The Gas tax: Hillary vs Obama
There has been a lot talk about the recent gas tax holiday that Hillary (and McCain) have proposed. And Obama has called pandering. The media, helped by the Obama campaign, has gone along with this characterization of Hillary’s proposal (though oddly that same frame has not been applied to McCain and he is somehow not pandering). And of course there is a huge difference between what Hillary proposed and what McCain proposed that for the most part has been given short shrift. She would pay for hers by collecting the tax from oil companies instead and McCain will yet again put it on the national credit card. So Hillary’s proposal causes no loss in highway funds and no loss of revenue or jobs as Obama has tried to suggest.
The other aspect of this is the suggestion that nearly all economists agree that this is silly and will do no good. Hmm I find that an odd argument. An 18 cent reduction in gas prices is not important (and please don’t bring up the idea that there will be nothing to prevent the gas station owners for taking the windfall for themselves because then you concede there is a windfall to be had)? How about an 18 cent rise in prices? No effect? If that were true then when does a rise in gas prices begin to be important? Is 20 cents enough to have an effect? Is it 25 cents? 35 cents? You see how silly the argument is. And yet Dean Baker, assistant director at the Center for Economic and Policy Research calculates for each penny increase in the cost of gas, U.S. consumers pay an extra billion dollars a year? Sounds like a 4+ billion dollar savings to me (18/ 3 months of summer).
What this is indicative of, however, is the real difference between Obama and Hillary. When regular Americans are feeling the pinch of an economic downturn you can expect a concrete proposal that will take effect immediately from Hillary and you can expect Obama to talk about your pain and do nothing.
I've decided my position on the gas tax thing is now:
I know that Senator Clinton is a tenacious fighter, and once she decides to do something, she can do it. So, I'm just going to expect that 25 days from now we can expect a decrease in gas prices b/c the tax has been lifted, and that the oil companies will now be paying into the highway fund. Additionally, I'm going to expect that gas prices won't rise back up that extra 18 cents.
It's going to be great!
May 6, 2008 8:37 AM | Reply | Permalink
I'm sorry you can't come along with us on this one. We could have used your help.
May 6, 2008 10:11 AM | Reply | Permalink
Wow, you should get a Nobel prize in self deception.
The near unanimous derision of this plan by professional economists and energy and environmental policy folks has nothing to do with politics. There are many Hillary and McCain supporters among them, and I would dare say just a few actually care about people--even the lowly working class-- as much as Mrs. Clinton. Some may even drive themselves and pump their own gas.
This s a bad way to try to help people. (1) It will not lower gas prices appreciably, (2) it discourages the only long-term solution to both energy cost and the environment--conservation-(3) it hurts the highway trust fund (yes Mrs. Clinton has a tax shift plan but has already committed those funds in previous plans), (4)it shows contempt for the people who are trained to design effective policy solutions;(5) it elevates a short term selfish personal objective--getting elected-- above telling people the hard truth.
Yes McCain is guilty of all the same things. But then again no one expects better from him. Mrs. Clinotn is supposedly a great policy expert, so we expect more from her. But then again she is a Clinton and it would seem pandering to get votes will always be more important ot her than fixing the country's problems. Or so it seems.
May 6, 2008 8:39 AM | Reply | Permalink
No way! She's a fighter. If anyone can take on the rules of economics, the consequences of excessive gas use, it's Hillary Clinton. She's going to fight this through both houses and she's going to fight GW to pass a tax on the oil companies, which he loves to do! I'm telling you, it's going to be fantastic to watch!
25 days and counting...
May 6, 2008 8:47 AM | Reply | Permalink
I'm sure you've read the Brookings petition, signed by hundreds of Economists and some Nobel Prize winners to boot.
Can you explain to me why the letter doesn't mention the windfall profits tax?
Seems to me, they're talking about McCain's proposal, not Hillary's, or they're being disingenuous.
Anyway, hoping to hear your explanation soon.
May 6, 2008 9:47 AM | Reply | Permalink
I hadn't read it till now. It's a brief letter, but they should have lengthened it to note that not all the criticisms apply to Senator Clinton's proposal. Without doing so, it is disingenuous. Just to note, I support a windfall tax on the oil companies, but in a way that's more complicated than just a blanket tax on excess profits.
But what I have doubts about is that this is going to get passed by both houses and signed into law by Bush in 25 days.
However, it's a great test of Senator Clinton's abilities. As she consistently tells us, we need a fighter in Washington who can fight and push through legislation that helps us little guys. And the best thing about it is that we don't have to wait long to find out. This is a two-part test for Senator Clinton.
The first due date is 25 days from now. She has to push this legislation, both the lifting of the gas tax and the imposition of the windfall profits tax, in the next 25 days. Because we know she is a fighter, we know she can do this.
The second due date will come just in time for the Democratic Convention, at which point we will be able to look back and decide whether gas prices rose back that 18 cents per gallon.
If she passes both these tests, I'll eat my words.
You worried? ;)
May 6, 2008 10:27 AM | Reply | Permalink
By the way. How could she have committed those excess profits already? Do you have any idea how much obscenely excess profit those assholes are making? Does anybody? Will anybody until she forces them to open their books? The published figures are disgusting enough. What is a Progressive doing defending international oil companies while parents are being forced to choose between food and health insurance for their kids? Since when does a Progressive piss on $30 extra bucks a month for working stiffs? I'm beginning to wonder who you Obamanauts really are.
