By on August 17, 2011

Who’s ready for some politics? With the presidential election still over 14 months away, recent Iowa straw poll winner Michelle Bachmann is upping the campaign promise ante by telling a Greenville, SC crowd

The day that the president became president gasoline was $1.79 a gallon. Look at what it is today. Under President Bachmann, you will see gasoline come down below $2 a gallon again. That will happen.

Without even taking a side in the muck of presidential politics, it’s plain to see how ridiculous this statement is. As Politico helpfully notes:

Bachmann didn’t detail how she would cut the price of gasoline, which is tied to the global price of oil. [Emphasis added]

Personally, I think gas should probably be taxed to a point where Americans pay about what the rest of the world does, in order to pay for the externalities of oil consumption. Most auto execs agree, arguing that America’s artificially low gas prices play hell with product planning. But even (or is that especially) if you’re a hard-core anti-tax free-market fundamentalist, Bachmann’s statement should be treated with scorn. After all, markets, not presidents, should be setting oil prices. But what’s principle (or even good practice) when compared to the need for political pandering?

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210 Comments on “Quote Of The Day: Who Wants To See Gas Under $2 Per Gallon? Edition...”


  • avatar
    Verbal

    Bachmann is an idiot. As poorly as the Obama presidency has gone, the Republicans are really going to need to step up their game if they want to defeat him. And the Bachmann/Gingrich/Palin/etc. pack of froot loops aren’t the ones who will do it.

    • 0 avatar
      Pistolero

      “Personally, I think gas should probably be taxed to a point where Americans pay about what the rest of the world does…”

      Then: “After all, markets, not presidents, should be setting oil prices.”

      You are an enigma, wrapped in a riddle…

      The externalities of oil consumption…like moving capital and labor for economic benefit? Like you know, allowing civilization to exist?

      • 0 avatar

        Good thing I’m not running for President!

        Seriously though, without getting to far into my own beliefs, I think taxes can help markets function better than they might otherwise. What’s important is that government focus on improving market function rather than trying to generate specific outcomes. Click the “gas should probably be taxed” link in the OP for more of my thoughts, as well as a spirited debate on the topic.

      • 0 avatar
        Luke42

        First, he explained why *he* thinks Bachmann is wrong.

        Then he explains why people who likely disagree with him would ALSO think Bachmann is wrong, even though they have a different world view.

        Where’s the riddle?

        (I give the author credit for being able to acknowledge and/or understand that he doesn’t necessarily agree with. As someone who was a conservative in my younger years and who is now an Obama Liberal, I respect the author’s ability to see the whole picture.)

      • 0 avatar
        jaje

        Taxes do make sense when applied with reason and logic – unfortunately our elected officials hardly ever do so. A gas tax to keep gas prices high creates demand for small fuel efficient vehicles – and by doing so we can throw out an even more poorly written and useless law called CAFE (supply side measure that does little to change demand).

      • 0 avatar
        VanillaDude

        This is a car blog.
        You guys WANT to pay more?
        Why?

        The idea that we will get a better driving experience if we give the Federal government more money is completely ridiculous. Currently, the Federal government is virtually burning trillions of our earned dollars. You think we need to give it more? Why?

        Over the past generation, one of the undisputable facts of American life has been the collapse of any Federal government credibility. Dams are collapsing, bridges are falling, nothing is getting built anymore, the Federal government can’t give us a better driving experience.

        The Federal government is corrupted beyond reform. The politics is corrupted. Yet, you actually believe if we give them even more money, somehow life will be better? Talk about your faith-based beliefs.

        Maybe you remember when the government actually produced something under budget and met expectations, but as long as I have lived – it has failed on a daily basis.

        You want to believe in Big Government, go ahead. Just stop the name calling of everyone else who sees the writing on the wall, and no longer believes as you do.

    • 0 avatar
      DenverMike

      Yes let’s further accelerate the cratering of the economy and drive around dirty, gross little 2 liters like the rest of the world. That’ll show em!

      • 0 avatar

        Yeah Id happily PAY MORE FUEL TAXES 25/50c/gal IF it repaired and built roads and rails and eliminated TOLL ROADS once and for all. And two liters didnt “crater” any economy…too many V8s and oil price reality DID!

        If anybody could drive the planet back into worldwide recession and get fuel back below $2, Michelle B sure could.

      • 0 avatar
        JJ

        @fred diesel

        Good point…I was wondering despite the rediculousness of this idea what it would take to actually make it happen.

        I came up with literally invading an oil rich country and make them ship oil to the US for free/cheap…But of course Michelle could also just execute some of her other plans, completely wreck the US economy and therefore severely wounding the rest of the world’s economies…Demand for oil would drop through the floor and there you have it; cheap gas at the pumps.

        It’s a brilliant plan.

