A Terrible Idea

If a politician got up and said: "I propose we have the US Treasury write a check to the oil companies in the amount of millions of dollars," it's hard to imagine it gaining much support.

But if you propose the exact same policy and call it a "gas tax holiday," you might get somewhere.

Read Dean Baker on McCain (and now Clinton's!) terrible idea.

Comments (46)

1. yeah - this is even stupider than the middle class tax rebate. i know we hate it, but we should really look at raising gas taxes and developing a viable public transportation system in the country. a nationwide high tech train system could be much more efficient than the current airbus system. smaller to mid sized cities in the sunbelt are long overdue for good public transportation. kind of funny how over a half century ago electric streetcars were a commen sight in smaller cities nationwide until the auto industries destroyed them by donating new cars to city councilmen around the country...

   Posted by ibbleblibble at 04/29/2008 @ 09:48am

2. I realize I have been called "stupid" and "naive" many times on these forums, but I need to ask the question....Why is the "gas tax holiday" writing a check to the oil companies?

   I understand the argument regarding losing the tax revenue for infrastructure uses (and don't disagree).

   I assume (and yes I know about assuming) you are arguing this lowering of cost will spur demand and earn the oil companies more profit.

   Please help me understand your argument.

   Posted by Chilly Willy at 04/29/2008 @ 10:12am

3. Posted by ibbleblibble at 04/29/2008

   I never heard that story.

   I heard in L.A. it was Judge Doom trying to wipe out Toon Town!

   heheh

   Posted by Mask at 04/29/2008 @ 10:13am

4. I'm afraid I'm not following: If the 18.5 cents is lopped of the gas price, true the gov't is not getting it, but if this saves me, say, $20 a week in gas expense (and whether people will save from this or not depends on their behavior, not some declaration of success or failure by a pundit)and I take that $20 and go take my wife to the movies, how am I giving it to the oil companies?

   It's funny how some always get upset whenever the possibility of the average joe having a little more money in his pocket appears. Maybe the guy on the other blog was right when he said there's a subconcious notion in libs mind that the peoples money really belongs to the state so any rebates of ones own money is considered an expense. Funny, I consider the Govt my expense.

   Posted by CHIP THORNTON at 04/29/2008 @ 10:13am

5. Gas prices are like tort reform. Once those costs go up, they ain't comin' down. Seriously it just means that we will underfund our highways, not get 15 cents off a gallon of gas. Just like tort reform is supposed to lower the costs of medicine, it doesn't those insurance premiums don't change in any meaningful way to tort reform measures. The problem is that when we do these "fixes' they are poorly targeted.

   If you wanted to reduce the cost of gas, increase supply or refining capacity (mandate it). Mandate higher fuel economies in cars. Mandate lower insurance premiums in states that limit liability etc etc... All the government seems to do is enable corporations to operate with a lower overhead.

   Posted by Tzimisce at 04/29/2008 @ 10:13am

6. It's funny how some always get upset whenever the possibility of the average joe having a little more money in his pocket appears. Maybe the guy on the other blog was right when he said there's a subconcious notion in libs mind that the peoples money really belongs to the state so any rebates of ones own money is considered an expense. Funny, I consider the Govt my expense. Posted by CHIP THORNTON at 04/29/2008

   The problem is not your sanctimonious attitude that libs don't want people to have money, that if you will excuse me is fucking absurd. It's that measures like this are weak and illtargeted. Hell I like the 600 dollar rebate checks, at least those are direct and to American citizens. Excuse many people on the lefts very real cynicism when it comes to big oil and its ability to extort the average American.

   Posted by Tzimisce at 04/29/2008 @ 10:17am

7. Problem, politically, is...if McCain is selling it and Her Majesty is selling it too...Obama will.

   Now, that's not to say it's a bad idea...just to say that opposition to it is going to be pretty dicey and it's likely that some other Democrats in Congress might take it up and run with it too.

   Posted by Mask at 04/29/2008 @ 10:21am

8. BTW, is J Street now allowing comments? (ONE up-side to the new web format)...

   or have they just not gotten around to erasing them yet this morning?

