Could high gasoline prices become a successful election-year sledgehammer - against Obama and the Democrats? That might seem unlikely, given that oil was trading at $24 a barrel when the GOP took office in 2001 and was floating between $134 and $140 this week. With a record like that, and a Republican Party dominated by oil interests and lobbyists, Democrats might be tempted to ask: How they're going to pull off a strategy like that - by declaring "Mission Accomplished"?
The answer might be "Yeah, pretty much." Remember, the Republicans won the 2004 election by combining audacious arguments with fear-mongering attacks on Democrats. Democrats would be unwise to assume that the Right isn't gearing up to do the same thing now.
In fact, there's evidence that they already are. Earlier this week the McCain camp attacked Obama by distorting some of his statements, claiming he had said American should "get used to higher gas prices" and suggesting he hoped that gasoline costs would continue to rise.
He had done nothing of the kind, of course. A transcript of the interview in question shows that Obama proposed interim tax relief for the cost of oil, combined with longer-term strategies for reducing U.S. oil consumption. As most policy experts know, reduced consumption would immediately lower household expenditures for oil (if you use less, you pay less) and could put downward pressure on prices by reducing demand.
When Obama noted that we "can't artificially lower gas prices," he was referring to the pandering "summer gas holiday" that McCain has adopted. He wasn't saying we shouldn't lower gas prices. He was merely pointing out that these types of gimmicks usually backfire, creating greater oil company profits without saving any money for consumers.
Now we have an extreme hard-Right group called "The Center for Individual Freedom" arguing, in shrieking capital letters, that "liberals and RINOs in Congress are actively and aggressively trying to RAISE THE PRICE OF GASOLINE!"
Did you miss that story? Everybody did. They go on to say:
"Just last week, the Senate attempted to pass the Boxer Climate Tax bill, a deceptive piece of legislation that Senate Minority Leader Mitch McConnell acknowledged would raise the price of gasoline at the pump BY ANOTHER $1.40 a gallon!"This is classic conservative name-switching, like calling the inheritance tax as "death tax." By "Boxer Climate Tax bill," they actually mean the "Lieberman-Warner climate bill." That bill was introduced by two John McCain supporters. One's a Republican (or should that be "both"?), and one is Sen. McCain's official "ball-bearing checker." Sen. Boxer was a cosponsor, and brought it to the Senate for a vote.
The Lieberman-Warner bill specifically avoids taxing polluters directly. It used a "cap-and-trade" approach that applies market principles to reducing pollution. (The Union of Concerned Scientists provides a good summary of cap-and-trade.) Could "cap and trade" increase costs at the gas pump? Yes, potentially, with a slow rise of pennies per year that is offset by clean energy and reduced consumption.
We've tried a different approach for the last seven years: We've turned the reins of government over to two oil barons and the entire energy industry lobby. How's that working out for you? In December of 2000 we were paying an average of $1.65 per gallon at the pump. Last night I paid $4.86. That's an increase of nearly 300 percent - an average of 46 cents per year. If we have four more years of the same results under McCain, we'll be paying $8 for a gallon of gas by 2012. (That's using a pennies-per-year calculation; calculating the trend on a percentage basis puts us in the $14 range at the end of a McCain first term.)
The Bush Administration EPA - that is to say, a potentially hostile force - analyzed Warner-Lieberman and said it might increase costs by 53 cents per gallon by 2030 (less than 2-1/2 cents per year). And that's without taking into account the enormous range of other offsetting measures that factor into a sane environmental policy. But even this (possibly unfriendly) analysis gives us a total cost increase over 22 years that's about the same as we've paid for each year of the Bush Administration - except that none of that money's gone into government coffers and pollution hasn't been reduced.
But wait, say conservatives - what if McCain doesn't pursue the same policies as Bush/Cheney? He says he won't. In fact, he claims to support ... get ready ... a cap-and-trade approach. But isn't that what the Right was just calling a "climate tax"? Yes. (Robert Reich details the differences between Democratic versions of cap-and-trade and McCain's, which is softer on the big polluters who are already benefiting from windfall profits.)
So McCain will either give us more of the same disastrous policies, or create a "climate tax" of his own - one that's less effective in reducing emissions and easier on the big polluters. And is McCain likely to push the tax relief or the offsetting new technologies the Democrats have proposed to ease the pain for ordinary Americans? Hmm. What do you think?
