we do have concerns that any fuel tax suspension proposal could damage the already ailing Highway Trust Fund. To the extent that McCain and Snowe’s proposals use general revenue funds to offset the hit to the trust fund, that concern is addressed. ATA did not ask for this legislation. And we believe it is only a very short term answer that does not do anything to address the longer term issue of rising fuel prices. ATA recognizes that rising fuel costs have a disproportionate impact on small trucking companies where even a small savings can be the difference in their staying in business.
Even an industry entirely rooted in the supply and demand chain of gas prices thinks it is a monumentally pathetic idea, short-sighted in nature and damaging to future interests.
Wow.
There is no expert support or endorsing of this idea whatsoever, even from those with very vested interests.
Hillary has accused the oil companies of market manipulation, but much like her Bosnia experience, she needs to take a deep breath and get her story straight. Oil is expensive right now because oil is scarce, real scarce. For every one barrel we produce globally we consume three. There is a fantastic article on the Telegraph about this. If you read nothing else for the rest of the day, read that article. Here is something from the article that should make you shudder:
The idea that oil companies are somehow ‘to blame’ for record oil prices and rising fuel costs is seductive but absurd. For all their power and profits, the international oil companies are in fact in trouble. They may still be swimming in cash, but no longer in oil. Despite vast investment in exploration and production, these days they generally fail to replace the oil they produce each year with fresh discoveries, or even to maintain current levels of output.
Hillary is dead wrong, again. We cannot even maintain our current levels. The time for cheap gas is gone for good no matter what Hillary or McCain try and sell us and there is nothing they or the oil companies can do about it.
Don’t buy it - think for yourself. We have candidates trying to get elected who are throwing out short-term solutions that they say promise to save you money. Walk away from their empty promises and their campaign-speak.
It is time for real solutions that are probably going to hurt. Progress often does, but progress will take us beyond the vacuous words of a desperate and dying campaign and in the direction of a better means of living. Real progress, real change is possible but we have to start thinking for ourselves and behaving responsibly.
It is that simple, but it will not be easy.