So much for the prospect of an election based on real issues. With Obama and McCain as our major presidential candidates, some pundits expressed hope in the possibility of a high-minded campaign that really engaged on the issues instead of devolving into insinuation, insidious name-calling, and unsubstantiated innuendo.
Recent events seem to show that we're in for another three months of mudslinging. The McCain campaign has run ads accusing Obama of ignoring hospitalized troops in Germany because he couldn't bring cameras into the facility. This accusation has been shown to be false, and was only reluctantly admitted to by the campaign (which blamed the press for being unclear about the matter instead of doing any fact-checking on its own). The McCain campaign has run ads blaming Obama for high gasoline prices, as if a very weak dollar, an absence of any energy policy for the past decade, and a vehicle fleet that uses the stuff at far higher per-mile rates than Europeans do had nothing to do with the price at the pump--and never mind that Obama has been in federal office for less than four years and is only one of 535 legislators.
McCain has accused Obama of wanting to raise "your" taxes, even though Obama has proposed raising income and Social Security taxes only on the "you" who make above $250,000. And McCain and his surrogates repeatedly argue that raising taxes would kill off economic growth, despite the clear example of the early 1990s that the slightly higher income tax rates and substantially higher capital gains tax rates during the Clinton administration were no serious impediment to substantial and uninterrupted growth, even pre-tech bubble.
Most serious, in my opinion, is the McCain campaign's repeated call for drilling as a solution to high gas prices. Can McCain really think that drilling for oil that won't come onto the market for seven years will have any significant impact on prices today, especially when many analysts say it won't even have a significant impact when it does come onto the market? Never mind the adverse affects that our continued oil use has on our economy, our foreign policy, and the environment.
McCain says he'll balance the budget, but his numbers don't come close to adding up since he doesn't cite budget cuts to offset his tax cuts.
Oh, and the latest: McCain ads criticizing Obama for being popular, comparing him to Brittney Spears and Paris Hilton. The ads as: Is Obama ready to lead? Of course, they provide no facts to explain why he wouldn't be able to lead, or why McCain would be a better leader. They are innuendo without content.
Though the Obama campaign has responded, I'd like to see a harder-hitting answer that goes after McCain's credibility and moves the discussion back to the issues. When McCain says Obama is going to raise the taxes of most Americans, it's simply not the truth. When McCain says Obama's modest and targeted tax hikes will hurt the economy, it's just not necessarily the case. When he says Obama has caused our oil problem and drilling is the answer to high gas prices, he's just wrong on the facts. When McCain says he'll balance the budget despite his hundreds of billions of dollars in tax cuts, he should be forced to tell us what spending cuts he'd propose to achieve that goal. (Obama should have to defend his budget numbers as well, though at least he doesn't pretend to balance the budget and says instead that certain spending programs are worth running up more debt.)
If facts don't matter, we shouldn't bother with elections. But we can make the case that the past seven years of ignoring the facts has led to our present problems. It's time to make facts matter again.
Thursday, July 31, 2008
Winning The Drilling Argument
I just got an email from a Senate candidate that was “setting the record straight” regarding the candidate's position on drilling. It said that the candidate supported more domestic drilling, just on currently leased land and not in waters that could jeopardize tourism and fishing industries. For short-term relief for families suffering from high oil and gas prices, the candidate supports regulating speculation, closing the Enron-Dubai loopholes, a “demand” that refiners process more oil (though how that demand would be carried out remains unspecified), releasing oil from the Strategic Petroleum Reserve, and pressuring OPEC to increase production.
I find this response stunningly weak. First, as I’ve posted before, many experts doubt speculation has been the driving force behind high oil prices. With prices so high that people are cutting back on use, I’m not sure why refineries would hold back on production; I’ve heard they’re operating pretty much at capacity. I doubt that releasing oil from the strategic reserve would be substantial enough to have more than a marginal impact on price. And we have no leverage over OPEC; we depend on their oil, so I don’t see how we can pressure them to do anything regarding production (Bush has already tried that path and failed).
But all of these positions are generally in line with the Democratic approach. They’re saying: we do support more domestic drilling, just not as much as the Republicans do. This sounds astonishingly timid, coming off as "drilling lite." The basic problem is that it concedes the idea that some drilling will help solve our oil problems, which isn’t really true but gives credence to the Republican position that more drilling is better. And unfortunately the Republican position seems to be gaining traction.
Here’s how I think Democrats should respond:
“We can drill, but anyone who says drilling is going to help us much in the short term or the long term is lying. Republicans can’t dispute that oil from new drilling won’t come onto the market for years, and anyone who thinks that today’s prices are substantially affected by the prospect of new supply of offshore oil seven years down the road is telling you a fairy tale. Sellers don’t think: gosh, there might be more of this stuff around in seven years, so I’ll lower the price now. Present price is set by present demand and present supply.
“Nor will drilling significantly affect the price when the oil does eventually come onto the market. Yes, there are substantial amounts of oil in ANWR and the outer continental shelf, but it’s not much in the global scheme of things. So the effect on price even in the long term will be minimal. We import about 65% of our oil, so even if we increased our own production by 50%, we’d still be importing over half our oil. That’s not a big improvement.
“The facts simply don’t support more drilling, and so the Republican proposals for drilling everywhere we can won’t solve our gas problem. They will, however, make a lot of money for oil companies (Exxon reported another record quarterly profit yesterday).
“If we’re honest, we’ll admit that there’s not much we can do about current high oil and gas prices. What we can do is start making different choices so that we don’t wind up in this situation again. One thing we can do is encourage people to buy better cars. If the price of gas goes up 40%, you don’t pay one penny more to drive around if your car is 40% more efficient. And it won’t take new technology: European fuel standards are already at over 40 miles per gallon, while we’re still in the low 20s. So the technology is here; we just have to decide to use it.
