How Can Government Lower Our Fuel Bills?

Any politician who claims that they can actually lower the cost of gasoline in the next 5 years is a liar.

Increases in supply, pretty much all of which are really terrible for the environment, will take at least 5 years to get started:

1. Offshore drilling is sadly probably the best of these.
2. Should the so-called Green Freedom process be able to use solar or wind energy and yet remain cost-competitive, it would be the best option.
Frankly, it still might be the best option even with nuclear, though the cost is $4.60/gallon. I would think that since an industrial process doesn't require a baseload (assuming the manpower required for actual operation of the oil from CO₂ and water plant is low, I would guess that production could be halted whenever the sun isn't sufficient for high-temperature solar thermal collectors like linear Fresnel reflectors; it's not like electricity where lack of a baseload means no use of lights, TV, computers, dishwashers, electric stoves, ovens, refrigerators, air conditioning, washing machines, dryers, toasters, etc. whenever the sun isn't out or the wind isn't blowing), solar and wind would be especially suited for this process (especially if the carbon dioxide can be stored effectively or, better yet, is coming from a coal power plant)
3. Liquid coal and shale oil are, when ignoring their sky-high environmental costs, likely economical these days, but that requires moving backwards on the environment, and we're screwed aside from energy if we don't move forward on slowing global warming.

So the government (whether federal, state, county, municipal, and it goes without saying school board) cannot actually lower gas prices.

But can government do anything to lower our fuel bills?

The St. Petersburg Times asked people who theoretically know something about the issue from all ideologies and areas:

Italicized and parentheses are my pre-article reading thoughts

Glenn Robertson, budget director for both Republican Governor Bob Martinez and moderate to liberal Democratic Governor Bob Graham (So he's probably got some elements of sanity to him, at least):

Donna Arduin, budget director for Republican Governors Jeb Bush and Arnold Schwarzenegger; also president of Arduin, Laffer & Moore Econometrics (Yes, that Laffer is Arthur Laffer, the guy who pushed the idea that there is a single local maximum in a graph plotting tax rates with tax revenue [clearly it will be 0 at a 0% tax rate, and low (not zero, but quite low) at 100%, but his idiot idea inspired Reaganomics and today is probably costing America as much as $100 billion each year of extra interest on the national debt), not to mention the trillions of dollars of debt. As such, she's almost certainly an idiot)

Democratic Chief Financial Officer Alex Sink (One hope's she'd be good)

Sean M. Snaith, director of the Institute for Economic Competitiveness in the College of Business Administration at the University of Central Florida (business school types are all over the map; who knows?)

Dominic M. Calabro, president and chief executive officer of Florida TaxWatch (TaxWatch? He's almost certainly as much of an idiot as Donna Arduin, possibly more so, as she at least might possibly [though I doubt it] learned something from being a budget director)

Raymond Arsenault, the John Hope Franklin Professor of History at the University of South Florida, St. Petersburg (Likely has some idea of what's been tried [and failed or succeeded] in the past, but that may or may not be useful to apply to today; history professors tend to be liberal, but can range across the board ideologically)

Mike Jackson, chairman and chief executive officer of AutoNation, America's largest auto retailer (Let me guess; it doesn't involve doing anything that would reduce the number of single occupancy vehicles on the road [and therefore probably doesn't involve doing anything unless he claims drilling is going to happen soon])

Susan Story, chairwoman of the Florida Chamber of Commerce and president and chief executive officer of Gulf Power (Chambers of Commerce are often surprisingly good on public transportation, at least in theory; but damn they hate regulation; Gulf Power is a subsidiary of Southern Company, which skews more heavily both coal and nuclear than U.S. power as a whole; expect emphasis on that

Mark Wilson, president and chief executive officer of the Florida Chamber of Commerce (Same as with Susan Story, surprisingly decent on transit, but hate regulation)

After reading

Obviously, there were the ideological themes, at least on the right:

• the 2 Chamber of Commerce types, Tax Watch guy, and Laffer woman predictably pushed "tax & spending cuts are our Savior, because the government doing nothing about energy has worked out so well so far"

Anyway, there were a bunch of common themes:


No We Can't (pessimistic but probably sadly realistic as well): Everyone but the Chamber o Commerce; AutoNation CEO Mike Jackson "there is no quick fix." Same by the history professor, and to a lesser extent by the others. I forgot that Chambers of Commerce are the anti-Chicken Littles; Story and Wilson both say, in essence "We're in a 'transition' period, but the outlook is great!"

