his is becoming a pattern.
Twice before in his presidency, Barack Obama has faced a crisis or major challenge. Twice before he has summoned the nation to action. And twice before he has offered solutions that fall woefully short of his own summons.
First: the economic crash. President Obama inherited the worst economic collapse since World War II. He argued that it was not enough to cut interest rates to spur the economy – that a fiscal stimulus was needed as well. The president’s assessment was correct.
Only, when it actually came time to deliver the fiscal stimulus, he cobbled together a pathetically inadequate plan. Obama’s fiscal stimulus was made up of one part rewarmed campaign pander (his tax rebate for everyone earning under $200,000); one part stale Democratic spending wish list; and one part emergency aid to states and localities. The emergency aid had some merit, since it kept public workers in their jobs, delivering services rather than adding to the unemployment figure.
The rest of the plan was junk. At a cost of $800 billion new debt over three years, it bought far less stimulus than we could have purchased with a payroll tax holiday at a price of $480 billion in new debt a year.
Second: health care. President Obama diagnosed this one correctly too. The country could not afford skyrocketing health care costs – costs that hit 17 percent of GDP in 2009. (The next biggest spender, Switzerland, spends 13 percent; most other economically advanced countries, about 11 percent.) He argued that we needed major reform to “bend the cost curve.” Right again. Only, his actual health plan did no cost-bending. Instead, it combined new subsidies, new taxes and new regulations in ways that offer no plausible hope of controlling costs anytime soon.
Now, the Gulf oil spill. President Obama’s much criticized Oval Office address last night made a very good point:
“For decades, we have known the days of cheap and easily accessible oil were numbered. For decades, we’ve talked and talked about the need to end America’s century-long addiction to fossil fuels. And for decades, we have failed to act with the sense of urgency that this challenge requires. Time and again, the path forward has been blocked — not only by oil industry lobbyists, but also by a lack of political courage and candor.”
Indisputable. Does that mean that President Obama is now prepared to offer some of that absent courage and candor?
Far from it!
It’s perfectly obvious what is required to persuade Americans to use less oil: higher prices. It’s equally obvious that high oil prices are ferociously unpopular.
So rather than propose the higher federal taxes to raise oil prices above current levels, Obama indulged in a few paragraphs of musing.
“Some have suggested raising efficiency standards in our buildings like we did in our cars and trucks. Some believe we should set standards to ensure that more of our electricity comes from wind and solar power. Others wonder why the energy industry only spends a fraction of what the high-tech industry does on research and development — and want to rapidly boost our investments in such research and development. All of these approaches have merit, and deserve a fair hearing in the months ahead.”
Now notice a couple of things here:
Buildings are heated and cooled by electricity. About half of America’s electricity comes from coal, about one-quarter from natural gas, about one-fifth from nuclear power, the rest from hydropower and other renewables. Practically none comes from oil.
So when the president talks about wind and solar, he is talking about solutions that have only a very remote connection to the problem he himself has identified.
Notice something else: “Standards” is a euphemism here for “regulation.” As just about everyone agrees, regulation is usually a more expensive and burdensome way to achieve a goal than taxation. But regulation has one great advantage over taxation as a policy tool: Its costs may be higher, but they are far less visible. They are the preferred tool of the politician who lacks courage and candor.
I’m not naming any names. But “some” have suggested we might have one in the Oval Office right now.
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