Krugman Assails 'Gas Tax Holiday' Plan That His Candidate Supports

In today's New York Times, Paul Krugman takes John McCain to task over his lack of "straight talk" on tax policies. Krugman equates McCain's policies with an overall extension of the Bush White House, and suggests that he's made a fine parsing of McCain's plan saying, "those of us who looked hard at his policy proposals, especially on taxes, saw the shape of things to come." That shape?

And a look at what Mr. McCain says about taxes shows the same combination of irresponsibility and double-talk that, back in 2000, foreshadowed the character of the Bush administration.

Which is all well and good. But check out what Krugman shoehorns in at the end of his piece:

The impression that Mr. McCain's tax talk is all about pandering is reinforced by his proposal for a summer gas tax holiday -- a measure that would, in fact, do little to help consumers, although it would boost oil industry profits.

More and more, Mr. McCain sounds like a man who will say anything to become president.

Well, as we know from reading the New York Observer, the Times' columnists are not in the practice of endorsing candidates. That's a good thing, I guess, considering the fact that the candidate Mr. Krugman seems to prefer, Hillary Clinton, backs the same gas tax holiday.

Speaking on CNN Monday night, New York's Sen. Clinton outlined a series of steps to address gas prices, including the release of oil from the country's strategic reserves. She said she would "also consider a gas-tax holiday, if we could make up the lost revenues from the Highway Trust Fund," which the federal gas tax supports. She didn't specify how those lost revenues would be recovered.

What's more, Clinton employs her own brand of politically savvy double-talk to speak about it. Via Yglesias:

In other words, Clinton doesn't agree with McCain's idea. She'll do it only "if we could make up the lost revenues from the Highway Trust Fund." But we can't make up the lost revenues from the Highway Trust Fund, so she won't do it. And that's the right answer, but she's successfully confused most of the audience into thinking she does favor the holiday. Anyone who pays enough attention to realize she doesn't favor the holiday is probably high-information enough to realize that the holiday is a bad idea.

Far be it for me to suggest that there might be an "elites-versus-lunchpail" schism that Clinton's exploiting, but one thing is very clear. This sure sounds like a person who will say anything to become President, only it's much more clever: Clinton earns the favor of anyone who supports the holiday while simultaneously planting the reason she won't be enacting it. That of course, provides Clinton the cover to do things like this:

Hillary Clinton Monday criticized Barack Obama for opposing the concept of suspending the gasoline tax during the peak summer driving months, a plan both she and Republican John McCain have endorsed.

The only question left, then, is whether Krugman is part of the "confused" audience Yglesias speaks of, or whether it's more in line with Ryan Avent's recent observation: "Paul Krugman has been studying his colleagues' work and he can now hack with the best of them."

Comments

[outnow]

If the middle class makes the Bush presidency permanent how long would that last? Those policies are not sustainable. The Bush tax cuts were not permanent. If McCain makes them permanent, he can not afford the permanent state of war he wants. Tax breaks for gasoline this summer will only create more problems for the highway fund. Hillary supports this tax holiday to help the little guys driving around while she and Bill wallow in all the cash they got as payoffs for being such a good DLC type. What a total joke. As Dylan said, "there must be some way out of here said the jester...." The middle class does not realize that they are the ones who need the government's help. The scariest words are not "I'm from the federal government and I'm here to help you." The scariest words are "I'm from the thought police and I'm here to arrest you."

[BBackSoon]

"said the joker to the thief"

Thief is important here.

I agree with the sentiment.

[BlackJAC]

Allow me to summarize this gas tax holiday plan: they want to eliminate the eighteen cents or so per gallon for a period of time, which will translate to a vaunted savings of a whole three dollars ($3.00), give or take a nickel, per fill-up. That's right: this will save you just enough cash to buy either a protein bar or a couple of bottles of soda from the convenience store attached to said gas station.

Three words: "Strategic Petroleum Reserve."

[suec03]

But as economist Dean Baker, a regular blogger at the American Prospect (www.prospect.org), notes, supply and demand would keep the price of gas at the same level as before you suspended the gas tax. You wouldn't save even a penny. Instead of that 18 cents a gallon going to the government to dole out to states to repair roads and bridges, that 18 cents a gallon would go straight to the oil companies as even more profit! Sen. Obama is right to look at other ways to handle this. Would Sen. Clinton really be able to capture the entire 18 cents per gallon by assessing a windfall profits tax on oil companies? I'm sure their tax advisors would be trying to find a way to avoid all or a significant part of the tax.

[leftcoastliberal]

I heard on Keith Olberman Clinton wants to replace the money lost with a gas tax holiday from a windfall profit tax on Oil Companies - which one supposes they would then pass along to the consumer in the form of higher prices. What a "pander" bear! And shouldn't we, as a nation, be trying to evolve past the reckless consumption of fossil fuels? Once again, Clinton proves she is utterly unfit for the presidency.

