February 28, 2006

IT SERVES W'S ENDS:

Americans Are Cautiously Open to Gas Tax Rise, Poll Shows (LOUIS UCHITELLE and MEGAN THEE, 2/28/06, NY Times)

The nationwide telephone poll, conducted Wednesday through Sunday, suggested that a gasoline tax increase that brought measurable results would be acceptable to a majority of Americans.

Neither the Bush administration nor Democratic Party leaders make that distinction. Both are opposed to increasing the gasoline tax as a means of discouraging consumption, although President Bush, in recent speeches, has called for the development of alternative energy to reduce dependence on foreign oil.

Eighty-five percent of the 1,018 adults polled opposed an increase in the federal gasoline tax, suggesting that politicians have good reason to steer away from so unpopular a measure. But 55 percent said they would support an increase in the tax, which has been 18.4 cents a gallon since 1993, if it did in fact reduce dependence on foreign oil. Fifty-nine percent were in favor if the result was less gasoline consumption and less global warming. The margin of sampling error is plus or minus three percentage points.


The key is not to just raise the taxes on gasoline but at the same time to reduce income taxes, thereby serving one of the President's primary goals of switching to a system that taxes consumption and encourages savings. Sell it as a security measure, let the Left emphasize the environment and the Right its anti-Arab component ,and you've got a doable tax reform.

Posted by Orrin Judd at February 28, 2006 12:19 PM
Comments

Another thought would be to use it to fund the "transition costs" of Social Security Reform.

Either is a good idea, but I think your linkage idea is easier to sell.

Would that this could have been done when prices were at $3.00. It wouldn't even have been noticed.

Posted by: Bruno at February 28, 2006 12:40 PM

Maybe a majority because on Saturday and Sunday those who answered their phones weren't out driving their cars.

Posted by: Rick T. at February 28, 2006 1:29 PM

The only conservative way to raise the gas tax is to include in its price *all* costs associated with its usage, including the anti-terrorism efforts and wars necessary to counter the world's various petro-dictators and the terrorist groups that they sponsor.

Posted by: ras at February 28, 2006 2:09 PM

The rightist version of "It's all about the oil" is such a fascinating fantasy. I'm not sure if it's the "What if" history facet, or its American-centricity and lefty "root causes" whine, or its blindness to the actual nature of our enemies. Here we are in 2006 and nothing's going to change that; our enemies intend our destruction, and nothing we do short of beating them is going to change that; the United States closing the spigot tomorrow and not taking another drop of middle eastern oil will not change our military commitments or lower our military expenditures by one cent nor is it the panacea that will end anti-American terrorism.

Posted by: David Cohen at February 28, 2006 2:17 PM

The gas tax will disproportionately affect low income Americans. Eliminate taxes at the lowest bracket first, then work the way up until the effect is revenue neutral. No tax breaks for high brackets until the ones below them are totally eliminated. A slight increase in the Earned Income Tax Credit may also be in order.

Any income tax reduction that changes the higher brackets would be unjust.

Posted by: Chris Durnell at February 28, 2006 2:18 PM

David:

Yes, if it wouldn't goose our R&D, transform the tax code, and bring back trains it would be only a marginally good idea.

Posted by: oj at February 28, 2006 2:22 PM

I'm just chuckling to myself thinking about OJ's "Corn-Fired Trains Transit System, Inc." IPO. Too bad you can't still short more shares than actually exist like you could back in the early 90's.

Posted by: John Resnick at February 28, 2006 2:55 PM

Eliminate taxes at the lowest bracket first, then work the way up until the effect is revenue neutral.

If you cut the lowest income brackets too far you create an entitlement class that is immune to increases in spending.

Every taxpayer should pay some tax related to income. Otherwise you get a Tytler-style scenario where big chunk of voters will perpetually vote for euro-spending.

Posted by: Gideon at February 28, 2006 3:48 PM

Also have to agree with Dilbert on this one.

Posted by: Rick T. at February 28, 2006 4:15 PM

David: Wow! Great stuff.

There is a way in which the West could buy a semblance of peace for a few years. We all know what that is.

If we are not willing to throw Israel to the wolves we are going to have to be ready to aid the "reformation" of Islam the way we aided the "reformation" of Shinto.