   Posted by Mask at 04/29/2008 @ 10:22am

9. Posted by Mask at 04/29/2008 | ignore this person

   i remember a documentary - moyers? nova? - that covered the subject. apparantly GM, who was the big bus maker, lobbied municipalities across the country to tear up the electric street car tracks. there would be a big debate and all of a sudden city council members, many who had opposed tearing up the streetcar systems, were seen driving around in brand new buicks and voting to tear up the streetcar tracks!

   wouldn't you really rather have a buick?

   lol

   i'm 100% against the tax break, but i am haveing a bit of a rough time seeing how this is helping oil companies make anything more than a short spurt of profits.

   ultimately its just throwing fuel onto the fire. kind of insane, actually.

   here schmuks! here's some money. now go spend it! hurry! profits are down. we need to give you money so you can spend so we can make money!

   like bailing out the titanic with a couple of buckets..

   Posted by ibbleblibble at 04/29/2008 @ 10:24am

10. Posted by Mask at 04/29/2008 | ignore this person

    i've always found the no comment part of j-street kinda bizarre.

    i mean they write up a sort of short, discussion generating pieces - then NO COMMENT ALLOWED!

    huh?

    Posted by ibbleblibble at 04/29/2008 @ 10:27am

11. TZIM, You never answered my question, old boy, how am I giving it to the oil companies? And quite frankly, another lib trait seems to center on the rightness or wrongness of a rebate based on how big it is. Like, would it have to be $6000 before you make them stop stealing from you? Anytime the gov gives me my own money back I'm happy, cause then I can use it for food or my kids books or car payments in stead of knowing its being spent on the next crackbrained social program to come down the pike

    Posted by CHIP THORNTON at 04/29/2008 @ 10:37am

12. This sort of issue though is the exact sort of thing that is indicative of the old politics. Is it really bold leadership to offer an 18 cent reduction in a gas tax for the length of the summer, and do fuck nothing about any other real issues that get to the heart of the problem.

    Again like I said before it's exactly like tort reform. Oh that sounds so good, we need to lower punitive damages which will lower premiums or at least make the system better. It doesn't. It just makes people feel good.

    It is about time that we start to trying to address the real issues with real policy, instead of like ibble said bailing out the titanic with a couple of buckets.

    Posted by Tzimisce at 04/29/2008 @ 10:37am

13. Posted by CHIP THORNTON at 04/29/2008

    Another neo-con trait is to believe in the rightness and morality of the freemarket and especially big oil. Look if the checks were 6, 60, 600, 6000 it would at least be directly targeted to my pocket. The argument for gas tax holidays being a bad idea is that they work under one basic assumption, that there is competition within the oil and gas market. The point is, that gasoline and oil are not very elastic and people will pay more as the price goes up, what is the incentive to lower pump prices if people will pay whatever and there is little competition?

    I live in Kentucky and a few years back Indiana had a gas holiday for the summer, were prices any lower across the bridge? Nope.

    Posted by Tzimisce at 04/29/2008 @ 10:43am

14. Posted by JOMAMMA at 04/29/2008

    Because as we all know the free market is perfectly able and willing to respond to every and all problems. I mean there's no such thing as economic famine right? Man that unregulated free market when it came to loans and banking did just a whiz-bang job recently.

    I'm not trying to advocate 100% socialism and no one else on this site is by and large. They want a regulated market to protect people from the very real dangers of an unrestrained free market. Because the free market has no conscious, it doesn't protect the weak and it isn't very adept at forward thought. How long has this gas crisis been looming? And we are really only now starting to address this issue because of how expensive things have become.

    Posted by Tzimisce at 04/29/2008 @ 10:51am

15. My experience has been that if you drop the gas tax, the price at the pump will simply go up do fill the void. Consequently more bridges are going to fall into the rivers. Why doesn't the congress stop oil companies from selling the same barrel of oil on the mercantile several times over? i.e. if oil leaves the oil well at 14.00 a barrel and arrives at the refinery at 120.00 a barrel and t.Boone Pickens claims an 800% profit couldn't congress get involved or are they all so corrupt that we have lost our country?

    Posted by julien38 at 04/29/2008 @ 10:52am

16. It is about time that we start to trying to address the real issues with real policy, instead of like ibble said bailing out the titanic with a couple of buckets.