"And by the time that offshore oil would be coming onto the market, we should be transitioning to cars that are not only more efficient but cars that don’t need oil at all: cars that run on electricity, fuel cells, biofuels, or other technologies. We can make that transition—if we start now.
“The choice is between the past and the future. Republicans are offering the choices of the past: easy choices that don’t work and have led to this situation. Or we can make different choices: better choices that require us to start doing things differently and will leave all of us better in the long run.
“There is no need to wait to start making better choices. If we care about ending our oil dependency, we’ll start making better choices today. If we care about improving our economy, we’ll start making better choices today. If we care about bringing Iran to the bargaining table, we’ll start making better choices today (and waiting at least seven years for domestic offshore oil is far too late). If we care about reducing pollution and greenhouse gas emissions, we’ll start making better choices today.
“And the better choices are about using oil more efficiently and them moving off of it, not indiscriminant drilling that won’t have any effect for seven years if at all.
“This oil crunch will probably ease somewhat eventually. But prices also probably will never return to where they were. We should try to help those families who have no choice but to spend 15% of their income on gas. But we also need to start making decisions, at both the personal and governmental levels, that will keep us from ending up in this situation again.
“Republicans are offering a choice that won’t do much to end our oil dependency or help with today’s prices but will be great for oil companies. Democrats are offering a smarter, better solution—one that might actually work for us domestically, internationally, and environmentally. If we choose it.”
At least that’s what I’d hope Democrats would say. They don’t seem to be saying it yet. Personally, I think it comes off better than looking like a weaker version of the Republican pro-drilling agenda. And it has the added advantage of being true.
Thursday, July 24, 2008
The Oil Test
Watching the news summary on the July 23 PBS Newshour, I heard John McCain say at a town hall meeting: "As soon as the president announced that we were going to lift the moratorium on off-shore drilling, the price of a barrel of oil went down $10. As soon as we get that oil off-shore, then it's not only going to help us with our supply, but it's going to affect this futures market, which, obviously, as we know, has gone out of sight."
I know McCain has said that the economy is his strong suit, but can he really believe his own statment? First, many experts, including a recent federal task force, doubt that the futures market is responsible to any significant degree for the price of oil today. Second, it's simply ludicrous to think that the prospect that oil supply that, by our government's own estimates, won't come online for another 9 years or so can possibly affect the markets to bring down the price of gas today. It's bad enough that McCain admits that he doesn't understand economics; but we should at least have a candidate who doesn't automatically confuse coincidence with cause and effect.
But the larger problem is that drilling seems to have the support of a majority of Americans, and the issue may be gaining political traction for the November elections. Democrats need to hammer Republicans with the truth.
The truth is that drilling domestically for oil that won't come online for nearly a decade won't lower gas prices right now. And that whatever new oil is there simply isn't enough to have a substantial effect on prices even when it does come online. With only 3% of the world's proven reserves and a need to import 65% of our oil, we simply cannot produce our way out of our oil problems. Yes, the Republicans are proposing an easy solution--an easy solution that won't work (but will make a lot of money for oil companies).
So we can do the easy thing and change nothing, or we can take the problem seriously. Most of our oil is used for gas, and the cheapest gallon of gas is the one you never have to buy. We can't pretend that we'll have new technologies to completely free us of oil in the next ten years, but we know for a fact that we can double our present fuel efficiency--because the Europeans have already done it. So we can cut oil imports in half just by replacing our cars, which most of us will do within the next decade anyway, with better ones. And that will reduce the cost to drive around more than any amount of domestic drilling will.
We can frame the argument in terms of patriotism. We can frame it in terms of the past versus the future. It doesn't help the country to support drilling while we continue our present, failed course. Drilling won't help bring Iran to the bargaining table. Drilling won't reduce the need to have our troops ready to protect oil supplies. Drilling won't keep us from sending billions of dollars overseas to countries that don't like us but sell us their oil. And drilling won't bring down gas prices.
If we're patriotic, we'll move towards more fuel efficiency to increase our political leverage with Iran and other nations. We can end the threat of being held hostage by oil suppliers. We can stop funding dictatorial and oppressive regimes. We can dramatically reduce the pollutants we put into the air. And we can do it today, right now; we don't have to wait the better part of a decade that drilling would take even if it were effective, which it isn't.
Let's tell the American people they face a test: we can go for the easy solution that won't really solve a thing, or we can choose to rise to the occasion and take real action for a real solution.
The facts are on our side. We need to make them matter again.
I know McCain has said that the economy is his strong suit, but can he really believe his own statment? First, many experts, including a recent federal task force, doubt that the futures market is responsible to any significant degree for the price of oil today. Second, it's simply ludicrous to think that the prospect that oil supply that, by our government's own estimates, won't come online for another 9 years or so can possibly affect the markets to bring down the price of gas today. It's bad enough that McCain admits that he doesn't understand economics; but we should at least have a candidate who doesn't automatically confuse coincidence with cause and effect.
But the larger problem is that drilling seems to have the support of a majority of Americans, and the issue may be gaining political traction for the November elections. Democrats need to hammer Republicans with the truth.
The truth is that drilling domestically for oil that won't come online for nearly a decade won't lower gas prices right now. And that whatever new oil is there simply isn't enough to have a substantial effect on prices even when it does come online. With only 3% of the world's proven reserves and a need to import 65% of our oil, we simply cannot produce our way out of our oil problems. Yes, the Republicans are proposing an easy solution--an easy solution that won't work (but will make a lot of money for oil companies).
So we can do the easy thing and change nothing, or we can take the problem seriously. Most of our oil is used for gas, and the cheapest gallon of gas is the one you never have to buy. We can't pretend that we'll have new technologies to completely free us of oil in the next ten years, but we know for a fact that we can double our present fuel efficiency--because the Europeans have already done it. So we can cut oil imports in half just by replacing our cars, which most of us will do within the next decade anyway, with better ones. And that will reduce the cost to drive around more than any amount of domestic drilling will.