Posted by: Lou Gots at February 28, 2006 5:27 PM

Bingo! Thank G-d for Lou Gotts

Posted by: David Cohen at February 28, 2006 5:35 PM

You enlisting David? I'm sure Lou's got his piece in hand and ready to go.

Posted by: Genecis at February 28, 2006 5:46 PM

David Cohen:

In the short term you're undoubtedly correct, but long term, removing America's economic interest in the Middle East would reduce future military commitments and spending, and lower America's profile in the Middle East, which should result in less external provocation of Muslims and a less fertile ground for terror recruitment.
Out of sight, out of mind, right ?

Further, removing American demand for crude from the global oil markets would dramatically reduce the resources available to Islamofascist terror organizations, whether al-Qaeda or Hamas.

Yes, the 9/11 mission only cost "x" small amount, but the mission depended on a large effort to recruit, plan, train, and support the operatives for years before 9/11. That organization spent "y" large amount to support the mission of the 9/11 "tip of the spear" operatives.
To grasp the full picture of the challenge facing us, we must speak of logistics and not just tactics, yes ?

Based on what al-Qaeda and allied groups have managed (and failed) to accomplish since 9/11, it seems probable to me that if they're starved of petro-dollars, they'll devolve into criminal gangs centered around smuggling drugs and weapons, and basically give up terror attacks.

Also, the global collapse of oil prices would put Middle Eastern and African petro-societies in a bad way, and much of the frustration and rage that members of those societies feel, due to being left well behind by the rest of humanity, might finally come home to roost against their corrupt and incompetent governments.
In the long run, that would be a good thing.

As for the "corn-fired train", there's no reason at all not to run America's locomotives on biodiesel produced from algae.
Nor any reason not to run America's automobiles on the same.

Posted by: Michael Herdegen [TypeKey Profile Page] at February 28, 2006 10:03 PM

Michael: That's nuts. It's magical thinking.

We hardly buy any middle eastern petroleum as it stands, so it's hard to say that buying petroleum is why we're involved in the middle east. Regardless of whether we're buying Arab petroleum, the navy is going to be policing freedom of the seas -- something we do in the South China Sea and Bay of Bengal as well as the Persian Gulf.

We're not going to withdraw our security guarantee from Israel or from Japan or from Europe.

We're not going to put a burkha on Madonna or a muzzle on Eminem.

We're not going to start toppling over stone walls on homosexuals.

We're not going to stop being a Crusader nation.

All of the things that the jihadists give as reasons for their hate are still going to exist.

I have no idea why you think that impoverishing this population is going to deradicalize it. On the other hand, Al Qaeda's total annual budget prior to 9/11 was $30 million. That's pocket change. Walmart's advertising budget, by way of comparison, is over $700 million dollars. It is simply not possible for us to impoverish the middle east so that the terrorists can't afford to strike at us.

We can't tax ourselves to victory. We can only achieve victory by winning.

Posted by: David Cohen at February 28, 2006 11:32 PM

Michael, the Saudis already said the world finds a way off oil, massive transfers of wealth will be needed.

Even more resentment, relying on the crusaders.

Posted by: Sandy P. at February 28, 2006 11:49 PM

David Cohen:

Absent oil, post-Cold War, why exactly DO you think that America has any vital national interest in the Middle East ?

What's nuts is thinking that oil has nothing to do with America's Middle East policy.

We hardly buy any middle eastern petroleum as it stands, so it's hard to say that buying petroleum is why we're involved in the middle east.

In 2004, America imported almost 900,000,000 barrels of crude oil from Persian Gulf nations, including Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates.
That was very nearly a quarter of ALL American imports of oil.

Further, American oil imports alone make up nearly 13% of the ENTIRE WORLD'S total oil usage.
Since oil is largely fungible, what counts most is total global supply vs. total global demand. If Middle Eastern exports were restricted, it would drive up the cost of oil for America, regardless of whether any oil was purchased directly from the Middle East or not.
That's what OPEC was all about, in the 70s.

That's also why the U.S. care in the slightest about what happens in the Middle East - we can't afford NOT to.
The only solutions to that are to use less crude, or to produce more domestically.

Jihadists don't hate America because of Madonna, Eminem, Japan, or homosexuals, and America is hardly a "Crusader nation", except metaphorically. I'd be happier if we were.