    Posted by Tzimisce at 04/29/2008 | ignore this person

    TZIM, you can mandate things all you like, but like many mandates, you run the very real risk of entities saying, "if you are forcing me to do something that is not profitable, I won't do anything at all." Sound like that won't happen? It did. The gov't mandated price controls on gas in the 70's. What happened? Shortages because the refineries etc. stopped producing at all because there was no profit.

    Fast forward to the late 90's. California mandated 10% of all vehicles sold in CA must be "zero emission" (electric). What happened? The auto companies tried to make the technology work, spent BILLIONS trying to develop a product the market would accept (anyone remember the EV1?). Then after the market wasn't ready, the auto makers went to CA and said, "fine, we can't make a vehicle people want, so we won't sell in CA.

    The bottom line is, you cannot mandate and policy your way out of economic problems. You can create incentives that make up the profit difference (but oh no, we can't give big corporations incentives, well you better if you are MANDATING them to do something), or you can work with the parties involved to create a workable solution that does not punish people for success.

    Posted by Chilly Willy at 04/29/2008 @ 10:53am

17. Posted by JOMAMMA at 04/29/2008 | ignore this person

    well, i still see one suv after another whizing about with one whole soccer mom or suburban power ranger guy driving back and forth to work and play...whining all the way about how expensive gasoline is...

    is the demand from china and india going to subside? what about after the summer of no gas tax? will gas not reach current taxed levels ever if we did away with gas tax permanently?

    hmmm...oh yeah - THATS TOMORROW! PFFFFTT! WHO CARE ABOUT TOMORROW? KIDS? GRANDKIDS? FUTURE GENERATIONS?

    Posted by ibbleblibble at 04/29/2008 @ 10:53am

18. Posted by julien38 at 04/29/2008

    Doesn't that lead to the dreaded creeping socialism that the wingnuts threaten will happen? I mean they have to be right because the results of their policies were just so good, right?

    Posted by Tzimisce at 04/29/2008 @ 10:55am

19. And thanks to Al Gore, by the way, the oil co. have a strange set of bed fellows.

    Posted by julien38 at 04/29/2008 @ 10:55am

20. How does "real policy" equal mandates? It could mean some mandates but yeah that would be a bad idea to just mandate things left and right. I would totally agree that incentives need to be given in order to spur the market in one direction or another.

    Posted by Tzimisce at 04/29/2008 @ 10:57am

21. TZIM, I have no love for the oil companies, I simply laud any opportunity to get some of my own money back. You misunderstand: My fervent hope is that some entreprenuer, some "Bill Gates" of the energy world comes down the pike and turns the whole energy industry on its head. They own the world, and with their industry AND the Govt making about the same on every gallon of gas, we can expect no real help from either. The day of oil is over: especially cheap oil, and I'd weather the economic storm that would result from the disruption of a world institution if I thought the end result would be a cheap alternative to take us into the future.

    BTW, You don't live anywhere near Louisville, do you? I lived there when I was a kid and have relatives in Lexington.

    Chip

    Posted by CHIP THORNTON at 04/29/2008 @ 10:58am

22. Posted by CHIP THORNTON at 04/29/2008

    I live in Louisville now, used to live in Henderson, Ky (near Evansville, In). I see we've reached some agreement here, because I agree with everything you said.

    Posted by Tzimisce at 04/29/2008 @ 11:01am

23. I've only been to Lexington a few times, but the bluegrass and horse farms are sort of breathtaking.

    Posted by Tzimisce at 04/29/2008 @ 11:08am

24. prints would be from China, India and the rest walking over us..