Public Transit-Pushed by everyone except TaxWatchman, no-solution Autonation CEO man, and Laffer lady.

Carpooling-Most, even the TaxWatchman.

The bipartisan budget director had the most ideas, most of which sound good,

• City and county governments could provide an accessible and user-friendly "Jump in the Pool!" Web site to help people carpool. The site could connect people who live and/or work in similar areas of town. The site could suggest a reasonable amount that each passenger pays to offset the driver's gas bills and inconvenience, and is less than the passengers would pay if they drove their own car.

• A government-sponsored "Save Me Some Money" Web site (message board) could allow citizens to contribute and access ideas that can help cut costs or save money in many different areas (e.g. food costs, energy usage, home maintenance, and car maintenance and operation).

• A government "Help-A-Neighbor-In-Need" Web site could be established where people needing help can request it from others in the community.

• Local governments could sponsor "Community Gardens" in various areas of cities and counties where especially lower-income families could access fresh vegetables that may be getting sacrificed to pay for gas and other higher-cost necessities.

• Local governments could more actively promote visiting homes in their area to evaluate energy-saving possibilities and maybe offer assistance to lower-income families if energy use and expense can be cut.

• In a special session, the Legislature could authorize grants to local governments to do any or all of these things from nonrecurring funds.

• State and local governments could actively introduce many different initiatives to save gas and energy as a model to citizens. Show some political leadership.

I don't know how much they would do, but they sound decent and are among the most that could be done, probably.

Some are stupid:

• All the "cut taxes/end regulation" proposals


• Toll holiday, proposed by Alex Sink and Sean Snaith; tolls help push people to public transit and are crucial to fund transit projects and keep roads from falling apart

However, both Democratic official Alex Sink and far-right crazy Laffer woman Donna Arduin agree on one thing-a gas tax holiday is extremely stupid.

Arduin:

Do Not:
Legislate temporary gas tax cuts, or any similar gimmick. Gas tax cuts would subsidize the oil industry and not help bring about any of the needed "substitution effects" that high gas prices cause, like buying more fuel-efficient vehicles and using mass transit more.

(so even she realize that mass transit use is a good thing)

Sink:

Don't try reducing gasoline taxes. "Every time that's been tried, the gas companies just take it for themselves. That leaves us without the revenue we need for our infrastructure. So some people are losing their jobs."

I guess only a solution-lacking pandering crazy old man would propose such a thing.

Encouraging Independent Numbers on Gas Tax

CBS/NY Times has done a poll regarding the Clinton/McCain insane gas tax "holiday" proposal.

The results are highly encouraging.

First of all, 49% say the holiday is a bad idea, while 45% say it is a good idea.

Those who say it's a good idea include 58% of Republicans polled and 47% of Democrats polled, but only 32% of independents polled.

Brilliant Flyer On the Gas Tax

Links the Minnesota bridge disaster with the gas tax holiday proposed by Clinton and McCain.

Which, of course, is the case. Our infrastructure has been chronically underfunded due to low gas taxes. As a result, our rail & other mass transit infrastructure is limited/non-existent, and our bridges aren't safe enough.

Of course, Pawlenty's push for the Twins stadium instead of bridges hurt as well.

Props to Eric Brandt for making it.

Shame on You, Senator Menendez

It's just been reported that Senator Bob Menendez will be co-sponsoring Hillary Clinton's gas tax "holiday," and I confirmed it when I called his office to express outrage.

This is an insane proposal, period. But it's even more insane for a New Jersey Senator to propose.