We can frame the argument in terms of patriotism. We can frame it in terms of the past versus the future. It doesn't help the country to support drilling while we continue our present, failed course. Drilling won't help bring Iran to the bargaining table. Drilling won't reduce the need to have our troops ready to protect oil supplies. Drilling won't keep us from sending billions of dollars overseas to countries that don't like us but sell us their oil. And drilling won't bring down gas prices.
If we're patriotic, we'll move towards more fuel efficiency to increase our political leverage with Iran and other nations. We can end the threat of being held hostage by oil suppliers. We can stop funding dictatorial and oppressive regimes. We can dramatically reduce the pollutants we put into the air. And we can do it today, right now; we don't have to wait the better part of a decade that drilling would take even if it were effective, which it isn't.
Let's tell the American people they face a test: we can go for the easy solution that won't really solve a thing, or we can choose to rise to the occasion and take real action for a real solution.
The facts are on our side. We need to make them matter again.
Insuring Kids And Our Troops In Iraq
What could providing insurance for kids and our ongoing military venture in Iraq have to do with each other? We haven't been asked to pay for either of them. And our unwillingness to pay for either of them should raise serious questions about how much we really care about both of them.
Last year, Congress passed legislation to expand SCHIP, a federal program which supplies funds to states to insure families with children. President Bush vetoed the legislation on the ground that it (allegedly) did not cover the poorest families first and would have allowed states to include some families of modestly higher incomes. Congress failed to override the veto.
My problem with the SCHIP debate did not concern the income limits for the program; it was the funding mechanism. Congress, operating under pay-as-you-go rules, decided to pay for the program by increasing the federal cigarette tax. I think there are two major problems with this revenue source.
First, it's either not a stable form of funding, or, if it is, then we're taxing addicts. If the point of the tax is to decrease the incentive to smoke, then the expectation is that it will work and people will smoke less. But if people smoke less, where is the money for the expansion of SCHIP going to come from? If the revenue source is going to be consistent, then the expectation is that the tax will not have an effect on smoking--in other words, we'll get the money from those who cannot be deterred from the habit by higher costs, essentially penalizing people for being unable to quit. Is that how we want to fund our social programs?
But the larger problem is that taxing smokers fails to ask us to take responsibility for programs we say we want. Who could possibly be against insuring uninsured kids? Surely, opposition would be callous. Yet I wonder what it says about our commitment to this goal if we say that it's so important that we want...smokers to pay for it.
An Oregon ballot initiative last year also tried to expand the state program for insuring kids by taxing smokers to provide the revenue. Tobacco firms spent $12 million to defeat it. The New York Times ran aNovember 8, 2007 editorial"Big Tobacco Defeats Sick Kids," where they accused the companies of distributing deliberately misleading information and concluded: "The referendum said a lot about the power of money in any election, and not much about what the public thinks about the issue if given accurate and balanced information."
Perhaps. But even if it were true, there was a simple way around the machinations of tobacco companies. And that was to ask the people of Oregon, if they thought insuring kids was so important, to pay for it. There's nothing preventing us from insuring kids any time we want--if we're willing to back up our desires with action.
I made this same point regarding SCHIP at a Democratic fundraiser. Someone at my table said: what if we ask the public if they're willing to pay, and they say no? Then, I replied, our elected officials should tell us that we don't care enough to have the program. That's democracy. And that's not Congress's fault; that's my fault for not convincing enough of my fellow citizens that this program is worth paying for.
But I'd excoriate the Bush administration, and by extension McCain, for taking the same approach regarding the continuing military intervention in Iraq. Bush has repeatedly justified our massive military presence there by telling us how important it is. McCain has refused to provide any end date. And how are they paying for it? With borrowed money.
If they really thought it was so important, they should have the courage to ask us to help pay for it. Now. If we're not willing to pay for it, then maybe haven't convinced us that it's so important after all. Maybe they don't ask us because they know most of us would say no. But if we don't care enough to pay for it, then maybe we shouldn't have so many troops there. That's democracy.
Last year, Congress passed legislation to expand SCHIP, a federal program which supplies funds to states to insure families with children. President Bush vetoed the legislation on the ground that it (allegedly) did not cover the poorest families first and would have allowed states to include some families of modestly higher incomes. Congress failed to override the veto.
My problem with the SCHIP debate did not concern the income limits for the program; it was the funding mechanism. Congress, operating under pay-as-you-go rules, decided to pay for the program by increasing the federal cigarette tax. I think there are two major problems with this revenue source.
First, it's either not a stable form of funding, or, if it is, then we're taxing addicts. If the point of the tax is to decrease the incentive to smoke, then the expectation is that it will work and people will smoke less. But if people smoke less, where is the money for the expansion of SCHIP going to come from? If the revenue source is going to be consistent, then the expectation is that the tax will not have an effect on smoking--in other words, we'll get the money from those who cannot be deterred from the habit by higher costs, essentially penalizing people for being unable to quit. Is that how we want to fund our social programs?
But the larger problem is that taxing smokers fails to ask us to take responsibility for programs we say we want. Who could possibly be against insuring uninsured kids? Surely, opposition would be callous. Yet I wonder what it says about our commitment to this goal if we say that it's so important that we want...smokers to pay for it.
An Oregon ballot initiative last year also tried to expand the state program for insuring kids by taxing smokers to provide the revenue. Tobacco firms spent $12 million to defeat it. The New York Times ran aNovember 8, 2007 editorial"Big Tobacco Defeats Sick Kids," where they accused the companies of distributing deliberately misleading information and concluded: "The referendum said a lot about the power of money in any election, and not much about what the public thinks about the issue if given accurate and balanced information."
Perhaps. But even if it were true, there was a simple way around the machinations of tobacco companies. And that was to ask the people of Oregon, if they thought insuring kids was so important, to pay for it. There's nothing preventing us from insuring kids any time we want--if we're willing to back up our desires with action.
