Krauthammer Gets His Wish

Friday, June 06, 2008

Over the years, I have noticed Charles Krauthammer occasionally talking about what a great idea he thinks raising gasoline taxes through the roof would be. (In fact he has been advocating this for a quarter century now.)

So today, at RealClear Politics, I was only mildly piqued by the title of his latest column: "At $4, Everybody Gets Rational". I took a look at it, not really expecting to end up blogging it, and yet....

You first get a whirlwind tour of the efficiency of the free market as it responds to a crisis from someone who appreciates the effectiveness of capitalism, at least on some level. Not only are Americans driving less, they're looking for fuel efficiency in the cars they buy.

At $4 a gallon, the fleet composition is changing spontaneously and overnight, not over the 13 years mandated by Congress. (Even Stalin had the modesty to restrict himself to five-year plans.) Just Tuesday, GM announced that it would shutter four SUV and truck plants, add a third shift to its compact and midsize sedan plants in Ohio and Michigan, and green light for 2010 the Chevy Volt, an electric hybrid.
So much for arbitrary federal fuel efficiency standards and deadlines pulled out of thin air. Although this fuel shortage is at least partially artificial, we can see that the market is perfectly capable of responding to it effectively without Uncle Sam pointing a gun to our heads.

And then, just as you are beginning to wonder how Kratuhammer is going to defend his high tax mantra in the face of this, you get....

An admission of being in the wrong and an apology?

No!

You get a big gust of carbon dioxide-laden hot air from the same mouth.

You also get, incidentally, a whirlwind tour of another kind: How little an appreciation for how the market works really means to someone who shares the same fundamental morality and politics -- altruism-collectivism -- as the environmentalists. You also see, in the process, how blind or evasive such a person can be to the exact same flaws he just demonstrated in someone else's big government schemes when they certainly would exist in his own.
But instead of doing the obvious -- tax the damn thing -- we go through spasms of destructive alternatives, such as efficiency standards, ethanol mandates, and now a crazy carbon cap-and-trade system the Senate is debating this week. These are infinitely complex mandates for inefficiency and invitations to corruption. But they have a singular virtue: They hide the cost to the American consumer.

This is insanity. For 25 years and with utter futility ..., I have been advocating the cure: a U.S. energy tax as a way to curtail consumption and keep the money at home. In this space in May 2004 (and again in November 2005), I called for "the government -- through a tax -- to establish a new floor for gasoline," by fully taxing any drop in price below a certain benchmark. [He uses $4.00 now. --ed] The point was to suppress demand and to keep the savings (from any subsequent world price drop) at home in the U.S. Treasury rather than going abroad. At the time, oil was $41 a barrel. [This would be $87.00 in 2007 dollars. --ed] It is now $123.

...

Announce a schedule of gas tax hikes of 50 cents every six months for the next two years. And put a tax floor under $4 gasoline... [bold added]
Apparently, the market is spectacular and rational to someone like Krauthammer only when it achieves a goal -- lower demand for gasoline -- that he happens to like. If the market isn't working towards that goal, then it's time to whip out the jawbones and knock some sense into those car-driving dolts.

Individual rights is the first casualty -- why not defend American property rights from nationalization abroad with military force and at home by not confiscating our money in the first place -- and the resourcefulness of the petroleum industry is the second.

What would happen if there were a floor to the price of gas? Oil companies could not compete for customers on price beyond a certain point. In fact, to maximize profits on gasoline, they'd have the perverse "incentive" to make what they charge as close to $4.00 a gallon as possible.

One way I can easily think of to make such prices "necessary" is by not developing any new drilling or refining capacity that might make it cheap to supply gasoline. Hmmm. That sounds oddly familiar. I guess that to the extent that you don't need arcane government regulations and a bloated bureaucracy to strangle the petroleum industry, Krauthammer is right about the "open and honest" efficiency of taxation....

But we'd get those arcane regulations and a bloated bureaucracy anyway.

Either the government would have to hike other taxes to replace this cornucopia of revenue that Krauthammer seems convinced the government would see or it would have to start heavily regulating the private take on a gallon of gas. It would do both, of course.