As I noted earlier, the proposal won't do anything to reduce gas prices, but it will reduce money available for transportation spending, and that mass transit expansion (of infrastructure and use) and increased carpooling, as well as better density, rail electrification and increased use of those electrified rails for long-distance freight transport; less outsourcing of goods-production or use of old-technology wind-powered ships for transport might help as well.

We can buy some time by using the Los Alamos process (although nuclear isn't renewable either; however, it's planetary poisoning is at least concentrated to a relatively small area in the no-accident scenario)

We could use the lens-based solar concentration for it, I suppose, since the fuel production wouldn't have to be happening all the time.

At any rate, New Jersey is by far the best-situated state (statewide) for mass transit at the present time, despite lacking a single major metropolitan core of its own (granted, Newark and the urban core that is Hudson County both have light rail).

* 11 commuter lines from New York (North Jersey Coast Line, NorthEast Corridor, Gladstone Branch, Pascack Valley Line, Bergen Line, Main Line, Montclair-Boontown Line, Morristown Line, Raritan Valley Line) from NJ Transit (with transfers at the Frank R. Lautenberg Station in Secaucus and at the Newark Rail Station), as well as the 2 PATH train lines from New York to Jersey City&Newark.
* 4 commuter lines from Philadelphia (Atlantic City Line via NJ Transit, line to Trenton and West Trenton/Ewing via SEPTA, and the PATCO line), with the River Line from Trenton to Camden acting as an extension and as its own line to either one.
* 2 light rail lines in Hudson County
* 2 light rail lines in Newark
* A few hundred bus lines

Unsurprisingly, New Jerseyans are the second most likely after New Yorkers (26.1% of New York state residents take public transit to work, but only 6.4% of those not in New York City) to take public transit to work.

In 2006, 10.3% of New Jersey residents commuted via public transit, and that number has likely increased and will likely continue to increase.

Moreover, transit funding is about the only area in which New Jersey residents make out decently in terms of federal funding.

The right-wing but state-neutral (i.e. it doesn't favor any particular state so it's numbers should be good for this comparison) Tax Foundation numbers have New Jersey ranking 50th in 17 of the 25 years from 1981-2005 in spending received per tax dollar paid (we were in the mid-30's in spending received per capita, 2-4 in taxes paid) and got above 49th (to 48th) just once in those years.

But we were #4 in transit funds received per capita [which, again, makes sense].

Now, I understand why Hillary, despite representing New York, doesn't care.

Of the states left in the primary, only Oregon (4%) [and Puerto Rico(3.7%) had over 1% of people commuting via public transit in 2006 (although North Carolina's new light rail in Charlotte may have increased it's numbers, and they need more for capital expansions to increase them further), so while it's still bad for them, it's less bad (or seems that way); granted, Republican Senator John Thune of South Dakota (0.4% take public transit to work) has stated his opposition to the holiday.

But Menendez? It's just crazy.



Give him a call to express your own outrage:

317 Senate Hart Office Building
Washington, D.C. 20510
202.224.4744
202.228.2197 fax

One Gateway Center,
Suite 1100
Newark, New Jersey 07102
973.645.3030
973.645.0502 fax

208 White Horse Pike, Suite 18
Barrington, New Jersey 08007
856.757.5353
856.546.1526 fax

The Insanity of the Gas Tax "Holiday"

That's the only word to describe the Clinton-McCain proposal to "temporarily" suspend the gas tax.

First of all, it's almost guaranteed to do absolutely nothing to lower gas prices

Cuts in gas taxes would not lower gas prices because the supply of gasoline is close to fixed -- the oil industry is already operating its refineries at near maximum capacity (or so they claim). As we teach our econ students, if the supply is fixed, then the price is determined on the demand side. This means that, if the industry produces about 400 million gallons of gas per day, the price will continually adjust to the point where all consumers put together purchase about 400 million gallons of gas per day. Therefore, if the gas tax is reduced or eliminated, as McCain has proposed, the price consumers pay will stay the same, but more money will go to the oil industry.