I made this same point regarding SCHIP at a Democratic fundraiser. Someone at my table said: what if we ask the public if they're willing to pay, and they say no? Then, I replied, our elected officials should tell us that we don't care enough to have the program. That's democracy. And that's not Congress's fault; that's my fault for not convincing enough of my fellow citizens that this program is worth paying for.
But I'd excoriate the Bush administration, and by extension McCain, for taking the same approach regarding the continuing military intervention in Iraq. Bush has repeatedly justified our massive military presence there by telling us how important it is. McCain has refused to provide any end date. And how are they paying for it? With borrowed money.
If they really thought it was so important, they should have the courage to ask us to help pay for it. Now. If we're not willing to pay for it, then maybe haven't convinced us that it's so important after all. Maybe they don't ask us because they know most of us would say no. But if we don't care enough to pay for it, then maybe we shouldn't have so many troops there. That's democracy.
Monday, July 21, 2008
Actions To Match Our Rhetoric
Perhaps the most significant of the Bush administration's many failures is not the decision to invade Iraq, or to take no action on global warming, or make no move to get us out of our oil addiction. It is instead the consistent absence of any call for any action to match their rhetoric of urgency.
Bush has repeatedly said that Iraq is the central front of the war on terror, that it's the battle not only of our generation but of our children's generation, that civilization itself is at stake, and so he decided to...send 30,000 more troops to the region? If this battle is so crucial, so must-win, why has he not asked anything from us? He says we need to "support the troops," but what has he asked us to do to actually support them? Heck, he didn't even ask us to pay for them; this war is fought entirely on borrowed money. Supporting the troops isn't about putting a ribbon on your car where no one in Iraq will see it; it's opening up your wallet and saying "Here, buy some body armor already!"
In his 2006 State of the Union Address, Bush said that we're "addicted to oil." And then he asked us to do...nothing. He has said that global warming is real and a problem, and then asked us to do...nothing. But if we're not asked to do anything, what realistically can he--or we--expect to get done?
I'd like to say that Democrats have been better, but they haven't. The ongoing gas price debate is a prime example. As I wrote previously, economists have been saying for years that Americans will change their driving habits when the price of gas is high enough to matter. Now it is, and we are.
And what is the general pubic reaction? To ask for relief from high gas prices. But don't we also believe that reliance on foreign oil is a huge problem? That it hampers our foreign policy, puts our troops at risk, is bad for our economy, and bad for the environment?
Yet there is a bipartisan failure of leadership to ask us to face the contradictions in our desires. Some elected official should have the courage to ask: are we serious in ceasing the flow of our money to countries that dislike us, some of which may find its way to terror groups? Are we serious about improving our bargaining position with nations like Iran? Are we serious about not putting our troops in harms way to protect oil supplies? Are we serious about reducing emissions that degrade our air locally and add to greenhouse gases globally?
Because if we are serious, then we should be asked if we're willing to do something, such as make the choice to move to more fuel-efficient cars. If Social Security faces long-term problems and we think the program is important, we should be asked if we're willing to do something, such as waiting another year or two to receive benefits. If we think big money is a problem in politics, we should be asked if we're willing to do something, such as overwhelm it with public money. Things we say are important are things we should be willing to do something about. And if most of us are unwilling to act, then nothing will get done and we should stop pretending that the issues are as important as we say they are.
Perhaps most of us are unwilling to act on these issues. In that case, the consequences of inaction rest with us, not the government. In the end, our elected officials represent us, and we bear the ultimate responsibility, and the ultimate power to effect change. But some of us won't be aware of the necessity to act unless someone has the leadership to ask us if we're willing to do something on the issues we say are important. At the moment, we seem to be engaged in this shadow play where don't push our elected officials to force us to do things we find inconvenient, and they don't ask us to accept the consequences of our own inaction. Everyone is happy because no one accepts responsibility. It may make it easier for politicians to win elections, but it's not a sound foundation for governing.
But I believe we can do things differently. All it takes is some political leader to ask: are we serious? I think many of us are willing to rise to the occasion and take action commensurate to our rhetoric. I could be wrong. But we'll never know unless someone is willing to ask.
Bush has repeatedly said that Iraq is the central front of the war on terror, that it's the battle not only of our generation but of our children's generation, that civilization itself is at stake, and so he decided to...send 30,000 more troops to the region? If this battle is so crucial, so must-win, why has he not asked anything from us? He says we need to "support the troops," but what has he asked us to do to actually support them? Heck, he didn't even ask us to pay for them; this war is fought entirely on borrowed money. Supporting the troops isn't about putting a ribbon on your car where no one in Iraq will see it; it's opening up your wallet and saying "Here, buy some body armor already!"
In his 2006 State of the Union Address, Bush said that we're "addicted to oil." And then he asked us to do...nothing. He has said that global warming is real and a problem, and then asked us to do...nothing. But if we're not asked to do anything, what realistically can he--or we--expect to get done?
I'd like to say that Democrats have been better, but they haven't. The ongoing gas price debate is a prime example. As I wrote previously, economists have been saying for years that Americans will change their driving habits when the price of gas is high enough to matter. Now it is, and we are.
And what is the general pubic reaction? To ask for relief from high gas prices. But don't we also believe that reliance on foreign oil is a huge problem? That it hampers our foreign policy, puts our troops at risk, is bad for our economy, and bad for the environment?
Yet there is a bipartisan failure of leadership to ask us to face the contradictions in our desires. Some elected official should have the courage to ask: are we serious in ceasing the flow of our money to countries that dislike us, some of which may find its way to terror groups? Are we serious about improving our bargaining position with nations like Iran? Are we serious about not putting our troops in harms way to protect oil supplies? Are we serious about reducing emissions that degrade our air locally and add to greenhouse gases globally?
