From the Time magazine of Thursday, Jun. 26, 2008
The Oil Follies? Our Fault
By Michael Kinsley
Quote:
It's interesting to consider what the price of oil would be today if it had been higher in the past. Suppose, for example, that President George W. Bush had used the political gift certificate he was granted on Sept. 11, 2001, when he could have asked Americans to do almost anything in the name of fighting terrorism, to impose a $1.50 "War on Terror" tax on a gallon of gas (instead of squandering his gift certificate on invading Iraq). The price at the time was about $1.50 per gal., so this would have doubled it to $3. People would have screamed with pain, then started adjusting. Demand would have gone down, and today gas would probably be selling for less than the $4 per gal. we're paying. Not only that, but $1.50 of that price would be staying here in the U.S. instead of going to Saudi Arabia or Venezuela or Bahrain.
To the rest of the world, we look like idiots. In fact, regarding oil, we really are idiots.
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Except for the fact that "War on Terror" add-on of $1.50 on a gallon of gas should NOT have been a tax that fills the coffers of the US government but should have been deposited in a special fund which would have been depleted ONLY through offering commercial incentives to manufacturers and USERS of fuel efficient vehicles and technology. Not a penny used for the general obligations of the government. Actually, the "tax" should have been higher ($2.50 to $3.00) and a system where the drivers of Excursions and other gas-guzzlers should have been penalized, and purchasers of hybrid and electrical vehicles GREATLY helped via substantial rebates. Car companies could have maintained higher prices and increase profits on their better vehicles as the purchasers would have a $10,000 or $15,000 "certificate" to tender. This certificate, of course, would have come from the special fund which would have been quite "rich" because of the many individual decisions to keep on buying and driving large SUVs and trucks.
By the way, Michael Kinsley, some of us DID write about the "follies" and the need to hit consumers in the wallet when we could and
should have ... many years ago, and right here on College Confidential.
Right now, people are just praying that King Abdullah and his oil buddies start showing some "mercy." If that were to happen, we would quickky revert to our old habits and wait until the next crisis. While we
have preferred to discourage alternative energy development by holding oil at $20 to $40 per barrel, we have to be realistic that it was a mistake.
While oil will probably tumble down to a more reasonable price level, chances are that we will be none the wiser about how to survive the next crisis. And, yes, to the rest of the world, we look like idiots. In fact, regarding oil, we really are idiots.