And even if that wasn't true, and it would save people $30 a year, the rationales Senator Clinton and Senator McCain are using for this proposal are still insane.

Campaigning in Cleveland, Mr. McCain suggested that low-income families were hit hardest by the cost of fuel because they typically drove longer distances to work in older-model automobiles.

“Why not give them a little break?” he said. “Instead, with all due respect to those who travel around in chauffeured limousines, you’d think that we are destroying the economy of America.” Mr. McCain acknowledged that the proposed gas-tax holiday did not take on bigger problems.

Of course, the poor in Cleveland tend to use the Greater Cleveland Regional Transit Authority to get around.

The heavy rail and light rail uses no foreign oil at all, as it's electric (it's likely powered by a coal-fired power plant, which has it's own problems but at least we're a net exporter of that particular resource)

The bus uses foreign oil, but significantly less per passenger mile than an automobile.

The sane goal is to get more people to ride mass transit, so that the federal government doesn't have to subsidize operational expenses like it did in Cleveland as of 2006 (while all transit systems have to be subsidized because you want public transit to be available at all times, not just peak times, and you want to keep it affordable even for the very poor, Cleveland's transit system is underutilized, and so fares only cover 18% of operating expenses [most of operating expenses are salaries, wages and benefits, fuel-related costs are a pretty small percentage]; in Chicago, fares cover 43% of operating expenses) and can instead spend more on subsidizing capital expenses (keeping the system safe and expanding it and other systems).

By the way, the funds for subsidizing mass transit?

They come from that gas tax McCain and Clinton want to repeal.

Federal purse strings. Part of the squeeze stems from the failure of federal funding to keep pace with the relative explosion in the number of transit systems under construction. Even as more cities build or expand their systems and ridership hits a 50-year high, the amount of federal funding has remained constant. And now, the federal transportation trust fund, paid for largely through an 18.4-cent-per-gallon gas tax, is scheduled to run out of money next year. The federal fund will have a $3 billion surplus this year, which will become a $3.9 billion deficit by 2009. When Congress proposed raising the gas tax to close the expected gap, the White House called for cuts in spending. The tax has not been raised since 1993.

The Congressional proposal for raising the gas tax was not a bunch of "crazy far-left Democrats," by the way.

This was a bi-partisan commission's recommendation

And that commission was not "bipartisan" in the sense of having Democrats, Joe Lieberman [who's decent on transit issues] and Bernie Sanders.

It included:

1. Bush Transportation Secretary Mary Peters (Republican)
2. Jim Doyle's Secretary of Transportation and former Teamster Frank Frank Busalacchi (Democrat)
3. Bush appointee and former RNC Deputy Chairwoman Maria Cino (Republican)
4. Rick Geddes, Hoover Institution Fellow (Republican)
5. Steve Heminger, Pelosi choice for commission (Democrat)
6. Frank McArdle, Hillary Clinton choice (Democrat)
7. Steve Odland, Office Depot CEO & business mogul (Republican)
8. Patrick Quinn, Bill Frist choice (Republican)
9. Matthew K. Rose, Railroad Baron (Republican)
10. Jack Schenendorf, Bush transition team member (Republican)
11. Tom Skancke, chosen by Harry Reid (Democrat [kind of])
12. The very far-right Paul Weyrich, co-founder of the Heritage Foundation (Republican)

So that's 8 Republicans and 4 Democrats.

“I’m a conservative Republican,” said Weyrich, a panel member. “The orthodoxy in the conservative movement is don’t raise any tax. But in this particular instance, I don’t see any alternative.”

Granted, Paul Weyrich is actually pretty good on transportation issues (plus he already said he wouldn't vote for McCain vs. Hillary, although he may have changed his mind, especially after this, his pet issue).

And there are other right-leaning pressure groups opposed to this, including the National Association of Manufacturers (probably) and construction companies (definitely).

And there is bipartisan opposition to such a holiday, even in rural states (John Thune and Tom Harkin and both said to oppose it in the NYTimes article).

At any rate, it is utterly insane.