Tuesday, April 29, 2008

Shell Game

Hillary Clinton has joined John McCain and come out in favor of suspending the 18.4 cent per gallon federal gas tax in her quest to be the Ivy League educated Democratic nominee more in touch with the common man. Of course the idea of suspending the federal tax on gas would be almost meaningless and further deepen America's dependence on foreign oil. The reason for the price increases has been America's increasing consumption of oil plus greater demand on the world markets with the growing economies in China and India. Clinton compounds the damaging effects of this scam by proposing greater taxes on oil companies profits. This has prima face logic but would ultimately decrease oil companies' investment in exploration. With oil companies producing less oil and demand increasing worldwide, the price would continue to climb. I'm more or less reflexively in favor of higher corporate taxes but if you are arguing that higher taxes on oil companies will lower fuel prices, you are absolutely wrong. I'm also wondering if she thinks oil prices would rise or fall if the United States "totally obliterate" Iran if Iran attacked Israel.

I'll be willing to bet that Paul Krugman will be completely silent on this meaningful difference between Obama and Clinton and continue to quibble over their nearly identical health plans while acting as the principal apologist in her increasingly nasty campaign.

Ok. I was wrong. Krugman has responded in his blog and it predictably minimizes Clinton's endorsement of a very bad idea and returns to the healthcare issue to attack Obama yet again. It puzzles me how he thinks Clinton's pandering to voters' gas price fears is "pointless". If she were to become president the only way to slow global warning is decreasing consumption of fossil fuels which would require higher gas prices, not lower. She certainly isn't showing any political courage on perhaps the most important public policy issue.