[speciallady2003]

Yet another example of Hillary lying. She says she's for the tax break only if it's funded elsewhere, but gives no clue as to where that is. For sure, it's ultimately out of our wallets. She also says if she can't find the money she won't do it, how hard do you think she's looking? Oh, and congress needs to approve and we all know the glacial speed they work at. This is never going to happen and they know it. Another example of pandering.

[lookingAhead]

This is a stupid idea! The problem lies with the oil companies and the greed. To reduce more income into the federal reserve makes no sense. HOW ARE WE TO PAY OFF THE DEBT this administration has strapped on the backs of the young.
This makes as much sense as carbon trade offs. It appears that Krugman, Hillary and McCrazy are on the same page, that says a lot.

[sef2121]

I am surprised that no one is addressing the issue of how burdened the trucking industry is by these prices (they are the ones protesting and have spoken before Congress on the need for some relief). The average family may save only 40 or so dollars, but that is more than enough for school supplies for the fall or groceries. Forty dollars is a lot of money to a lot of people...I am surprised at the ignorance of some of these posts. Think of truckers and the lower class before you start blasting an idea just because Hillary supports it.

[thehardertheycome]

The trucking industry is burdened however the tax holiday will not provide them with relief. The holiday is so shortlived that they will not be able to realize a savings. The retail cost of gas or diesel will not be affected by the gas tax holiday. The consumers will probably by more gas/diesel under the false pretext that they are paying less. The only winners will be the oil companies.

This is what it appears to be; political pandering by both McCain and Hillary but more so by Hillary because she wants to be on both sides of the coin. Depending on who you are you will believe that she supports the "poor" people getting a break no matter how shortlived. However this is a farce because there really no break because the tax payer pays this temporary loan back with loan shark intrest...i.e the Highway Trust Fund. To replenish that fund will mean higher taxes on oil companies who will then pass that off to the consumer with higher prices on gas which then mean a higher tax base to the consumer.

The candiates need to look at a solution and the solution can only come from their approach to the oil companies. Releasing some of the reserve and flooding the market thereby reducing demand may be a start...who knows?

[2008thankyou]

The holiday is a band-aid at best, and not a very good one. Not to mention, this countries infrastructure is on the brink of disasters. Roads, highways and most of all bridges are decades behind in repair.

A couple of bills in our pocket isn't going to change our lives for the better, it can if we continue to ignore our infrastructure and another major bridge collapses killing everyone.

[Forest]

Band-aid politics will at best camouflage the real problem.

[cubs325]

political pandering just like the tax rebate checks - like giving candy to a hungry malnourished child - clinton and mccain ARE POLITICS AS USUAL -

[geobushono]

Of course it's a bandaid, but some times you need to pander-I'm serious.
When clinton/mccain are proposing to keep $$ in the pockets of consumers, I believe it is a misstep to oppose that policy without a counter proposal that puts that $$ in sonsumers pockets.
The truckers are going broke........They are the canary in this economic death spiral, aqnd any candidate that says, "here's 50 bucks" is appealing.

OK Barack, get out there and try not to nuance the situation..............we've got a whole Country salivating over a $600 LOAN from the Chinese...........THAT'S who you're dealing with.

Obama 08

[xcrunner77]

18 cents a gallon -- or 20 cents in Clinton math -- is hardly going to matter to the average person when gas is near $4 per gallon. The average person will save very little, while their bridges and roads would fall apart for lack of funding. Why hurt the oil companies when you can sacrifice our infrastructure? (Side benefit: if the roads become too bad to drive on them, people will drive less, saving money!)

Way to go Hillary and McCain! Propose something that sounds good but doesn't actually do anything. If you had any real balls -- either of you -- you'd propose setting the price of gas at $2 per gallon by law. Let the oil companies spend some of their $40 billion per quarter profits to subsidize complying with the law. That would make a real difference.

Oh wait, you've both taken how much in contributions from the oil industry? Yea, that's right. Nothing's going to change, because you are both bought already.

[evekendall]

OMG! Krugman is thinking for himself?

[ProudLiberalDan]

He was thinking for himself when he was criticizing Bush on the War and on his tax cuts for the wealthy when the Democrats in Congress were hiding under their desks and triangulating against the base.

We should be thanking him.

[BitterInPA]

I can't wait until the weekend before Labor Day when long gas lines appear as people top off and hoard as much gas as they can before the price goes up. McCain wants to remind everyone of the 1970's.

[joselopez]

Clinton is pandering to her uneducated base. And of course they will buy it.

Let's do the math. If I use 400 gallons of gas over this summer (very high for me) I will saver 73.60 cents. WOO HOO.

I rather have that 74.00 dollars go to a construction contract that would put some people back to work!!!

CLINTON WILL SAY OR DO ANYTHING AT THIS POINT FOLKS, DO NOT FALL FOR IT!!!