    Posted by JOMAMMA at 04/29/2008 |

    ah the nation of grasshoppers! the last glorious summers of hedonist consumption. while we pig folk scoot about in our vanity and gluttony chariots, deluding ourselves with fantasies of our greatness and importance, wondering who the next idol will be...the long dreaded crash approaches. i guess we should go ahead and pass that summer funtime gas tax break. nothing like fond memories...and fond memories are oh so important in evil times...

    no, JOMAMMA...i think we should continue down the well worn social/economic path your satano-aynrando christo-corporate-fascist heroes have us on right now!

    the longer we live in this reality denying disneyworld the sooner it will come crashing down. rather than half heartedly devoting ourselves to wise management and justice, all the while struggling against well funded satanic corporate demigods thowing monkey wrenches and hillary clintons in the way of progress, the longer we delay an honest commitment to sustainable civilization and real progress for more than the elite ceo class.

    and indeed - the stupid masses of masochistic, pop culturally lobotomized idiots incapable of critical thought or paying attention to complex, discomforting reality for more than a half minute before going back to masturbating/being shocked over photos of half naked 15 year olds...

    GLORY GLORY HALLELUJAH! THIS IS THE DREAM OF OUR FOREFATHERS! THIS IS THE PINNACLE OF HUMAN SOCIAL EVOLUTION!

    GAWD BLESS THUH USA!

    Posted by ibbleblibble at 04/29/2008 @ 11:10am

25. Posted by ibbleblibble at 04/29/2008

    Well, kind of dubious.

    Remember, "personal" transportation really wasn't that unknown at the turn of the century...it was called a "horse" (and/or "buggy).

    Their replacement by automobiles, was a logical extension of the personal (i.e. individual) means of transport people were already used to. Trolleys and street cars were fine, but if you wanted to go someplace specific...and not wait around til the #7 took you there, after making 4-5 other stops, a personal auto seemed like a pretty good deal.

    I think you're conflating personal choice...and a "conspiracy theory"!

    Posted by Mask at 04/29/2008 @ 11:11am

26. Posted by ibbleblibble at 04/29/2008

    Holy adjectives Batman!

    Posted by Tzimisce at 04/29/2008 @ 11:13am

27. TZIM Well, I'll be damned. I lived off of Goldsmith Lane in Bon Air. Bardstown Rd was sort of the main drag. Thats funny

    Posted by CHIP THORNTON at 04/29/2008 @ 11:20am

28. Good for you Euler, seriously: And if I ever find a job that close to home where I can do that, I probably will, cause I'd rather use my money for other things. In the meantime, I need to drive. Thats just the way it is (unless I want to stop eating)

    Posted by CHIP THORNTON at 04/29/2008 @ 11:24am

29. I've been on a gas tax holiday ever since I decided to ride a bicycle whenever possible anywhere within 10 miles. It's good exercise, it's fun, and it costs nothing. My car has had a full tank of gas for almost two months.

    If this holiday does go through, what I expect to see as I pedal past the local gas stations this summer on my way to work is that if gas prices do drop initially, the lower prices and summer driving will increase demand and reduce supply, raising the taxless price to near pre-"holiday" prices.

    I won't be surprised to see the post-holiday prices at least, say, 18.5 cents higher than the pre-holiday prices. Meanwhile, we'll have taken millions from the infrastructure fund and made no lasting progress.

    For those who are able, please consider using part of the tax rebate check to buy a bicycle if you don't own one. You'll save money, increase your overall fitness, and probably even have fun.

    Posted by aesova at 04/29/2008 @ 11:26am

30. if this doesn't work for you, move!

    Posted by Euler at 04/29/2008

    Isn't that what Sam Kinison suggested to the starving Ethiopians???

    Posted by Mask at 04/29/2008 @ 11:39am

31. TZIM Well, I'll be damned. I lived off of Goldsmith Lane in Bon Air. Bardstown Rd was sort of the main drag. Thats funny

    Posted by CHIP THORNTON at 04/29/2008 |

    I know exactly where that is. I used to live in the Highlands behind Wick's Pizza. (I'm going to miss Wick's when i leave Louisville).

    Posted by Tzimisce at 04/29/2008 @ 11:42am

32. " The auto companies tried to make the technology work, spent BILLIONS trying to develop a product the market would accept (anyone remember the EV1?). "

    Posted by Chilly Willy at 04/29/2008

    GM grudgingly accepted the mandates, then sabotaged the EV1 in a passive-aggressive, back-door campaign which included buying the patents for the Ovonics batteries and burying them.

    Few corporations deserve to fail as much as GM.

