Addicted To What?

“The oil companies pass everything on to us, you know. Tax-breaks, no tax-breaks – we’ve got to get off this addiction and when we do, we’ll be free of them. That’s how I look at it.”
    Barbara Boxer, explaining why an excess profits tax on oil companies is a good thing

The oil companies as pushers.  Rehab by government intervention.  This is what passes for policy analysis in the energy-strapped summer of 2008.  Well, as long as we are going to go down the road of argument by pop-culture cliché how about this one: the definition of insanity is doing the same thing over and over in the expectation of different results.

Taxing the excess profits of oil companies during an energy crisis has been tried before.  Didn't work.  It didn't, of course, increase the supply of oil – which is sort of what you are needing to do in a time of shortages.  Neither did it bring in the kind of additional revenue forecast by its supporters.

Other than that, it was a great success.

Today, the idea is back and finding support even among politicians who normally resist the temptations of  demagoguery.

Also, among editorialists: 

Certainly, the oil companies, which are raking in billions in profits, represent a plausible source of revenue, not for the purpose of lowering prices or punishing the companies, but because revenue is necessary to enact the programs needed to make the changes necessary for weaning the nation from oil.
... the revenue from the tax could be used to fund a Manhattan Project-type program to move us toward new technology and new fuels.
      Rutland Herald

This kind of faith that the government would find the solution if it just had a little more money – which it could pry from the hands of those nasty corporations that have too much of it and are only finding oil and bringing it to market anyway – is touching.  But the government already has a lot of money and what it spends that money on is ... oh, take the farm bill.  Who is to say that the government would not spend the revenue from a windfall profits tax on the oil companies on a subsidy to the sugar makers.  That, after all, is what it does with the money it already has.  If we are going to dance with the addiction analogy, let's consider the government's addiction to pork.

And the Manhattan Project analogy?  Well, we did build an A-bomb and that was a great engineering triumph.  And one of the spinoffs of that grand success was nuclear power for civilian use.  But one does not hear anything about using the money from an excess profits tax to build more nuclear plants which is something we could accomplish – the engineering is known – but have denied ourselves permission to do.  More nukes would reduce greenhouse gasses, speed along the day of plug-in cars, and advance the hydrogen agenda.  But, oddly, we don't hear any Senators talking about a Manhattan Project to build twenty or thirty new nuclear plants.

If we are addicted to anything it isn't oil.  It is empty rhetoric and wishful thinking.

Comments

[Green Mtn Punter]

I think we're looking at a major political upheaval in this country as the long, hot summer wears on. Democrats still think they're going to prevail in '08 but I predict they're in for a rude shock; this energy issue has "nuk-e-lur" poten tial, as "W" would say, it's like no issue they've ever faced. It's just a matter of time- certainly by election day- before the Democrats will be feeling the wrath of every motorist who will soon see $60 fillups as the unacceptable price of Democrat special interests, special interests which block adequate supplies of the affordable domestic and off shore oil and gas vitally needed for our economic and national security.

[Brattleboro_Conservative]

Let us not forget that it was big government that started us on our path to addiction by subsidizing highway construction thus ensuring that the railroads could not effectively compete.

As I've said in an earlier post, expensive gasoline is provides an excellent free-market solution to our oil and gas-addicted lifestyle. Public transportation suddenly becomes a much less expensive way of getting around. If the price of gas increases enough, hopefully more will look around and look for ways to reduce our dependency on the automobile in a hurry...