Because if we are serious, then we should be asked if we're willing to do something, such as make the choice to move to more fuel-efficient cars. If Social Security faces long-term problems and we think the program is important, we should be asked if we're willing to do something, such as waiting another year or two to receive benefits. If we think big money is a problem in politics, we should be asked if we're willing to do something, such as overwhelm it with public money. Things we say are important are things we should be willing to do something about. And if most of us are unwilling to act, then nothing will get done and we should stop pretending that the issues are as important as we say they are.
Perhaps most of us are unwilling to act on these issues. In that case, the consequences of inaction rest with us, not the government. In the end, our elected officials represent us, and we bear the ultimate responsibility, and the ultimate power to effect change. But some of us won't be aware of the necessity to act unless someone has the leadership to ask us if we're willing to do something on the issues we say are important. At the moment, we seem to be engaged in this shadow play where don't push our elected officials to force us to do things we find inconvenient, and they don't ask us to accept the consequences of our own inaction. Everyone is happy because no one accepts responsibility. It may make it easier for politicians to win elections, but it's not a sound foundation for governing.
But I believe we can do things differently. All it takes is some political leader to ask: are we serious? I think many of us are willing to rise to the occasion and take action commensurate to our rhetoric. I could be wrong. But we'll never know unless someone is willing to ask.
Saturday, July 19, 2008
Lack Of Straight Talk On Economics
It's amazing to watch the McCain campaigns arguments about tax and budget policy become increasingly detached from reality.
First, McCain has said "Obama will raise your taxes." That statement is simply false. Obama has talked about allowing the Bush tax cuts for those making above $250,000 to expire. If McCain wants to call that a tax increase, fine. Obama has also talked about raising the Social Security tax for people with incomes of over $250,000. But only about 2% of the public makes that much money, so anyone looking at Obama's budget proposals--and telling the truth about them--would have to admit that the vast majority of Americans would not have their taxes go up (unless McCain is adopting a very expansive definition of "your"). Now, Obama's numbers may not balance the buget, but that's another issue.
More important in my view that McCain has repeatedly said that raising taxes in a weak economy would be a huge mistake. The supply-side conservative argument is that tax hikes always hurt the economy because they discourage growth, and that doing so in a delicate economy would kill off any chance at recovery. The problem with this argument is that conservatives said the exact same thing when Clinton and Congress raised taxes in the early 1990s as the country was coming out of a recession. And they were not only wrong, but spectacularly wrong as the nation endured one of the greatest sessions of long-term economic growth that benefited people at all income levels.
To me, this is a classic case of the tyranny of ideology. Some people believe in their ideology so strongly that when their ideology conflicts with facts, they throw out the facts instead of adjusting their ideology to reality (one can point to numerous instances of this phenomenon in the Bush administration). Yes, it's true that excessive tax rates will kill off growth; the Laffer Curve is obviously correct in the extreme case of 100% taxation producing zero revenue; no one would have any incentive to be productive if they can't keep any part of what they've worked for.
But the Clinton years should show that the tax rates of that period did not inhibit tremendous growth, even when imposed during shaky economic times. One might argue that those times happened to coincide with unprecedented productivity gains brought on by a technological revolution. Nevertheless, I see little evidence that people were deterred from working harder in order to avoid the top tax bracket. We aren't at the far end of the Laffer Curve, and it seems more likely to me that larger economic trends just aren't affected much by changing top tax levels by a couple of percentage points.
Yet supply-siders keep repeating the mantra that going back to the Clinton tax rates, even at just the higher levels, will stifle growth--despite the clear counterexample from the last decade. How can they keep saying it? Do they not remember even recent history? Or is their dedication to ideology so strong that they can't bring themselves to address the facts? At the very least, if they think that the continued prosperity under the Clinton tax code was an aberration that would not repeat itself today, they owe us that explanation. But we don't even get that explanation. And if they're not going to address recent history, it's hard for me to take their arguments seriously.
First, McCain has said "Obama will raise your taxes." That statement is simply false. Obama has talked about allowing the Bush tax cuts for those making above $250,000 to expire. If McCain wants to call that a tax increase, fine. Obama has also talked about raising the Social Security tax for people with incomes of over $250,000. But only about 2% of the public makes that much money, so anyone looking at Obama's budget proposals--and telling the truth about them--would have to admit that the vast majority of Americans would not have their taxes go up (unless McCain is adopting a very expansive definition of "your"). Now, Obama's numbers may not balance the buget, but that's another issue.
More important in my view that McCain has repeatedly said that raising taxes in a weak economy would be a huge mistake. The supply-side conservative argument is that tax hikes always hurt the economy because they discourage growth, and that doing so in a delicate economy would kill off any chance at recovery. The problem with this argument is that conservatives said the exact same thing when Clinton and Congress raised taxes in the early 1990s as the country was coming out of a recession. And they were not only wrong, but spectacularly wrong as the nation endured one of the greatest sessions of long-term economic growth that benefited people at all income levels.
To me, this is a classic case of the tyranny of ideology. Some people believe in their ideology so strongly that when their ideology conflicts with facts, they throw out the facts instead of adjusting their ideology to reality (one can point to numerous instances of this phenomenon in the Bush administration). Yes, it's true that excessive tax rates will kill off growth; the Laffer Curve is obviously correct in the extreme case of 100% taxation producing zero revenue; no one would have any incentive to be productive if they can't keep any part of what they've worked for.
But the Clinton years should show that the tax rates of that period did not inhibit tremendous growth, even when imposed during shaky economic times. One might argue that those times happened to coincide with unprecedented productivity gains brought on by a technological revolution. Nevertheless, I see little evidence that people were deterred from working harder in order to avoid the top tax bracket. We aren't at the far end of the Laffer Curve, and it seems more likely to me that larger economic trends just aren't affected much by changing top tax levels by a couple of percentage points.