Israel is a sore spot for jihadis, but that's not why they began to strike at America directly.
After all, Israel was around for 40 years before the intense targeting of America and American interests began.

This whole thing is an externalized Saudi civil war, and America is aligned with the Saudi establishment. THAT is why the jihadis hate us; while they may have contempt for Americans for allowing women to brazenly strut about with their heads and arms uncovered, they don't care to risk death to teach us the error of our gutter-loving ways.

I have no idea why you think that impoverishing this population is going to deradicalize it.

I don't. I think that impoverishing that population will increase their radicalization.

However, it will also decrease their ability to strike at America, and redirect their anger towards their own "leaders" - as I wrote earlier.

Al Qaeda's total annual budget prior to 9/11 was $30 million. That's pocket change. [...] It is simply not possible for us to impoverish the middle east so that the terrorists can't afford to strike at us.

Pocket change by American gov't standards, not by many individual's standards.
Remember, that's $ 30 million in "pocket change" year after year after year, not a one-time grant; and even a one-time grant of 30 large is well beyond the means of virtually every single person on Earth.

Unless you're arguing that al-Qaeda is funded by Middle Eastern governments, and not by rich individuals and various Islamic "charities"...

If a lack of funding can't prevent al-Qaeda from striking America, then to what do you attribute the post-9/11 lack of terror in America ?

A diabolical plan to lull us into complacency ?
(Actually, if that's the plan, it's working).

Sandy P.:

Yes, sooner or later in the 21st century, whether America continues to gulp oil or learns to sip, the Middle East will require massive amounts of aid to alleviate widespread hunger.

Hopefully by that time they'll be tired of self-destructive, dysfunctional behavior, and will simply be grateful for a crust of bread.

Posted by: Michael Herdegen [TypeKey Profile Page] at March 1, 2006 2:45 AM

Al Qaeda is currently ineffective because we've killed its leaders, closed its camps, disrupted its communications and overthrown its hosts. That's the way we're going to win this war. Nonetheless, it has still been able to carry out two successful attacks in Europe -- which, by the way, suggests that (as they have consistently claimed) your "root causes" aren't their "root causes."

We import 900 billion barrels of oil a year from the Persian Gulf. Assume for a moment that "Persian Gulf" is the same as "middle east" and that imports from Qatar have the same implications as imports from Saudi Arabia. That is less than 20% of our petroleum imports of 4.8 trillion barrels per year. It is about 13% of our total petroleum usage, which includes 1.9 trillion barrels of domestic production. More to the point, it is only 5% of our total annual energy usage, of which about 40% comes from petroleum. It is tiny.

It doesn't matter whether you think we're a Crusader nation; it only matters that bin Laden thinks that we're a Crusader nation. But, I forgot, you completely dismiss bin Laden, Arabs and Muslims as an independent actors who will come to their own conclusions and act as they see fit. We don't need to listen to what they say. They are just automotons who we can destroy if only we increase the gas tax.

You are partially correct that part of this is our being dragged into Saudi domestic politics. ("Civil War" strikes me as overly grandiose, but that's quibbling.) bin Laden traces his opposition to us to the first Gulf War and, in part, to the stationing of Crusader troops in the land of the two mosques. This is interesting historically, but there's not much we can do about it. I don't see that driving Iraq out of Kuwait was wrong. I don't see that keeping Iraq out of SA was wrong. It is, in a way, about the oil, but only in terms of our protecting the international economy -- something we're going to continue to do even if we shift 5% of our energy consumption away from Persian Gulf oil. Obviously, we should have finished the job at the time -- but that is water over the bridge.

Here we are in 2006 at war with Al Qaeda and militant Islam. We can't just tax ourselves to victory.

Posted by: David Cohen at March 1, 2006 8:45 AM

Actually, it's ineffective because no one wants their society run along the lines it proposes. Of course, they don't want their societies run the way they are now and oil props up the existing governments. Weaning ourselves off of oil is good for them too.

Posted by: oj at March 1, 2006 8:52 AM

I agree with all of that, but it's not relevant to anything we're discussing here.

Posted by: David Cohen at March 1, 2006 9:38 AM

Of course it is. If we use less gasoline the petro-states will be able to rely on it less as a revenue source.

Posted by: oj at March 1, 2006 9:44 AM

David Cohen:

If oil imports from the Middle East are only a "tiny" part of America's energy usage, then you should have no objection to America making a minor adjustment in our energy policy, right ?