And as for making sure those greedy oil barons at every damned corner gas station didn't take too much of "our" -- I mean, the government's -- money, its incentive, of, course, would be to squeeze every last cent out of that artificial $4.00 price. And I am sure some officials might want to skim off some of that for themselves -- and there'd be kickbacks to any cooperative station operators, of course.

This would go on and on until someone exposed the corruption "inherent in 'capitalism'" and then we'd probably have Krauthammer telling us that the only way we could "wean ourselves off of oil" would be for the government to get rid of all those regulations and bureaucrats by simply nationalizing the oil industry.

Just because someone calls himself a conservative and claims to dislike government regulations and corruption does not make him a friend of capitalism or individual rights.

Charles Krauthmmer's objective of "weaning" America off of oil is fundamentally the same as that of the Greens. Since oil is something we need -- because it provides us the energy we need to live our lives at the lowest cost -- such a goal is at odds with our well-being and is, as such, immoral and (as I hope I have indicated), impractical to anyone interested in remaining alive and pursuing his happiness.

-- CAV

Updates

Today
: Added missing link to column.

10 comments:

z said...

At yahoo.com they are touting "The Death of the SUV" with glee. Like "Independence Day" and "freedom of speech", I think the "pursuit of happiness" is fast becoming an oft used but rather empty phrase, reminding me of the tree in Atlas Shrugged. It sounds good, and people employ these phrases on a daily basis, but the real meaning has been lost. The right to the pursuit of happiness is gone.

Gus Van Horn said...

I've noticed that anti-SUV euphoria for awhile....

To put it mildly, I dislike SUVs, but for entirely different reasons than leftists do. So, while I won't miss having idiots who have no business driving truck-sized vehicles nearly killing me on a daily basis, I don't share the glee.

As for "pursuit of happiness", I refuse to let that phrase die. It names what I am fighting for and if I have to explain its meaning to someone anew every day, so be it.

z said...

Two things: Worse than it dying, actually having it lose it's meaning. While people still use the phrase, they actually won't allow others to pursue their happiness, e.g. build refineries to have cheap energy for their SUV's. So like the oak tree, it's still there, but its hollow.

Also, its interesting to me that you are not the only person to correlate bad drivers with SUV's. I guess I don't notice because I drive a truck. To me, all the little cars are aggravating because they don't signal, etc. I saw on a yahoo forum that that was a frequent complaint against SUV's. I guess bad drivers drive all sizes of autos but perhaps SUV's are bigger and more noticeable.

Gus Van Horn said...

"I guess bad drivers drive all sizes of autos..."

Quite true.

" "... but perhaps SUV's are bigger and more noticeable."

And much more dangerous in the hands of an incompetent or careless driver.

Mark V. Kormes said...

Thanks for this, Gus. I've linked to you at my livejournal blog Rational Passion.

Krauthammer and Jonah Goldberg are perhaps the two conservative op-ed writers I like the most. But they are, to say the least, very flawed in their own ways.

Gus Van Horn said...

Mark,

Thanks for the link.

I, too, admire some of Krauthammer's other work, but this had always bothered me about him.

And it bothers me a lot more now that I've thought about it a little more. But then, that's something one frequently notices about conservatives over time....

Gus

Inspector said...

Gus,

See, I like SUV's just fine, but this illustrates an interesting point: When the Left hates something, it does tend to make any genuine dislike of it rather tricky. I don't much like Starbucks (too expensive) or Wal-Mart (smelly, shoddy, full of weirdos) but I can't stand the nonsense the Left throws out about them so I can't really properly oppose them. I either lose my gusto or end up actually sticking up for them as the lunacy of the attacks against them is infinitely more detestable than they are.

Gus Van Horn said...

I see such situations -- and there are many -- as opportunities for intellectual activism.

For example, I used Linux a decade ago when Microsoft was unjustly in hot anti-trust water.

For leftist Microsoft haters who thought I was a fellow traveler, I got to disabuse them of the notion and confront them with the fact that some people did NOT think that justice was on their side, if not educate them about the nonobjective nature of antitrust law.

And then there were some who seemed to equate standing up for Microsoft's rights with blindness to the many flaws in its products. I got to straighten out a few of those types, too.

Inspector said...

Ah, that is a bright side, I suppose.

Give 'em hell, Gus!

Gus Van Horn said...

Heh! That's what I'm for!