Yet supply-siders keep repeating the mantra that going back to the Clinton tax rates, even at just the higher levels, will stifle growth--despite the clear counterexample from the last decade. How can they keep saying it? Do they not remember even recent history? Or is their dedication to ideology so strong that they can't bring themselves to address the facts? At the very least, if they think that the continued prosperity under the Clinton tax code was an aberration that would not repeat itself today, they owe us that explanation. But we don't even get that explanation. And if they're not going to address recent history, it's hard for me to take their arguments seriously.
Withdrawing Troops From Iraq: Damned If You Do....
Just a thought on what seems to me to be a bit of intellectual inconsistency about pulling troops out of Iraq.
Those favoring withdrawal like to make fun of the administration's arguments for staying. I've heard over and over quips about how the administration's position boils down to "things are going badly, so we have to stay until they get better; but if they're going better, we can't leave because then things might deteriorate and we'd lose all the gains that have happened." That's not to criticize the comment; the administration's reasoning does seem to have been that whether things are going well or going badly, we have to stay. And the point of this analysis seems to be that since the conclusion is "stay no matter what," the argument must be inherently flawed.
But doesn't the same reasoning apply the other way? Couldn't those who criticize calls for withdrawal say that their opponents' logic boils down to "If things are going badly, there's no use staying because we can't solve Iraqis' internal conflicts for them, but if things are going well, then we should be able to bring our troops home"? Isn't it really the same kind of argument: that whether things are going well or not, we should pull out? If the administration's argument is flawed because it calls for staying no matter what, why aren't the arguments of those who advocate withdrawal equally flawed for concluding that we need to pull out no matter what?
I confess I haven't resolved this one.
Those favoring withdrawal like to make fun of the administration's arguments for staying. I've heard over and over quips about how the administration's position boils down to "things are going badly, so we have to stay until they get better; but if they're going better, we can't leave because then things might deteriorate and we'd lose all the gains that have happened." That's not to criticize the comment; the administration's reasoning does seem to have been that whether things are going well or going badly, we have to stay. And the point of this analysis seems to be that since the conclusion is "stay no matter what," the argument must be inherently flawed.
But doesn't the same reasoning apply the other way? Couldn't those who criticize calls for withdrawal say that their opponents' logic boils down to "If things are going badly, there's no use staying because we can't solve Iraqis' internal conflicts for them, but if things are going well, then we should be able to bring our troops home"? Isn't it really the same kind of argument: that whether things are going well or not, we should pull out? If the administration's argument is flawed because it calls for staying no matter what, why aren't the arguments of those who advocate withdrawal equally flawed for concluding that we need to pull out no matter what?
I confess I haven't resolved this one.
Thursday, July 17, 2008
Intellectual Dishonesty On Oil Prices
I think a June 11 NY Times article shows the problem our nation has in taking our oil problem seriously. And the problem is in both sides of the aisle in Congress--and ultimately with the American public.
The rise in the price of oil is already transforming American habits. The large SUV market is tanking (so to speak) as people flock to cars with better fuel efficiency. Some people are carpooling. Others are rushing to mass transit. Miles driven is dropping. Economists have been saying for years that Americans will use less oil when the price of gasoline is high enough to matter. Now it has become high enough to matter, and their predictions are coming true.
And the side effects of these changes are many. Using less oil means sending less money to countries that don't like us. It means less reliance on our troops to secure oil supplies. It means less pollution and lower global warming emissions. High gas prices make other energy sources more economically viable. All of these results further goals that most of us seem to think are important to us as a country and for the world generally.
So what is the reaction in Congress? Both sides are arguing about how to lower the price of oil. Democrats have argued for releasing supplies from our national Strategic Petroleum Reserve, and for imposing an excess profits tax on oil companies. The Republican proposal is simple: drill. Drill in the Arctic, and drill offshore.
There are two problems with what's going on in Congress. First, it seems fairly obvious that nothing government does will have much of an effect on the price of gasoline. An excess profits tax on oil companies will not increase supply. Using the Strategic Petroleum Reserve might have some minimal short-term effect, but I can't imagine that the result would be dramatic. And any oil from drilling won't come onto the market for nearly a decade. Republican John Cornyn of Texas says in the NY Times article that "We have a winning argument as long as we keep making it." I find it hard to believe that he actually believes this. With the US accounting for nearly 25% of the world's oil usage, possessing only 3% of proven oil reserves, and importing 65% of the oil we use today, drilling will neither provided short term relief at the pump nor lead to independence from foreign oil down the road. To say that drilling is the solution--and to say that the more we say it, the truer it will be--is nothing less than intellectual dishonesty (or a blatant refusal to face reality).
But the second problem, and the more serious one, is with the attempt to lower gas prices at all. The high price of gas is leading, finally, to good results in American behavior. Lower gas prices, while making people's wallets feel better, will result in less fuel efficient cars, more emissions, and more dependence on foreign oil. It would undo the beneficial changes we see happening before our very eyes.
Before the last election, the Democratic National Committee put out door hangers in battleground districts stating the principles that Democrats were running on in 2006, such as open and effective government and affordable higher education. One item was "Energy Independence/Lower Gas Prices." I shook my head, wondering how those who wrote and approved that line could possibly think that it was coherent. The way to get to energy independence is to get off of oil. And the most powerful incentive to get off of oil is if the stuff costs a lot.
And it's not as if it would take a revolution to dramatically reduce our reliance on oil. Most of our oil is used in transportation. And the fact is that we as a society have made lousy choices about the cars we drive. Congress passed legislation requiring average fuel economy to rise to 35 miles per gallon by 2020. Presently, we get slightly over 20 miles per gallon. But if the price of gas stays high, we'll achieve the 35 mpg mark long before 2020. And we know that goal is achievable, because Europeans average over 40 miles per gallon. Today. (It's no coincidence that they also pay over $8 a gallon for gas.) If this issue is important to us, if it's so vital to our future as a nation, why should we wait for over a decade to achieve what one of our peer societies is doing right now? (And just imagine where Europe will be in 2020 on this issue.)
