"First, research shows that waiving the gas tax would generate major profits for oil companies rather than significantly lowering prices for consumers," they wrote. "Second, it would encourage people to keep buying costly imported oil and do nothing to encourage conservation. Third, a tax holiday would provide very little relief to families feeling squeezed." [Jonathan Weisman, "Economists Release Letter Opposing Clinton Gas Tax Plan," The Trail, 2008.05.05].
Obama has the good sense to recognize that wishes and dreams don't beat basic economics. And don't forget: cutting the gas tax means cutting road funding, which one commentator suggests means cutting jobs for road-construction workers. Tell me again: who's fighting for the working class?
I don't drive so this issue has no impact on my life, but I wonder how many of those 230 economists are going to miss a mortgage payment this month because of the cost of gasoline. Probably not too many of them.
ReplyDeleteRight. And how many Americans would be able to save enough from a gas tax holiday to cover a mortgage payment? A Madison-Sioux Falls commuter who puts 600 miles a week on a 20-mpg car would save (18 cents * 30 gallons * 4.5 weeks) $24.30 a month. If that's the make-or-break point on your mortgage, you need more than a gas tax holiday.
ReplyDeleteBut the economists aren't saying that $24.30 is peanuts because they are snooty rich elitists. They're saying that $24.30 a month won't materialize because (a) the oil companies won't pass on the savings and (b) there won't be any savings, as the tax cut triggers more demand and drives up prices. We don't get to shoot the messengers (or ignore them, or dismiss them as elitists) on this one.
So I don't think the gas tax holiday is a good idea. And I'm glad to see Obama is sticking to his guns on this one. But he needs to change the subject and take control of what the media and this election is about. This gas tax is hurting him. Politics is a game in many ways, and as much as I hate to say it, I don't want Obama to lose because he lost the politics game.
ReplyDeleteI really don't give a rip about the Gas tax break but I would like to know why these 230 Economist didn't warn us about the mortgage debacle. I mean, if they are to be believed. 230 and not one of them told us? Was it a secret?
ReplyDeleteI have to agree with Obama on this one.
ReplyDeleteIf the oil companies were "made to pay the gas tax" this summer as Clinton proposes, they'd just pass it on to us anyhow.
If the tax were totally waived, as McCain suggests, it would do little for the consumer but would further worsen the national debt. It might also indirectly drive up prices later by accelerating the demand in the short term.
What's the matter, OldSarg? Trying to change the subject from the fact that Barack Obama is the smartest presidential candidate left standing?
ReplyDeleteI can't find the full list of the 230 backing that argument on the gas tax, but I can point you toward some economists who were warning us in 2005 that the housing market might be in trouble:
--Robert J. Shiller, Yale
--Gleb Nechayev, Torto Wheaton
--Susan M. Wachter, Wharton
--William Wheaton, MIT
Of course, that 2005 WashPost article includes a couple of economists saying there was nothing to worry about. "Any talk about the housing market crashing is ludicrous," said David Lereah, who was chief economist for (wait for it...) the National Association of Realtors.
You keep flinging your red herrings, OldSarg. I'll keep looking for that list of the 230 economists who signed that letter. If anyone has it, send it my way!
The idea of a rich, high-paid economist (as a general rule) is an amusing one.
ReplyDeleteIt ranks right up there with rich English professors and poets!
Just because somebody studies the ebb and flow of money does not mean they are blessed with a high tide themself.
And anyway. RAISE THE GAS TAX. It's our only hope.
People do need more than a gas tax holiday, Cory, and if you think that's all Hillary's offering, then you simply aren't paying attention. I'm not here to educate you.
ReplyDeleteSpeaking of mortgages and educating the voters, here's some helpful propaganda from the Obama campaign on what else Clinton is offering, and why it's wrong.
ReplyDelete