May 2009

Maybe this is why I’m a Republican.  I have a healthy distrust of government when it comes to finding new ways of taxing its citizenry so that the government can allocate (spend) those resources instead.  While I think Republicans have gone significantly overboard in their opposition to tax increases and support for most tax decreases, Republican distrust of government distrust of public spending at the expense of private spending is fundamentally healthy.

While I reserve judgment on President Obama’s newest plan to raise taxes–his plan to raise $210 billion from “curbing offshore tax havens and corporate tax breaks”–I have suspicions that it but the move of dedicated big spender seeking new sources of revenue to fund his expansive federal social agenda.  The story can be found in the New York Times’ Obama Asks Curb on Use of Havens to Reduce Taxes.  It is the source of the quotation above. 

I’m not going to say much more.  I don’t know enough about the details, but I am suspicious.  This proposal needs thorough vetting on Capital Hill and elsewhere.  There is much we all need to learn about the pros and the cons of the proposal before we make it law.    

There is a must-read opinion column in the Washington Post this morning by Robert J. Samuelson.  It’s entitled The Bias Against Oil and Gas.  It is spot-on.

Energy is critical to the healthy functioning of the U.S. economy.  It is, therefore, a crucially important issue for President Obama to get right–to address in a rational manner.  The point here is that Obama’s “bias” against oil and natural gas will have consequences.  These consequences include failure of his “energy policy” and quite possibly failure of his economic policy upon which so much, even rhetorically, rides on the over-estimated potential of renewable energy.  Worse yet, it means that Republicans may be handed an issue, when oil prices once again soar (and oil prices will again soar, trust me), that gets them re-elected before they deserve to be.  The loser will be the country.

The point here, and I am certain the prime motivation behind Mr. Samuelson penning the piece he did, is that there is time to correct course.  There is still time to get it right.

There are a couple of reasons in particular why someone as brilliant as Mr. Obama has gotten this issue so terribly wrong.   One, and at the top of my list, is that our president doesn’t really understand energy policy.  This is understandable.  Although Illinois is an oil and natural gas producing state, it is not Texas.  While once a significant producer, Illinois’ production has declined and oil’s economic significance to the state is limited.  Additionally, spending a career in Chicago and so little time as a Senator representing the entire state, President Obama has had little opportunity to be educated.  Thus he, like most Americans, has learned about energy not by first hand experience but by what he’s been informed about energy, and particularly about oil and natural gas, by popular culture.  Popular culture tells us that oil is dirty and is bad for people and the planet and the way to move ahead is to not drill any more dirty oil wells.  It tells us that solar and wind are clean and abundant and we must only try harder and that will be our future.  As nice as this sounds, however, it is myth.

Another reason Obama has this wrong is alluded to in Mr. Samuelson’s column.  It is the power of the environmental groups and the fact, quoting Mr. Samuelson that “[t]o many environmentalists, expanding fossil fuel production is a cardinal sin.”  Given that environmental groups are an important contituency of the Democratic Party, Democrats are loathe to challenge its orthodoxy.  Yet a rational energy and economic policy demands a overt challenge.  Unless challenged it will lead the country down a path that does not lead to energy self-sufficiency.  It will lead to even more oil imports in the years ahead.

Expanding domestic oil production is not inconsistent with our country’s, and the world’s need, to limit the burning of fossil fuels in the years ahead.  That need is properly addressed through legislation that will begin to put a cost on the burning of fossil fuels so as to discourage its use.  In the meantime, the goal of this country needs to be moving as much production as it feasibly can back to this country.  We must never lose sight that every barrel not produced at home will otherwise have to be imported.  And every barrel of oil imported amounts to hundreds of billions of dollars and thousands of jobs going overseas.

Energy and economic policy will only work if built on a rational foundation.  It is time to re-lay the footings and begin to construct an energy policy that has architectural grounding.