So I recently asked a congressman about this tension between freeing ourselves from imported oil while acting to lower the price of gas. Yes, high gas prices are painful for some people, but don't we need them to achieve the goals we say we want? Won't they be more effective than just raising fuel efficiency standards? Don't they put all the incentives for behavior in the right place? Couldn't Congress advance these goals by putting a floor on gas prices? He said it was simply politically impossible to do so: no congressman could vote year after year to keep gas prices high. So if the market keeps prices high, so be it. If the price drops, we have the fuel efficiency mandate as a backup.
I find that response inadequate on three counts. First, it wouldn't take a vote every year to set a floor for gas prices. It would take one vote, and the price could automatically be adjusted for inflation. (Perhaps he meant that opponents would force a vote on repealing such legislation every year.) Second, there is no guarantee that more fuel efficient cars will be not be more expensive than the cars we buy today. If they do wind up costing more, then the consumer will wind up getting hit in the wallet anyway, regardless of what happens to gas prices.
But the most substantial problem relates to why it would be so politically difficult to pass legislation keeping gas prices high. If politicians can't take such an action because it would be rejected overwhelmingly by the public, then it shows that it's the public that is refusing to take the situation seriously and is unwilling to do what is necessary to solve our oil problem.
Ultimate accountability in our political system does not rest with the 535 elected representatives in Washington. It rests with over 200 million eligible voters. And we as voters cannot expect those in Congress to make the hard choices that we ourselves are not willing to make. We cannot expect that just putting the "right" people in office will solve our problems for us. Our problems will get solved when enough of us are willing to act on the issues we say are important, and then implement our common will through our government.
So there is general agreement in the public that reducing our oil usage would have tremendous beneficial effects. But there seems to be little recognition that the best incentive for using less oil is if its cost is high, which rewards people who use less and penalize those who use more. We seem to want the result of using less oil but unwilling to implement the most effective societal tools to get ourselves to actually do so. If we were serious about improving our bargaining positions with oil producing nations, if we were serious about keeping our troops out of harm's way, if we were serious about the effects of our actions on the environment, we would embrace higher gas prices.
And there's a failure of political leadership as well. I don't think our elected officials should force higher gas prices on an unwilling public. But leadership consists of asking people to face the inconsistency between what we say we want to happen and the absence of support for policies to bring it about. Politicians could say "if we're serious, we should support X. So, are we serious?" And the final decision should be left to the people, who are accountable for the result--for better or worse. If we choose lower gas prices, then we have only ourselves to blame if we continue to depend on the Saudis to keep our cars running.
I in no way mean to diminish the substantial burden that high gas prices have on some people. Many people don't have access to mass transit. Many people can't afford to get a more fuel efficient car. And rising gas prices are tremendously regressive, since the increase of any necessary commodity eats up a greater percentage of the funds of those who don't have much to spend to begin with. A NY Times article from last month reported that some communities are now spending an average of 15.6% of their income on gas. No one should have to bear that burden for the good of the country.
But there are ways of dealing with that burden that don't involve lowering gas prices. We could provide greater government assistance for low-income earners, for instance by raising the earned income tax credit. If recipients wanted to spend that money on gas, they could do so; but it would reward those who take conservation measures by leaving them with more money if they did so. So the cost of higher gas prices could be alleviated for those who would be hurt the most while maintaining the incentives we should all have to move to more fuel efficient vehicles, live closer to where we work, and generally look at how we can use less oil.
And government could offer rebates for cars that meet certain efficiency standards (perhaps subject to income limitations). If the price of gas goes up 40%, it doesn't cost any more to drive around if your vehicle is 40% more efficient. But that's a choice we have to make: to buy that more efficient car.
So if our government is going to be honest with us--and if we are going to be honest with ourselves--we should recognize that higher gas prices can be a good thing. And we can take steps to ease the effects of gas prices on lower income groups. We can act so that in a few years many of us won't be spending much more on fuel than we were a few years ago. But it requires a decision to act. It requires the political leadership to ask us to face the consequences of our choices. And if we choose to act collectively, to put in place the incentives to change our behavior, and to allow our elected officials to pass legislation creating those incentives without voting them out of office for it, then we can accomplish those goals that we say are so important to us.
The rise in the price of oil is already transforming American habits. The large SUV market is tanking (so to speak) as people flock to cars with better fuel efficiency. Some people are carpooling. Others are rushing to mass transit. Miles driven is dropping. Economists have been saying for years that Americans will use less oil when the price of gasoline is high enough to matter. Now it has become high enough to matter, and their predictions are coming true.
And the side effects of these changes are many. Using less oil means sending less money to countries that don't like us. It means less reliance on our troops to secure oil supplies. It means less pollution and lower global warming emissions. High gas prices make other energy sources more economically viable. All of these results further goals that most of us seem to think are important to us as a country and for the world generally.
So what is the reaction in Congress? Both sides are arguing about how to lower the price of oil. Democrats have argued for releasing supplies from our national Strategic Petroleum Reserve, and for imposing an excess profits tax on oil companies. The Republican proposal is simple: drill. Drill in the Arctic, and drill offshore.
There are two problems with what's going on in Congress. First, it seems fairly obvious that nothing government does will have much of an effect on the price of gasoline. An excess profits tax on oil companies will not increase supply. Using the Strategic Petroleum Reserve might have some minimal short-term effect, but I can't imagine that the result would be dramatic. And any oil from drilling won't come onto the market for nearly a decade. Republican John Cornyn of Texas says in the NY Times article that "We have a winning argument as long as we keep making it." I find it hard to believe that he actually believes this. With the US accounting for nearly 25% of the world's oil usage, possessing only 3% of proven oil reserves, and importing 65% of the oil we use today, drilling will neither provided short term relief at the pump nor lead to independence from foreign oil down the road. To say that drilling is the solution--and to say that the more we say it, the truer it will be--is nothing less than intellectual dishonesty (or a blatant refusal to face reality).