[harriscrl3]

Thats all they do quick fixes that will get them elected and then they get into office and do NOTHING. Then 4 years later gasoline is $10 a gallon and they continue to make their promises and the poor voters stuck on stupid hope that this is the election they finally do it right.

Carol

[lobo1939]

Watching Krugman continue to support Hillary is painful.

[SpinCycleRadio]

In an odd way I feel vindicated, I have been saying this for a while now:

The Gas Tax Holiday will not reduce pump prices. Everybody peddling it is either a fool (for believing it will) or a liar (because they know it will not).

Gas prices are controled by traders based on the supply/demand situation. Try to cut the price without changing the supply and people will be a little less carefull about consumption. A shortage will appear on the horizon and traders will bid up wholesale prices until supply and demand are again at an equilibrium...once again at the current price.

[illinoisan]

Although he went off script inadvertently, this actually gives Krugman a fig leaf of neutrality.

[Gould123]

Hasn't any one notice that the day after Mccain talk about his tax free holliday on gas that our gas went up 10 cent, an it still going up! Those tax revenues pays to pave our highways and a lot of other stuff ! If Clinton an Mccain wants too stop tax on gas for the Hollidays who will make up the Miilions on revenue lost to fix our roads! It will stop Construction in it's tracks and lose jobs for a lot of construction workers this summer with no revenue to pay them. This is the kind of idiot things Mccain and Hillary does with out for thought of the damage to the people! it's no break, because every sense Mccain talked about it, the company's have been trying to make up for loseing their own profits by raiseing gas cost to all of us! here we've gone up from3.39 a gallon to 3.58 a gallon sense mccain opened his mouth about tax gas break for the summer. Construction comeings are talking that to break even they may have to do it with less workers and less hours! So all you people Who think this is great---------- you don't understand how it works, and it hurts you a lot! Obama was right to come out against this gas tax break! It's a political stunt that sounds good for Mccain and Hillary, and we are the big losers!

[NoLabelForMe]

For all of you posters who defend Krugman and his actions this election season:

We don't criticize Krugman because he favors HRC, which he does. We criticize him because he exercises a double standard, while pretending to be an objective columnist. The point of Jason's article is that Krugman looks for opportunities to lambast Obama, while giving HRC a free ride on the gas tax rebate proposal.

Many of us used to read Krugman, but why reward a partisan hack? I stopped reading him after years of following his articles, and yes I have read them. I simply will not reward disingenuous hacks, even if they are from Princeton.

[ProudLiberalDan]

I think its much more likely that Obama supporters are upset because someone with a high profile is able to effectively critique Obama on policy substance and they just don't like that anyone is criticizing their preferred candidate.

[NoLabelForMe]

I guess, perhaps, we see what we want to see, Dan. But you don't address my point which is Krug's tendency, at least during this election season, to apply a double standard. When he either admits to having a bias, or offers any single critique of "his" candidate, then we will listen to him.

[ProudLiberalDan]

Gee. Who do I have more respect for? Krugman, a noted Ivy League professor, economist and columnist for the New York Times, or, this blogger who takes a cheap shot at Krugman. I think I'll pick Krugman over the Obamaniacs any time.

Krugman tells the truth. He has never endorsed Clinton, only her rip off Edward's health care plan over Obama's weak health care plan, and that's only as an interim step to what he really supports -- single payer health care.

Krugman is NOT the enemy. He was boldly and fearlessly speaking out against Bush and the Iraq War when the Democrats in Congress were hiding under their desks, triangulating against the base, and finessing the votes on the Iraq War and Bush's tax cut for the wealthy.

Whether or not we agree with his support for Hillary's weak health care plan or Obama's weaker health care plan, we should be thanking him for standing up to Bush when our elected representatives didn't and for continuing to make the case for single-payer health care.

All the criticism of Krugman by some of Obama's rapid partisans does is lower my opinion for them, especially the ones who have obviously never read anything Krugman wrote and don't have the slightest idea what they are talking about, other than somebody daring, DARING, to critique Obama.

[qwr]

Anyone who can support a candidate who voted for the war, voted for Patriot Act I, voted for the 1st Bankruptcy bill, and who loudly beat the war drums is suspect. And so Krugman is suspect. If you read his blog, he has posted on many occasions how the war shouldn't be blamed for the economy. Krugman showed a lot of outrage when few did, but are you sure you know the reasons why? At the time, I thought Krugman was outraged for the same reasons as I was. Now I know that this was not the case.

[seanwalter1969]

well said

[MouthFountain]

I wouldn't want to get in the way of the back and forth love-fest between you two, but how is pointing out that Clinton supports a gas-tax holiday, which cannot be payed for under her plan, dis-respectful? Aren't we discussing the issues?

I feel that it is pandering, and ill-conceived. No big deal. I like Krugman as well, and read him often, though he does voice his support for Clinton often. So! We can disagree, but in an election, my vote is equivalent regardless of his intellectual superiority.

I like "rapid partisan" it probably sums up the internet forum more than "rabid partisan."