So, you may be asking, how can the Republicans expect to get away with a strategy like this? Isn't that the Audacity of Chutzpah? Maybe ... but look what they've been able to get away with since 2001. They have a successful track record in benefiting from catastrophes of their own making. One thing that might stop them this year is a vigilant press that's capable of explaining complex policy issues in an honest, neutral way that doesn't permit demagoguery.
The only reasonable question to ask in that case is: What's Plan B?
Plan B is a smart, aggressive strategy in which Democrats and their allies respond to these accusations quickly, directly, and intelligently. Will they do it? To be continued ...
RJ Eskow blogs:
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All of us have this tendency. Van Jones in discussing the environmental conservation movement with Carl Pope pointed out that the environmental movement has this David vs Goliath attitude that they bring to the table. As individual citizens we often have this same attitude toward "Washington".
As the Republican disaster shows, this is not effective in governing the country. Nature, Industry, Technology, Science, Finance, Military, Government, and Unions, these are the Goliaths that we citizens of United States have to manage to govern our country. As Van Jones pointed out. It is better to have these Goliaths on our side!
A solution like a carbon tax with flat rebates that is simple and effective, is what we should support. It allows us to deal with the disastrous debt that the last 7 years of Republican leadership have left us with. It allows us to immediately address global warming and it provides the funding for us to manage these Goliaths so that they will help us address the huge environmental, energy and economic problems that we face.
One of the reasons that the Bush administration has such low approval rating is that they borrowed many ideas from the democratic playbook....huge expansion of government, a socialist mentality and an inability to rein in wastful spending. I would fall out of my chair if any of you liberals would ever suggest that what we need to do is a top to bottom reorganization of the our government at every level. I think we would find that there is many wastful programs and expenditures that could be eleiminated wothout missing a beat.
As for the carbon tax.....that what it is....a tax. You liberals have never met a tax you did not like. I do not think it has been sufficiently proven that man's activities have caused any warming of the earth.
The appropriate Democratic response is to continually insist that oil prices are the result of futures speculation on Wall Street. And this works; most people understand that the oil corporations are making their bigges bucks from investors and that the gas-station price rise is intended to payt of those investors while increasing their own profits, andhas nothing to do with amount of supply in the least. (As it happens, the increase in futures spec. has to do with a basic assumption that supply will increase over the next decade, thus reducing the influence of any one cartel on oil prices down the line.)
Your argument can be used in one political arena, but I am just suggesting a different tact in a different, perhaps larger, arena.
This is not to say McCain has a tax relief plan that would work, his plan does not protect the consumer. But his plan, good or bad, has the prospect of getting some relief to consumers in the near future. Obama's ideas on relief for the consumer? He has offered nothing that will help in the short term. And he needs to come up with some plan or idea that will help consumers now, not later.
As things stand at this point most of my friends are putting off a vacation this year, the high cost of travel has made it unaffordable to go very far. Obama has to do something to ease this pain. When it takes almost $100 to fill my vehicle that forces me to cut spending elsewhere. Obama has to come up with a plan that can offer help now.
"This is not to say McCain has a tax relief plan that would work, his plan does not protect the consumer. But his plan, good or bad, has the prospect of getting some relief to consumers in the near future." - your argumnt is utterly incoherent. If it won't work, it won't provide any relief, QED. With gas costing $5.00 per gallon, the 18cent/gallon tax isn't likely to provide much relief to anyone. McCain is looking cute without getting clever.
Opposed to drilling in ANWAR
Opposed to further building of nuclear power plants
Opposed to recovery of oil shale
Opposed to drilling off our shores even though other countries are doing just that
Suppport taxing us to death over the fairy tale that is man made caused global warming
Democrats have held these positions long before bush ever came along.
You are right Eskow, This is not Bush's fault....it is the dems fault. We have a club the size of redwood tree here.
ANWR will take years to come online and will only provide about 1-2% of our needs. Oil shale only becomes viable when prices are high enough to warrant the expensive process to extract the oil, and again it will take years to get it up to full production. Nuclear requires an enormous amount of fossil fuels up front to make the fuel rods, then you have to deal with nuclear waste disposal when they're spent.
If we are going to invest in something that will take years to show a return why not do it for a resource that isn't close to running out? Solar, wind, geothermal, tidal, cellulosic ethanol, biodiesel from algae all have greater potential than running around looking for the last drop of oil.
And the fact that you call man made global warming a fairy tale shows the rest of us how ignorant you are. How do you explain the spike in CO2 levels in our atmosphere coinciding with the industrial revolution over the last 200 years?