In any case, what's most important is NOT what percentage the U.S. import from the Middle East, but rather how much oil we import IN TOTAL.

Since crude oil is mostly an interchangeable commodity, and since it's sold in a world market, we have to reduce American imports of crude oil from ANY source, even if we really just want to affect the Middle East producers and Nigeria.
If it's true that petroleum accounts for 40% of America's energy consumption, then 25% of America's total annual energy needs are being met with imported petroleum.
THAT is what we need to reduce.

By the way, which oil exporting non-Persian-Gulf nations would you place in "the Middle East" ?
Libya ?

But, I forgot, you completely dismiss bin Laden, Arabs and Muslims as an independent actors who will come to their own conclusions and act as they see fit. We don't need to listen to what they say. They are just automotons who we can destroy if only we increase the gas tax.

I think that you must be confusing me with somebody else.

Posted by: Michael Herdegen [TypeKey Profile Page] at March 1, 2006 10:47 AM

At least you understand what Michael seems to ignore, which is that we would have to change over a substantial portion of the 40% of our energy usage that currently comes from petroleum to have any effect. But all that would do would be to lower the price, not begger the Arabs. Even so we will never make them so poor that terrorism will be priced out of the market.

Remember that the middle east is the low-cost producer of petroleum, and probably can produce profitably at $20 per barrel. As a result, any substitution away from petroleum might lower the price for middle eastern oil, but won't stop them from selling it profitably. Al Qaeda had its heyday during a period of cheap oil. The only way around that problem would be for us to embargo middle eastern oil, which would be a complete disaster.

We'd have a much better chance coming at it from the other end: a stable democracy and a diverse economy allied with a reformed Islam will do more to minimize terrorism within the US than any pipe-dream of moving the US or, as would actually be necessary, the entire world off of oil -- which still wouldn't accomplish what the righty "it's all about oil" fantasists believe.

Now, if we're serious about decreasing our use of oil, there is some low hanging fruit. First, focus on the worst-performing vehicles. Outlawing the 10% of cars with the worst mileage would have a measurable effect on gasoline consumption at a relatively small cost. If we feel badly for poor teenagers, who are the most effected, we can "take" their cars and pay them fair market value.

Also, 33% of petroleum is not used for transportation. Phasing out the use of petroleum for heating and electricity generation makes a lot of sense. Similarly, I think it would make sense to promote electric vehicles for in-town travel and I have no particular problem with promoting the use of gas/electric hybrids in the short-term. Of course, this would require us to increase our use of coal fired and nuclear plants.

Posted by: David Cohen at March 1, 2006 10:59 AM

That last was in response to OJ.

Michael: Now you've completely lost your mind. The world market doesn't end at the US border. 100% of our petroleum usage is part of the world market. That's exactly why these schemes won't work.

My objection is not to a minor shift in energy policy. I couldn't care less if we buy oil from the middle east. (My distinction between the middle east and the Persian Gulf, which probably was telegraphic at best, was that buying oil from Qatar, for example, doesn't have the same political implications as buying oil from Saudi Arabia. Don't make the mistake the opponents of the port deal make -- not all Arabs are the same.) I have, in context, a minor objection to mucking around with the market for no payoff whatsoever. I have a major objection to your plan to capitulate to terror, which is pusillanimous.

Make no mistake, Michael, unless you are contemplating -- as you clearly are -- reneging on our security undertakings with Israel, Egypt, Saudi Arabia, Japan, Europe, Afghanistan and, most importantly, Iraq, and abandoning our efforts to establish democracy in the middle east, then your entire program, even if it could work, would make absolutely no difference whatsoever to our security. Of course, if we do abandon our allies and our principles, then we've effectively set the price tag for getting the US to do anything our enemies want in foreign affairs at 5000 US deaths. I assume you understand why that might not be a good idea.

Of course you think bin Laden's an automaton. You are convinced that, acting unilaterally and changing only our energy policy, you can stop him from acting despite everything he has said that negates your theory. He is not an actual person to you, only a cipher you can deploy as you see fit.

Posted by: David Cohen at March 1, 2006 11:15 AM

David:

Yes, taxes, tolls, CAFE standards, etc. are all good means.

Posted by: oj at March 1, 2006 11:31 AM

Depends on the ends.

