A Terrible Idea

posted by Christopher Hayes on 04/29/2008 @ 09:38am

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Comments (48)

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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 (48)

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
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
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
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
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
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
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
Posted by ibbleblibble at 04/29/2008

Are you serious? raise gas taxes? After a doubling of gas prices twice in 8 months? Don't you think the people have been hit hard enough with the world demand that has already increased the price of gas?... and considering the largest piece of the price of a gallon of gas is already the taxes(crude cost at 72% being the highest and 13% tax next)...lets see how the voters react to a another tax on them to make their driving and their lives more difficult. Do you really think by making gas more expensive for the average pereson and in the proces, slowly killing of their economy, that the idea of a gas tax is a good sell, muchless a good thing?

Blaming oil companies is not the answer...windfall taxes will simply drive the companies away to other markets...and make your gas even higher and less available.

The high high price is from higher demand by India and China,...and speculators...not because oil companies make record profits...farmers are makng record profits on corn too, should we tax them? If corn was sold for $ 1.5 last year and $ 6.00 this year, would not that be record profits for the farmer? Any consideration that the cost to the farmer next year to grow the corn will eat into the profits? Ditto for oil or any other commodity.

Can you not see that this would be a disaster for the average consumer? And business, as they pass the tax on in increased costs....and to remain competitvie, they would have to cut costs, incurring MORE jobs moving to areas les costly and taxed? Consumerswill cut back their usage due to the price as is...you do understand that there is not shortage of crude in the world, don't you? And more is found everyday and the world will be using it for another generation or so...but at the 9idea of taxing it more can and will slow our economy down to the point of stalling due to consumers not bjying and industry not producing, that there is a real danger of collapse...back to the day of electric trolleys...and umeployment...Trans continental trains are great like Europe, but the cost per mile to construct here, plus the enviromental impact slow downs, legal shit for right of ways, union rules will make gas seem cheap at $ 10. a gallon...

You are dreaming...we need to drill for our own oil that is all around us and lessen our dependence on over seas oil and use our own...the oil sands and shale oil contain more oil that the ME..we should use it..and our off shores and the Gulf of Mexico is an ocean of oil we should be drilling to get...not letting the Chinese drill there instead becasue ALGORE lost his mind and wants us to stop living.

Posted by JOMAMMA at 04/29/2008 @ 10:30am
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
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
Perhaps the one way to finally get rid of the progressive socialistic dream is for us to actually vote it in...and then get out of the way as they kill off every producing venue in the country, and watch as the tar, feathers and pitch forks come out as the entire other 85% of the population goes hunting for the far left with a vengence, when the entire economy tanks...and a depression is upon us...but hey, we wouldn't be making any carbon foot prints, would we...the only foot prints would be from China, India and the rest walking over us..

Posted by JOMAMMA at 04/29/2008 @ 10:42am
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
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
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
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
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
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
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
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
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
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
There is plenty of crude to go and your grand children will be using oil...maybe not in their cars, but they will use it...the gas tax staying where it is is fine, the elimination of it is just a political joke....but you need to understand...the market and the competition is not bewteen EXXON and Arco for your oil dollar...it is competition between China, India, the rest of the world and you(US) for the available crude...we could be drilling here, using oil sands more and shale, all the while decreasing our reliance on the ME...The left always says..there isn't enough here to make much of a real difference..well, the left said back in the 70s with JIMMA that oil would run out before the 90s...instead, they found thrice the known reserves....and more is still here..we need to go get it..start using our oil rigs in the Gulf of Mexico where there is an ocean of oil..like Brazils new find, bigger than the ME if added up..

an increased tax now is insane...I am glad the Suv's are whizzing by...your gas tax will not stop those with the talents and brains to earn a higher income..I will just pass the costs of increased taxes and fuel on to my customers...no, your gas tax will hurt those you "care" about the most...those can not afford gas when it was $2.00 a gallon...

and as for bullet trains like Europe...I would love it and use it...but building those same railroads would take YEARS OF ENVIROMENTAL WACKO STUDIES, BRIBING THE UNIONS TO NOT OVEWR LOAD THE JOB SITE WITH RULES AND MAFIA, AND LAWYERS SUING EVERY 10 YARDS FOR RIGHT OF WAY CONTRACTS...(See The BIG DIG in Boston)..fucking govt boon doggle, that tax payers in Boston didn't pay for...the US did.. all this would make $ 10 a gallon oil look cheap.