Thats what we said 10 years ago...great planning eh?
Nuclear energy is clean and efficient and we have the technology and resources to keep it safe. I think it is the best alternative to electricity generation. Solar and wind are ok. It has not been demonstrated however that we could roll out these technologies in a major way that would replace fossil fuels and nuclear. Also, the very folks that have touted these technologies have also had a NIMBY attitude when they propose building such facilities. Most notably, the Kennedy's. I think there is a place for these technologies too but you have to let the free market sort that out. Centralized planning and subsidies from the government was failed policy.
Also, it has been demonstrated that there is a lot of recoverable oil left. We have the CO oil shale, we have off shore oil and natural gas up the ying yang. We are not about to run out of oil. Not in my or my children's lifetime anyway if we more fully implement the other energy technologies.
Still wonder why you are feeling such pain at the pump?
Still feel the Democrats need to raise taxes to fund all their boilerplate platform promises?
Still think we should be ready to turn even more of this economy, and, your wallet, over to Washington?
This much is clear: the Democrats already have every dime they need to fund all their promises right now, and aggressively roll back taxes across the board for every working family struggling on two incomes, as well as those sliding into poverty on one.
I do mean aggressively - 20 percent or more!
MEMO TO BARACK: Now, that is change we can believe in.
http://pogoprinciple.wordpress.com/2008/06/14/the-political-economy-of-your-pain-at-the-pump/
To get out of the financial hole that the Republican have driven us into we need to increase taxes on the well to do. Look into the revenue neutral carbon tax. Flat rebates of the carbon tax, the same rebate to everyone, would provide significant additional income to struggling families but could also generate significant additional revenue.
Do not buy into the false promise of tax reductions for the struggling working family. Their tax rates are already low. Rebates are much more progressive.
The CarbonTax.org web site has a good overview of the carbon tax and how it can be made into a progressive tax through flat rebates.
L
I know it is a great argument to tell working folk you are going to tax the rich, but why do you need to - especially when, by scrapping the defense budget you can deliver on your promises and provided major tax reductions for the middle class.
Why would you be arguing to add another tax stream to the endless torrent of our money flowing into Washington?
What is PROGRESSIVE about taxes??????
If you want to, "tax the well to do," just stop servicing the national debt. Who owns that?
If you want to reduce our national carbon footprint, just reduce the work week ONE DAY - to a four day, 32 hour, work week.
Bingo! 10-15 percent drop in fuel consumption overnight, and hardly taxing to the economy, since a reduction from 40 hours to 30 hours was proposed SEVENTY SIX YEARS AGO!
SEVENTY SIX!
You guys are pretty much just the way the GOP paints you: tax and spend
And you need to get over it. It is really quite pathological.
Spoken like a true son of the GOP. If people have a roof over their head, food on the table, and cable tv, any further relief is like doling out money to welfare queens!
Why should they pay any taxes when 750 billion is being spent cruising aircraft carriers around the Pacific?
The writing was on the wall in the 70s. We were over the proverbial oil barrel then and, whether you subscribe to peak oil or not, we're over the barrel again. Reagan's answer to Carter's baby steps to wean American from its dependence on foreign oil was to rip the solar panels from the White House. Imagine what a different situation we'd be in now if America had made a lasting commitment to alternative energy.
Drilling in ANWR will only prolong the inevitable at a terrible cost to the environment (when Exxon pays for the fouling of Prince William Sound we can talk about drilling in ANWR). We will never see a renaissance in Detroit (or in any industry where pots of money are waiting to be made) if we don't get ahead of the fuel efficiency/new technology curve, if our politicians don't break away from the special interests vested in the status quo.
I seriously doubt OPEC is meeting to address the cost of oil out of the goodness of their hearts. It's in their interest to head the push for alternative energy off at the pass by keeping their product affordable.
In the end you cannot legislate conservation and forcing higher milage increases deaths. You cannot get something for nothing. The free market enforces the level of conservation and fuel milage through the basic laws of supply and demand.
I really hope the Dems campaign on that stupid idea.
Regarding your own post, there's one thing that I don't fully understand. You say that Obama's plan will eventually reduce demand for gasoline over the long term. So, that's a pretty long horizon. And then you balk at using the same long horizon for the effects of that policy on the price of gas.
Why not be consistent and admit that Obama has no plan whatsoever to reduce gas prices, either over the short term, or over the long term?
