Wednesday, April 26, 2006

Flip Flop Flip Flop Whattya do when your numbers drop?

(Sung to the old Alka-Selzer plop plop fizz fizz tune)

Here's our steadfast great leader George W. Bush in 2000 when the Clinton-Gore administration released oil from the Strategic Petroleum Reserve:

George W. Bush, trying to slow Al Gore’s momentum and overcome discourag-ing polls, accused his rival on Saturday of engaging in “a disturbing pattern of embellishments and sudden reversals.

He then referred to the Strategic Petroleum Reserve:
"The strategic reserve should not be used as an attempt to drive down oil prices right before an election," Bush said. "It should not be used for short-term political gain at the cost of long-term national security. It was created for cases of war or a sudden disruption of America's energy supply," Bush said. "That's why it's called the Strategic Petroleum Reserve, not the Strategic Political Reserve."

Remember all the digs at Kerry about being a flip-flopper? Here's our Great Leader yesterday:
Tuesday, Bush, facing an outcry from his own party leaders, called high gas prices "a hidden tax on the working people" and said he would stop purchases and deposits to the reserve in order to increase supplies for consumer use. "By deferring deposits until the fall, we’ll leave a little more oil on the market," Bush said. "Every little bit helps."

What happened to that steadfast, clear-eyed leadership? Of course, it's not that we haven't had an energy plan:

"Laurence Lindsey – President Bush’s senior economic advisor at the time — argued in 2002 that the Iraq war would increase oil supplies and lower prices. From the Washington Times, 9/19/02:

As for the impact of a war with Iraq, “It depends how the war goes.” But he quickly adds that that “Under every plausible scenario, the negative effect will be quite small relative to the economic benefits that would come from a successful prosecution of the war.”

“The key issue is oil, and a regime change in Iraq would facilitate an increase in world oil,” which would drive down oil prices, giving the U.S. economy an added boost.

Yeah, that worked well.

The New Republic has an article by John Judis just out today that finally notices. The article starts off:
It's not fashionable to say this, but the Iraq war was about oil. Not entirely, but certainly more than it was about weapons of mass destruction or a link to Al Qaeda. The 1991 war with Iraq was also about oil, and if the United States goes to war in the future with Iran or with China, it will likely be about oil.

Not fashionable to say it? Jesus. Isn't it, wasn't it, blindingly obvious? Good to know our intellectual elite are catching on! Speaking of finally catching on, the article has some interesting quotes from Condaleeza Rice, who has just popped into Baghdad for a surprise visit.

Secretary of State Condoleezza Rice summed up the challenge from China, Iran, and Venezuela in testimony in April before the Senate Foreign Relations Committee. "We do have to do something about the energy problem," she said. "I can tell you that nothing has really taken me aback more, as secretary of state, than the way that the politics of energy is--I will use the word 'warping'--diplomacy around the world. It has given extraordinary power to some states that are using that power in not very good ways for the international system, states that would otherwise have very little power. It is sending some states that are growing very rapidly in an all-out search for energy states like China, states like India that is really sending them into parts of the world where they've not been seen before, and challenging, I think, for our diplomacy."

What to do? The Democrats seem to be using this opportunity to bash Bush, which is all good fun and richly deserved, too, but in reality Bush can't do much about this and neither can they. The sooner that we all grasp this, the better, because until it becomes clear to everyone that one day we will long for the day when gas was just $3.00 a gallon we are likely to think of this as just one more temporary price hiccup, to be endured for a short time until gas prices return to "normal". It may be that demand for gasoline is mostly inelastic at $2 and $3 a gallon, but at some point, that elasticity starts to give and at $4 or $5 or $6 people start changing their behavior in more ways that just driving away from gas stations without paying more often. I've paid $6 a gallon before (in the UK, not the US) and it blows. It'd sure have me thinking hard about what I drove, when, where and how often.

Whatever pain folks are enduring at the pumps, it could be worse. Midas, the muffler and brake people, ran a contest to find the longest commute. The North Country Times has an article about Dave Givens, who drives 186 miles each way to his engineering job at Cisco Systems in San Jose. He does it in a 2005 Honda Accord he bought new in June and which now has 74,500 miles on it. It takes him about 12 gallons of gasoline a day to make this round-trip. I guess he's not a candidate for bike commuting!

Er, I'm getting ready to publish and Slate comes out with an article entitled I Smell Gas: A subject that makes Congressmen stupid that makes many of the same points and even uses some of the same quotes. It's really good, it explores more of the political dimension of this, how free-market Republicans suddenly want to investigate price-gouging and how environmentalist Democrats suddenly decry the high price of gas. If you're a Democrat, high gas prices are good, they'll cut consumption and therefore pollution and they'll send the price signals that finally institute some change; if you're Republican, they are good too, a part of the workings of a free market where prices work towards the supply and demand balances. Nobody dares speak the hideous truth, though, posturing and maintaining access to power and its privileges is a higher priority than levelling with us. They think we can't handle the truth.

We deserve better.

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