Letters to the Editor
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Self-Fulfilling
In effect, a high price of oil acts as a de facto carbon tax that will inevitably drive investment into exactly those alternative technologies that the Democratic senators want the government to subsidize. Without a doubt, it's a regressive tax that disproportionately hits poor and working-class people. But it might make more long-term strategic sense for congressional Democrats to look for ways to cushion that blow that don't involve pushing down the price of oil. Because actually enacting a carbon tax or cap-and-trade mechanism with teeth is going to be an extremely arduous undertaking, fought every step of the way by energy industry lobbyists.
As was already pointed out on the first page of comments, this isn't even close to right. The fact that the tax hits the wrong people is precisely why the effects are counter-productive. Making the tiny number of speculators richer is paying the very people in the best position to stop buying oil for not doing so.
In other words--it's the same guys getting rich who are buying and flying private jets, maintaining their heated outdoor pools in Connecticut, and buying their kids Humvees.
The poor bastards who Leonard cites as bearing the disproportionate share of this "regressive tax" can't afford to do much about the energy policies of the country.
Oops.
I guess it's indicative, though. The liberal independent media can occasionally miss the point of the rich feeding on the poor because of the current political facts on the ground. Our government is so completely out of step with American sentiment that the policies most informed Americans support would be politically arduous and bitterly opposed by lobbyists.
There's a progressive view. I'm confident we'll continue to run the US into the dirt, too.
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tax the speculators?
I admit I have far from thought through the economic implications but following this idea of creative solutions that don't automatically cause more consumption simply through increasing supply of oil, what about a targeted tax on capital gains specifically accrued in the oil future market? At the right level this might have the effect of discouraging to some extent the rampant speculation - bringing down prices in the way Ed Markey is discussing - but perhaps in the meantime making the redistribution less thoroughly regressive.
It's not a perfect solution and might have unforseen economic consequences I haven't considered but perhaps this is a political winner that might in a sense "launder" a carbon tax into being, at least a small one. After all, fat cat Enron-y speculators make a far easier target (qua Markey) than the "working Americans" whom enemies of the carbon tax will no doubt claim to be protecting.
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A truly dumb idea Mr. Leonard
That's suffices.
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Andrew, love your column, but the last sentence is extremely stupid.
"It probably isn't George Bush's fault that oil prices are about to hit $100 a barrel, although invading Iraq certainly didn't help. But maybe we should be applauding his possible culpability, not condemning it."
Uh, Andy (I can call you Andy, can't I?)
It is George Bush Jr's fault. Almost entirely.
He invaded Iraq. Billions of barrels of oil have gone off the table since. That a big deal all by itself.
He is currently threatening Iran. That stupid thuggery accounts for about $20 of the last increase. If Bush would shut his yap and stop making threats, and if the world wasn't afraid he is crazy enough to actually attack Iran (causing them to close the Straits of Hormuz, and maybe also missilizing the Saudis oil fields) a lot of speculators would be spending their money on other things (another hint--have you noticed that gold is also at an all-time high? That's called hedging against the Apocalypse.)
Finally, Little George hasn't done a damn thing in the last seven years to develop alternatives to imported oil, increase efficiency, or reduce demand. Not a damn thing.
High energy prices are an inevitable consequence (one could reasonably say a deliberate consequence) of George Bush Jr energy policies. Dubya's rich oil bidness buddies are raking in the cash.
The rest of us are paying through the nose.
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Send a message....
That phrase usually marks the beginning of a con job, often performed by the writer/speaker on himself. We sent a message to N. Vietnam by bombing their cities. How did that work out? All over the US, nasty prosecutors go after drug users in order to send a message. We can't allow dying people to use marijuana and have free access to pain killers because that would "send the wrong message".
Sending a message is what a child does by having a temper tantrum. Sending a message is the adult rationalization and cover for striking out in pain and frustration while having no real idea about how to solve a problem. Sending a message is really about conning yourself and others that you are tough and will solve problems created by "bad guys" who will be scared and intimidated by the message. Recall on Glen Greenwalds column a few months ago talking about some right-wing bloggers who felt we were losing the war because we didn't kill enough young sunni men to send a message that we must be feared.
Let them send a message to speculators - they will just laugh because the world is running short of oil. Period and forever. That is a fact and these idiotic message won't change a facts just promote more authoritarian and fascist mindsets.
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One of Bin Laden's complaints
expressed against Europe is over high European Gas taxes -- the taxes that make a US Gallon of Gas in the UK about $8. The rationale is simple -- that money should go to the Middle East oil producers. In effect, Europe as a major consumer depresses overall worldwide demand for oil and thereby price -- using a mechanism that puts a huge amount of revenue in European government coffers.
Now it is fair to say that EU gas taxes do not depress the global price of a barrel of oil as much as they put up the price of a liter or petrol, but they do have a serious impact. If one accepts normal economic logic and price/demand curves, a higher US Federal Gas Tax, imposed at the point of sale would have an even greater effect -- it would effectively depress demand or force the underlying pre-tax price of gasoline down to bring supply/price back into line with demand. However, it would also put money into the Treasury.
I won't do the maths and I won't suggest that like the Laffer curve if taxes go to zero or 100% the line just goes on -- But if the US were to join Europe even in part and say put on a $1 per gallon Federal gas-tax would be about $40 on the results of refining a barrel of oil -- and a good chunk of the impact of such a tax -- may 1/3 to 3/4 would go to force down the global price of oil (and by the way, very marginal differences in demand and supply, maybe a 5% mismatch) are what has driven oil from $26 to $96). The big question people need to ask is whether they would rather the Saudis got the money, or their own government?
If one believes that what is really driving the current surge of gas prices is:
(a) the falling dollar (and fear of its further collapse), which means that 30 day spot prices etc. (Oil to be delivered in 30 days) are being pushed up, because the oil traders are worried about what a dollar will be worth by then
(b) the dumbass rhetoric re. Iran as well as Turkish/Kurdish tensions --
at least (a) would be addressed in part by a gas tax. This because the revenue generated would at least help slow the growth of the Federal deficit. Although realistically, what would really help is somehow shutting Bush and Cheney up and getting a new administration, one devoice of charlatans and idiots.