May 6, 2008 9:52 AM | Reply | Permalink
She hasn't committed them already. People are confusing the windfall tax she's proposed as part of her economic package when she's actually elected President with the one she's proposing for this summer.
May 6, 2008 10:28 AM | Reply | Permalink
Funny stuff here:
http://images.ucomics.com/comics/bs/2008/bs080504.gif
Can you point me to anyone arguing that gas station owners are going to raise prices to capture the savings. Have you read Krugman's explanation or the countless others detailing why suspending the gas tax doesn't work? Do you understand that Hillary will not be able to force a profit tax on oil companies so we do not have the money needed to maintain and repair our infrastructure? And, if we do get a profit tax through at some point that there are far more effective ways to get that money to consumers who need it most to help with energy costs?
May 6, 2008 8:48 AM | Reply | Permalink
"...appreciably." ????
"...has already committed those funds in previous plans" ????
Could you expand on those statements a little?
May 6, 2008 8:52 AM | Reply | Permalink
Oh, dear, bornagaindem, you are fallen deep into sin - you're addressing the substance, such as it is, instead of treating it all as a parable. Well, actually you address that part too, which makes you not only a sinner but a heretic.
The heavy breathing over this gas tax thing from the righteous and respectable classes has been something to behold. Hillary has dared to offer something that, if enacted (which it certainly won't be) might give voters a minor break. How dare she!
Voters know they aren't going to see a dime of that money, but they learned the natural impulse of Obama and his supporters - if they see a drowning man, don't throw him a rope, give him a lecture on water safety instead.
May 6, 2008 9:44 AM | Reply | Permalink
POW! Oh, yeah! Comment of the day!
May 6, 2008 9:54 AM | Reply | Permalink
Well it seems if you're admitting that it's not going to pass and actually save us any money, that she's not throwing us a rope - she's yelling down to us as we drown, "Don't worry! I'm going to save you!"
May 6, 2008 10:30 AM | Reply | Permalink
Okay, I'll try to explain the problem - especially with a summer gas tax "holiday". The summer is when demand is typically highest. So high, in fact, that our refineries are running at full capacity to keep up, and gas prices still rise in the summer anyhow. Why? Because if prices didn't go up, we'd run out of gasoline to buy in the summer.
This doesn't change if we have a gas tax holiday. Since the supply is limited, the price will rise anyhow until the demand is no longer greater than the supply. If you repeal the gas tax, that just means prices will have to rise another $0.18 to compensate to keep demand from being greater than supply.
So, in effect, a summer "holiday" is effectively corporate welfate for the oil refiners in the guise of populist relief.
May 6, 2008 9:53 AM | Reply | Permalink
If you think supply and demand determine the price of gasoline at the pump you are going to learn a lot when Hillary starts opening those oil company books and holding them up for you to examine.
Once again, a so-called analyst leaving out the windfall or excess profits tax part of Clinton's proposal.
Here's my prediction. If she gets the bill through Congress and starts going after the obscene profits of "our" refiners and distributors, the price of gasoline will actually decline. They are cockroaches. They are not going to take this lady on.
May 6, 2008 10:01 AM | Reply | Permalink
Here's the flaw in your reasoning. Getting the tax money to offset, assuming the oil suppliers pass along the savings, and demand stays right where it is with the lower price.
1) Getting the tax money: This will require that legislation introduced gets passed. It won't. But lets assume it does get passed then Bush needs to sign. He won't. So what do you call legislation that you know has no chance of being passed, but looks good. It Does something for the politician and does nothing for the voter. Another word for it: PANDERING.
2) There is only so much gas made in the summer you can't go beyond max output. So if there is a finite supply and you lower prices there is a good chance demand goes up and with it prices. So probably with 30-45 days you are going to wipe out half the savings. By the end of the three months good chance it will be back where it was and then you are going to get hit with 18.4 cent increase in one day. So not only in the end will you have saved nothing you have actually driven the price of gas higher through manipulation. So much for helping the little guy.
So while you truly believe Hillary is offering a solution. She is only offering up a promise she can't keep and I think she knows it. I would hope you are tired of politicians making promises that are hollow.
May 6, 2008 9:57 AM | Reply | Permalink
The only way it won't work is if we don't support her. Neither Clinton nor Obama is going to get their programs through Congress without our support. She can't do it? Not if you won't help. We need your support on this or we can't do it. Without your support, we can't get control of the oil and gas companies. They'll just go on making more and more obscene profits as the oil runs out. Can we count on your support? Hillary has found an issue that can mobilize public opinion and hold the oil companies accountable. By tying the excess profits tax to a little gas holiday she's grabbed the initiative. The oil companies are fighting back. The know this isn't about the tax holiday. Come put your shoulder to the wheel.
May 6, 2008 10:08 AM | Reply | Permalink
Ok. Seriously, I'm on board. Let's see what she's really made of.
May 6, 2008 10:32 AM | Reply | Permalink
Pandering = Seizing the Initiative
Seriously, the gas tax holiday does not help to mobilize public opinion especially when she's confusing it with McCain's proposal.
The excessive profits of oil companies are already clear to the public. I'm all for efforts to better inform the public and pave the way for meaningful change. Hillary is doing the opposite.
Let's talk about removing subsidies. Let's talk about effective approaches to helping people cope with energy costs. Let's talk about alternative energy. Not a dirty bandaid because it might get you a few more votes.
May 6, 2008 11:35 AM | Reply | Permalink