    Posted by drhammer at 04/29/2008 @ 11:46am

33. By the way, did I mention that this new format sucks?

    Posted by drhammer at 04/29/2008 @ 11:47am

34. lol - i dont know, folks...

    i've lived in/visited the third world (and i don't mean the walled off touristy parts) and i see the vast majority of my fellow countrymen as so far disconnected from reality, so incapable of distinguishing between that which is needed and that which is desired...and so arrogantly, ignorantly vain...that i feel like going home and playing computer games for several hours and thinking about naked elves...

    Posted by ibbleblibble at 04/29/2008 @ 11:48am

35. "...the new alternatives will come flying forth..."

    Posted by JOMAMMA at 04/29/2008

    Let me refer back to my most recent post.

    Research the subject of Stanford Ovshinsky, an innovator and inventor of the kind you allude to in your post.

    Posted by drhammer at 04/29/2008 @ 11:56am

36. Posted by drhammer at 04/29/2008

    Did I mention...drhammer is right!

    Geez, "Nation" you starting to see a pattern of responses to this new format...and do you care?

    Posted by Mask at 04/29/2008 @ 11:59am

37. Few of us were taught anything about the Great American Streetcar Scandal.

    When my peers accuse me of trafficking in conspiracy theory over the technologies that the auto manufacturers and the oil companies have conspired to suppress, I advise them to check out the Streetcar Scandal.

    We don't have to concern ourselves with learning from history if no one bothers to teach it to us in the first place...

    Posted by drhammer at 04/29/2008 @ 12:03pm

38. Are you paying attention, Nation folks?

    Mask and I are agreeing...

    Posted by drhammer at 04/29/2008 @ 12:06pm

39. perhaps a return to the old format might be a good idea and release the new when ready, instead of torturing us all with this Beta version.

    Posted by JOMAMMA at 04/29/2008 | ignore this person

    amen...

    Posted by ibbleblibble at 04/29/2008 @ 12:15pm

40. Isn't that what Sam Kinison suggested to the starving Ethiopians??? Posted by Mask at 04/29/2008

    It is true that fod does not grow well in sand.

    Posted by Benchrest at 04/29/2008 @ 12:47pm

41. food

    Posted by Benchrest at 04/29/2008 @ 12:48pm

42. Mr. Hayes, your past refusals to allow comments on your J Street 'blog' always smacked of elitism mixed evenly with cowardice. I suppose you have suddenly sprouted a pair and are too busy staring at them to notice that comments are being made, or more likely that the new format is so f'd-up that your delete function is not working properly. Either way, you can take your new found graciousness and shove it.

    Posted by Benchrest at 04/29/2008 @ 1:10pm

43. "They no longer teach real history in the public schools any more.."

    Posted by JOMAMMA at 04/29/2008

    Before you get wound up in another diatribe about teachers' unions, I should mention that I am 55 years old, and the product of an "old school" education, not one filled with concerns of self-image or political correctness. I was an honor roll student, and I paid attention. In my K-12 years, ('58-'71), I was never taught this stuff.

    Posted by drhammer at 04/29/2008 @ 1:29pm

44. GM grudgingly accepted the mandates, then sabotaged the EV1 in a passive-aggressive, back-door campaign which included buying the patents for the Ovonics batteries and burying them.

    Few corporations deserve to fail as much as GM.

    Posted by drhammer at 04/29/2008 | ignore this person

    Were you there? In the auto companies? I was, and I lead a team of college students building the first hybrids and competing them in the early 90's.

    The point is not whether the EV's worked, it is they were not desired in the marketplace. Hence my point, you cannot mandate a market. Economics (capitalism, socialism, communism, any ism you want) does not work that way.

    Posted by Chilly Willy at 04/29/2008 @ 2:57pm

45. What is really amazing is how lame this discussion here is. Posters either believing the market is God, or who just want to 'guide' the markets.

    And this is the Nation. No wonder the country is in a right wing toilet.

    Both McCain and Clinton are just bribing the electorate - vote for me, I'll give you X dollars. To hell with the infrastructure or the real causes of oil price rises.

    Posted by ElyDog at 04/29/2008 @ 3:18pm

46. Ely??

    What are the real causes of oil price increases?

    Posted by Chilly Willy at 04/29/2008 @ 3:21pm