If you think the earth is warming . . . tax.
If the price of gas is high . . . tax.
People are smarter than that and know a tax is not a solution.
The answer is indeed a tax. A carbon tax. A revenue neutral carbon tax of $200 dollars per ton of carbon dioxide. Simple to implement and hard to game; it would provide adequate incentive to develop an energy efficient economy.
Flat rebates of half of the $1.2 trillion dollars a year that it would bring in; $4500 rebate check each year per household. The rest would eliminate the Republican's $500 billion dollar a year deficit, leaving $100 billion per year to guide the development of a energy efficient infrastructure.
"Faced this week with the opportunity to actually do something to address high gas prices, invest in alternatives and move toward energy independence, Republicans in the Senate once again chose the path of obstruction, just as they did with historic global warming legislation last week.
"Over the last eight years, President Bush, Vice President Cheney and their Republican allies in Congress have fallen over themselves to give oil companies huge tax breaks. They have repeatedly blocked meaningful progress toward energy independence and they have shown no interest in taking on the unchecked speculation that has created extreme volatility in energy markets and pushed oil and gas prices upward."
She's absolutely right. That's why gas prices have risen 46 cents every year under the GOP, whereas - according to the unfriendly spin of Bush 's EPA- they'd rise 2-1/2 cents under this bill. 46 minus 2-1/2 equals 43-1/2 cents savings at the pump - per year. So even if you accept Bush EPA calculations, it should have been possible to SAVE money by reducing speculation and greed . That can't happen if the oil cartel remains in power.
As for the person who talks about "Democrats" and the word "TAX": a) The bill is not a Democratic bill; it's sponsored by two NON-Democrats (Warner and Lieberman): b) the word "tax" is nowhere in the bill's name, much less in Boxer's introduction of it.
Boxer's bill will make the price of gas go UP, but that will "address high gas prices".
Enough of the double-talk already. America is tired of double-talk by the Dems in Congress.
There are 2 schools of thought on this subject.
1. Centralized government control: Liberals support this approach.
2. Free market-decentralized approach: republicans favor this.
My take is that approach number 2 is the most workable way with maybe some minimal regulation to make sure we do in fact protect the environment to the best extent possible. I think it is utterly arrogant to assume anyone in government knows the magic formula for our energy needs. Government does not in fact have a very good track record picking winners and losers in the marketplace (providing subsidies, ect). This kind of central control is what really brought down countries like Russia. I just don't see socialism working.
So I take it you are not in favor of subsidies to businesses or individuals...correct? Fine, I agree with you. I think such subsidies are actually unconstiutional. So no oil company or ethenol producer or farmer or any entity should be entitled to my hard earned tax money. Incidently, oil companies have been getting tax breaks and subsidies for many, many years...long before Bush came on the scene. So I do not know why you guys blame Bush for these taxpayer handouts.
The Iraq war is the direct and single cause of rising gas prices. Iraq is the third largest oil reserve yet is eportig oil far below invasion levels
If drilling in Anwar, etc was so important, why didn't the Failure Party get it going when they had control of the Senate, House AND the WH?
This crap about opening up natural reserves is a straw man argument to shift the focus away from the deregulation that McBush's economic advisor, Phil Gramm and Mrs. Phil Gramm head of the Commodity Futures Trading Commission, 88-93, pushed through engendering the speculation in oil that has spiraled the price of oil to it's present high.
We have another Enron going on right now in the oil futures market that is just starting to come to light.
This is moral corruption at the highest levels. It will only stop when we stop thinking that there are major differences between the parties. Nader was right.
Our Republican administration is wishing for magic wands. Just inherited $10 million. Republicans think times are tough and you need a tax break. Your out of a job, Republicans this is tough.
Enough! We need to elect Democrats. As many as possible.
So you think a teapot museum is a good idea?
Republican cowardice is sending the bill for our current budget to our children. $500 billion dollars a year in deficit spending! A Republican administration and a Republican congress for 7 years and these cowards could not balance the budget. They are leaving us with a $9 trillion dollar national debt.
Our bridges are falling into rivers, levies are failing, our solders are being put into harms way based on lies and fraud, but you want to talk about teapots! Pathetic.
If the cost of raw goods goes up, by what exponent should profits increase?
Any student of basic economics can answer this somewhat loaded question.
Any takers?
Carter was a joke and glad that Bush will take his title of worst President ever from him.