You are dreaming up the rest of us a nightmare..

Posted by JOMAMMA at 04/29/2008 @ 11:09am
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
Posted by ibbleblibble at 04/29/2008

Holy adjectives Batman!

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

The soliutions to the oil"crisis" will not, is never and will never be found at the govt or in a baurcratic elephant..it will come from the same place it always doies in the US...from neccessity of the current times by some guy in his garage......unless you destroy his incentive...which the left has masterd...we have no oil crisis, we have a pricing problem driven by a huge increase in demand, not the big bad oil company, but by consumers else where in the world... forcing the people to use less by not letting them use the product will not improve costs, spur other sources of energy or "saving hte world by stopping our usage as the rest of the world continues to use....

If you want to se changes in gas usage that are real solutions, let the people use what they can, and as the REAL shortages become apparent, which they are not now, the new alternatives will come flying forth...and not one from washington or ALGORES of the world.

Posted by JOMAMMA at 04/29/2008 @ 11:21am
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
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
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
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
" 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
By the way, did I mention that this new format sucks?

Posted by drhammer at 04/29/2008 @ 11:47am
"...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
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
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
Are you paying attention, Nation folks?

Mask and I are agreeing...

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

So he sold out instead of getting investors? I will have to read up on him...

Our little company will mostlikely be bought out in the next 2-5 years...gotta keep an eye out...

I lived in Indiana and was told that all the railroads that traversed the state were bought up by the Tire companies there.. wouldn't be too surprised...

And this site is terrible and not improving at all on the fore mentioned mistakes and problems...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 @ 12:12pm
Posted by drhammer at 04/29/2008

They no longer teach real history in the public schools any more...most high schoolers can not ID the Founding Fathers, who they are by names or even spell them...why would one expect fore thought to reflect on the past issues when all that matters is that they all feel good about themselves inspite of not being able read, add, or aspire to anything more than hourly work...

Lenos man on the street is the real truth about our edcation system and how it has performed.

Doomed to repeat history? Hell, they don't even know it.

Posted by JOMAMMA at 04/29/2008 @ 12:20pm
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
food

Posted by Benchrest at 04/29/2008 @ 12:48pm
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
"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
I am exactly as you down to the years in school...and I was taught it all....so you do not have to wind yourself up as to my anti union issue...it ain't in this one

This is not an anti union rant, rather the curriculum issue..

Posted by JOMAMMA at 04/29/2008 @ 1:52pm
I grew up in Minnesota during those years..the most liberal loon fest in America at the time..and I was taught in a public school....but today the schools, the curriculum, and the liberals are all more...left.

Posted by JOMAMMA at 04/29/2008 @ 2:12pm
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
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
Ely??

What are the real causes of oil price increases?

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

What are the real causes of oil price increases?

Posted by Chilly Willy at 04/29/2008 | Ely??

What are the real causes of oil price increases?

Posted by Chilly Willy at 04/29/2008

Sounds like he is a ranger from Norhtern Minnesota....

but most likely he will come up with the standard liberal montra that Bush and Cheney just want to make their buddies rich in the oil companies...and ignore the doubling and redoubling of demand in Asia, other developing nations and the inability of expanding production in the US of ANY energy forms by the libs and enviromental wackos..

Just a wild guess here..

Chilly,

Is it true that the hyrids do not are not any more energy efficient than small cars with out a battery?

Posted by JOMAMMA at 04/29/2008 @ 4:54pm