Short View

Thomas L. Friedman, of the New York Times, authored a piece for yesterday's paper entitled "Dumb as We Wanna Be". I encourage you to click and read the op-ed for yourself.

In case you are wanting for time, he deals at first with the ridiculous assertion by presidential candidates Hillary Clinton and John McCain that a tax "holiday", during which the ~$0.18 tax per gallon of gasoline is waived, would be a salve to American pocketbooks burned by high fuel prices. He exposes a snapshot of what the economic cost will be, then rolls forward to talk about the political obstacles that have been erected, intentionally or not, against moving toward green energy. He concludes with the admonition that political egos are responsible for the metaphoric decline in U.S. energy.

His article haunts me. First, know that I am no friend of policies advocating green energy for the sake of averting global warming. So much money has been made terrifying the population, that it is impossible to see carbon-offsetting and electric cars objectively. With all due respect to Ted Turner, I'm not planning to rely on homo sapiens as a food source in the near future.

Where I am swayed, however, is the significant economic impact. The short view espoused by the Clinton and McCain camps belies a pitiful comprehension of even basic economic principle. Worse, the proposal assumes a level of ignorance of the public approached only by professional marketing, which may not be coincidental. Let's break it down for a moment. In what I hope is not a conservative estimate, let's say the average price per gallon of regular unleaded gasoline on June 1, 2008 is $4. Subtract from that cost $0.18 for a total cost per gallon of $3.82. If I drive an SUV, and average 20 gallons per fill-up, then my total is $76.40. Without the tax holiday, my total would be $80, so I would save $3.60. Americans would be far better off if we made two fewer trips to McDonald's per month. This also assumes that the full $0.18 would be removed, but this is unlikely to be true. Suppliers will certainly realize a few more pennies could be added to their bill, and the effect is made even less. Yet, put all this aside, because the total cost to government will be in excess of $10 billion.

I reiterate: the United States government would miss $10 billion in revenue. Imagine an infusion of that cash into college grants, public housing assistance, food programs, AIDS medicine in Africa (all of which certainly won't happen anyway), and you start to get a sense of how vacuous this proposal is. Yet, some look upon Barack Obama's refusal to support the proposal and claim it's another symptom of elitism. He may be the only intelligent person left in the field.

Therefore, the frightening thing is not the energy crisis. This is mostly misconstrued; the problem is not an imminent exhaustion of the oil supply, but rather the bottle neck created by too little refining capacity, which is, by the way, severely restricted by "green energy" policies. We should not be driven toward green solutions out of fear that we'll wake up to CNN reporting that Earth's oil reservoirs are dry, but we should still move that direction.

The oft-cited need to break U.S. dependence on foreign oil springs more from a need to contain an economic tailspin than a need to cut carbon emissions (terrorism aside). This is why I am incensed to learn from this article that there remain oil and gas tax credits. Similar credits for solar and wind energy will expire this December, thanks to "squabbling over pennies" in the Congress. Our representatives in Washington bicker over whether a windfall profits tax should be assessed of companies like Exxon-Mobil, when they cannot help but authorize the institutionalized refusal to collect taxes already owed.

The intricacies of global energy economics is daunting, and I do have sympathy for our elected officials as they struggle to comprehend what action should be taken. Yet, I am intolerant of inaction, as this is not considered a virtue in the great American myth. We need intelligence and strategy that is independent of corporate policy. Continual threats by our President to veto any legislation that even hints to be critical of the oil and gas industry do not help.