But the second problem, and the more serious one, is with the attempt to lower gas prices at all. The high price of gas is leading, finally, to good results in American behavior. Lower gas prices, while making people's wallets feel better, will result in less fuel efficient cars, more emissions, and more dependence on foreign oil. It would undo the beneficial changes we see happening before our very eyes.
Before the last election, the Democratic National Committee put out door hangers in battleground districts stating the principles that Democrats were running on in 2006, such as open and effective government and affordable higher education. One item was "Energy Independence/Lower Gas Prices." I shook my head, wondering how those who wrote and approved that line could possibly think that it was coherent. The way to get to energy independence is to get off of oil. And the most powerful incentive to get off of oil is if the stuff costs a lot.
And it's not as if it would take a revolution to dramatically reduce our reliance on oil. Most of our oil is used in transportation. And the fact is that we as a society have made lousy choices about the cars we drive. Congress passed legislation requiring average fuel economy to rise to 35 miles per gallon by 2020. Presently, we get slightly over 20 miles per gallon. But if the price of gas stays high, we'll achieve the 35 mpg mark long before 2020. And we know that goal is achievable, because Europeans average over 40 miles per gallon. Today. (It's no coincidence that they also pay over $8 a gallon for gas.) If this issue is important to us, if it's so vital to our future as a nation, why should we wait for over a decade to achieve what one of our peer societies is doing right now? (And just imagine where Europe will be in 2020 on this issue.)
So I recently asked a congressman about this tension between freeing ourselves from imported oil while acting to lower the price of gas. Yes, high gas prices are painful for some people, but don't we need them to achieve the goals we say we want? Won't they be more effective than just raising fuel efficiency standards? Don't they put all the incentives for behavior in the right place? Couldn't Congress advance these goals by putting a floor on gas prices? He said it was simply politically impossible to do so: no congressman could vote year after year to keep gas prices high. So if the market keeps prices high, so be it. If the price drops, we have the fuel efficiency mandate as a backup.
I find that response inadequate on three counts. First, it wouldn't take a vote every year to set a floor for gas prices. It would take one vote, and the price could automatically be adjusted for inflation. (Perhaps he meant that opponents would force a vote on repealing such legislation every year.) Second, there is no guarantee that more fuel efficient cars will be not be more expensive than the cars we buy today. If they do wind up costing more, then the consumer will wind up getting hit in the wallet anyway, regardless of what happens to gas prices.
But the most substantial problem relates to why it would be so politically difficult to pass legislation keeping gas prices high. If politicians can't take such an action because it would be rejected overwhelmingly by the public, then it shows that it's the public that is refusing to take the situation seriously and is unwilling to do what is necessary to solve our oil problem.
Ultimate accountability in our political system does not rest with the 535 elected representatives in Washington. It rests with over 200 million eligible voters. And we as voters cannot expect those in Congress to make the hard choices that we ourselves are not willing to make. We cannot expect that just putting the "right" people in office will solve our problems for us. Our problems will get solved when enough of us are willing to act on the issues we say are important, and then implement our common will through our government.
So there is general agreement in the public that reducing our oil usage would have tremendous beneficial effects. But there seems to be little recognition that the best incentive for using less oil is if its cost is high, which rewards people who use less and penalize those who use more. We seem to want the result of using less oil but unwilling to implement the most effective societal tools to get ourselves to actually do so. If we were serious about improving our bargaining positions with oil producing nations, if we were serious about keeping our troops out of harm's way, if we were serious about the effects of our actions on the environment, we would embrace higher gas prices.
And there's a failure of political leadership as well. I don't think our elected officials should force higher gas prices on an unwilling public. But leadership consists of asking people to face the inconsistency between what we say we want to happen and the absence of support for policies to bring it about. Politicians could say "if we're serious, we should support X. So, are we serious?" And the final decision should be left to the people, who are accountable for the result--for better or worse. If we choose lower gas prices, then we have only ourselves to blame if we continue to depend on the Saudis to keep our cars running.
I in no way mean to diminish the substantial burden that high gas prices have on some people. Many people don't have access to mass transit. Many people can't afford to get a more fuel efficient car. And rising gas prices are tremendously regressive, since the increase of any necessary commodity eats up a greater percentage of the funds of those who don't have much to spend to begin with. A NY Times article from last month reported that some communities are now spending an average of 15.6% of their income on gas. No one should have to bear that burden for the good of the country.
But there are ways of dealing with that burden that don't involve lowering gas prices. We could provide greater government assistance for low-income earners, for instance by raising the earned income tax credit. If recipients wanted to spend that money on gas, they could do so; but it would reward those who take conservation measures by leaving them with more money if they did so. So the cost of higher gas prices could be alleviated for those who would be hurt the most while maintaining the incentives we should all have to move to more fuel efficient vehicles, live closer to where we work, and generally look at how we can use less oil.
And government could offer rebates for cars that meet certain efficiency standards (perhaps subject to income limitations). If the price of gas goes up 40%, it doesn't cost any more to drive around if your vehicle is 40% more efficient. But that's a choice we have to make: to buy that more efficient car.
So if our government is going to be honest with us--and if we are going to be honest with ourselves--we should recognize that higher gas prices can be a good thing. And we can take steps to ease the effects of gas prices on lower income groups. We can act so that in a few years many of us won't be spending much more on fuel than we were a few years ago. But it requires a decision to act. It requires the political leadership to ask us to face the consequences of our choices. And if we choose to act collectively, to put in place the incentives to change our behavior, and to allow our elected officials to pass legislation creating those incentives without voting them out of office for it, then we can accomplish those goals that we say are so important to us.
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