This morning, I had to wake up to another article about John McCain’s and Hillary Clinton’s proposal to temporarily waive the gas tax this summer. That’s it. I’m just going to have to come out and say it: this is a really, really, really stupid idea. Period.
I’m not an economist–far from it–but you don’t have to be one to see the flaws in this plan. I’m not going to go into the details too much here, but for more check out this article from the Washington Post or this op-ed from Thomas Friedman. Also, Jake has a nice summary at Pure Pedantry. The intended purpose of this gas tax suspension is to supposedly lower the price that drivers will have to pay at the pumps, putting more money in the hands of consumers, encouraging an increase in gas production, and hopefully stimulating the sluggish economy. This is a total pipe dream, though, as basic economic theory dictates that under these circumstances, cutting out the taxes is unlikely to significantly reduce prices at all (see links above for details). Instead, steady prices and decreased taxes will just lead to larger profits for the oil companies. Such fuzzy, counterproductive, and industry-friendly economic logic seems perfectly at home in the Republican Party, but Democrats should be aghast that Clinton is even considering such a proposal.
The even greater absurdity here is that lower gas prices–as politically popular as they might be–are not a such a worthy goal for a society that is serious about addressing global warming, as they only encourage the same habits that have put us on the brink of environmental disaster (not to mention that they’ve also forced us into so many deadly foreign entanglements). If anything, we should be increasing the gas tax, not only as a tool to help curb emissions (currently, the US has one of the world’s lowest gas taxes but highest gas consumption), but as a way to encourage further innovation in alternative fuels. Naturally, the increased tax revenues should go toward the development of renewable and cleaner energy sources. Of course, this is just a pipe dream right now as well, since Congress lately hasn’t even been capable of extending basic tax credits for renewable energy sources.
Despite the flawed nature of her and McCain’s gas tax suspension proposal, Clinton has been on the attack, continuing to try to paint Barack Obama–the one presidential candidate who has had the political will to resist such transparent pandering–as elitist and out-of-touch with the American people. (This was the subject of today’s article.) Although this isn’t out of character for her campaign, it’s still striking just how cynical and desperate these attacks have become. At the end of the day, Clinton can say what she likes about Obama, but at least he’s not out-of-touch with reality–as she seems to be–and hopefully voters won’t lose sight of that fact.