Posted by: David Cohen at March 1, 2006 12:00 PM

David, you're making quite a few assumptions based on inference that I don't think can be supported by what I've actually written, here or in any other thread.

Posted by: Michael Herdegen [TypeKey Profile Page] at March 1, 2006 12:18 PM

Michael: I apologize if I'm misjudging you, but I think it more likely that you are ignoring the implications of your position.

As I understand it, you are arguing that we should shift resources into a search for and subsidy of oil substitutes because, once we shift to a non-petroleum based (non-imported-petroleum based? non-middle-eastern petroleum based?) economy, we will have no further interest in the middle east, will no longer be present there and, as a result of "out of sight, out of mind" will no longer be the target of the Islamacists' wrath.

That only works if we abandon our allies, give up our policing of the seas, embargo the Arab world and, ultimately, abandon foreign trade (because Europe, Japan, India and China are going to keep buying middle eastern oil and any trade we do with those economies will promote that use), which is another way of saying that it won't work -- even if bin Laden and his ilk are lying about their motivations and are willing to give up the dream of the Caliphate, for which I see no evidence; even if we could make petroleum worthless, which we can't; and even if penury would stop terrorism, which it wouldn't.

Posted by: David Cohen at March 1, 2006 12:59 PM

They won't make gasoline-engined cars if we aren't a market for them.

Posted by: oj at March 1, 2006 1:06 PM

And how long do you expect it to take before there is no market in the US for gasoline cars?

Posted by: David Cohen at March 1, 2006 1:25 PM

It's imminent, thirty or forty years. We could speed that though via gas taxes, efficiency standards, etc.

Posted by: oj at March 1, 2006 1:30 PM

Yes, we should shift resources into oil substitutes.
Not "a search for" oil substitutes, because we already have a dozen workable alternatives, particularly in combination.

Once we shift to a non-petroleum based economy, or at least to a non-imported-petroleum based economy, we will have much less interest in the middle east, we will no longer be present there in large numbers, and as a result of butting out of the internal affairs of the benighted and evil kingdom that hosts Mecca, will no longer be the primary target of the Islamacists' wrath.

Your desire to maintain the status quo reeks of realpolitik. There may have been a time when we had to support vomit-inducing regimes, to prevent a greater evil, but that time is past.

America will not be the only hyperpower forever, and so we should use this temporary freedom of action to order the world as we'd like it.

We don't need to abandon any democratic ally to make a shift away from fossil petroleum work, nor do we need to give up trade, nor would we need to stop policing the seas.

Why do you believe that any of that follows logically from ending fossil petroleum use in America ?

Patrolling shipping lanes is very cheap compared to commiting hundreds of thousands of ground troops to years of deployment, which is what we'd be attempting to avoid.

We don't need to drive the price of crude oil down to zero, just lower it enough to put a big hurt on terror-supporting societies, whether it's supported by the government, as in Iran, or individual members of society, as in Arabia.

It's not necessary to get the entire world to give up fossil oil, although Orrin is correct in that many advanced nations would follow our lead.
The U.S. use so very much oil that if our demand ceased, world prices would plummet like an entangled parachute.

But let us suppose that I am wrong, and that penury wouldn't greatly reduce terrorism - all of the terrorists being McGyvers who can wreak havoc on a dollar a day, and travel globally without buying airline tickets and documents.

How do you propose to establish "stable democracies with diverse economies, allied with a reformed Islam" ?

Can we force Islam to reform ?
Orrin just kind of assumes that it'll happen naturally; I assume that it probably won't, and they'll mostly sink into extreme poverty and irrelevance, being hostile to change.

Can we talk them into becoming democracies, stable or not ?
Or will it have to be forced upon them, as in Iraq ?

"Diverse economies" is the easiest, and even there only a handful of petro-states are laying the groundwork for prosperity after the oil.
And the oil money will run out, eventually.
As you point out, Persian Gulf nations have a very low cost of production, which means that the world is using up that region's resources first.

When the Persian Gulf is sucked dry, America will still have vast reserves of petroleum, just more expensive petroleum.

Posted by: Michael Herdegen [TypeKey Profile Page] at March 1, 2006 2:06 PM

No, 30-40 years seems just about right to me.

Posted by: David Cohen at March 1, 2006 2:07 PM
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