      • 0 avatar
        RangerM

        Let’s get the “free market” to function better by destroying or at least signficantly distorting it.

        I guess that makes sense to some, but I’m not one of them.

  • avatar
    carguy

    That is a surprise. Populist promises of price controls on common items are usually associated with left leaning regimes like Hugo Chavez not free market conservatives. Unless, of course, she thinks that if we ramp up the 2% of the oil world supply that is US domestic that this will have any effect whatsoever on the world price of crude. Either way – next candidate please.

  • avatar
    acuraandy

    The WORLD oil price would drop if we simply were allowed to explore for our own resources. I don’t care what some dick CEO says, lower oil prices would be an economic boom, especially in the US, as oil/gasoline prices are more often than not joined at the hip with economic expansion. That is a fact.

    With that said, you are correct, Presidents should not set oil prices, the market should. It is the POLICIES that come out of political bickering that interfere with said prices.

    • 0 avatar
      aristurtle

      “All the easy oil and gas in the world has pretty much been found.” – William J. Cummings, Exxon-Mobil company spokesman

      It’s not super-bad, the price will hit some speedbumps as it rises. There’s a process to synthesize gasoline from coal, for example: it’s not cost-effective when the pre-tax cost of gas is $3.50ish, but at $6 it might be. We’re never going back below $2 unless we start subsidizing gas or something stupid like that.

      • 0 avatar
        tekdemon

        It’s actually cost effective even if gas were only $2 a gallon. I believe the break-even on CTG was only something like $40 a barrel and I know because I used to invest heavily in CTG corporations like Sasol. The only reason it’s not more popular probably is because the big players like Sasol got threatened with a windfall tax when their governments realized just how much money they were making synthesizing gas for $40 a barrel and flipping it for $100+. Even with higher coal prices now it’s still easily profitable given the huge jump in gas prices.

        The real problem with things like coal liquefaction is mostly that’s it’s about as un-environmentally friendly as anything can be, not only do you have to mine coal cheaply, the actual liquefaction process uses quite a bit of energy and kicks off some pollution, but the gasoline you get produces a fair bit more pollution when you burn it when compared to regular gasoline.

    • 0 avatar
      Pch101

      The WORLD oil price would drop if we simply were allowed to explore for our own resources.

      This is the sort of mindset that explains why Bachmann et. al. make the comments that they do.

      There are right wing voters who actually reside in this Fantasyland in which there is plenty of oil and all of this other nonsense. These sorts of memes are impervious to little trivialities such as, oh, facts — people believe what they want to believe, even if what they believe is complete BS.

      I don’t know whether Bachmann means, but she knows what her audience wants to hear. She wants to get elected, so it really makes no difference whether or not it’s true. And of course, it isn’t.

  • avatar
    Bryce

    That woman is deranged Gas prices went up thanks to greed on Wall street. The Banksters as usual bled the world white if you want to fix things stamp these predatory assholes out.

    • 0 avatar
      Luke42

      While there does seem to be something to the speculation argument, there’s far more going on than that.

      For instance, there is only so much oil in the world. When you use it, you burn it, so there’s less oil in the world. So, in the long run, oil prices should be rising.

      When you delve in to the details, it gets quite complicated, though, and there’s a lot of debate as to how close to the half-full mark we are on the world’s oil supply, and drilling technologies, exploration, politics, and our guesses about how much oil (and natural gas) is still undiscovered are all variables that we can’t quite predict.

  • avatar
    golden2husky

    These stories on TTAC link to “Whiskey Tango Foxtrot”…what does that mean?

  • avatar
    PintoFan

    If I had a quarter for every time I heard somebody tell me what the price of gas “should be,” I wouldn’t be able to afford the upkeep costs on a 4-year-old Volkswagen, but I’d still be pretty rich. It will be what it will; if anything defines the predictions of armchair economists it’s the price of oil. That said, I do agree with Ed’s position that a modest increase in the gas tax is both desirable and inevitable, regardless of the objections of dirt-road medievalists- err, I mean libertarians.

  • avatar
    twotone

    Gas is too cheap in the US. I paid $6/gallon when I lived in Amsterdam — 13 years ago.

    I’d gladly pay $5.00/gallon today if it got rid of 30% of the drivers.

    • 0 avatar
      friedclams

      It’s pretty close to $5 now (well, just shy of $4 in metro Boston).

      I would wholeheartedly agree with you if $5/gallon gas got rid of the *right* 30% of drivers!

    • 0 avatar
      Scott.A

      I’d gladly pay $5.00/gallon today if it got rid of 30% of the drivers.

      Easily the most persuasive argument I’ve heard. now if we could just get the 30% who are idiots. Unfortunately rich and poor people alike are horrible drivers so I don’t think the left lane campers will let me pass no matter how pricey gas gets.

    • 0 avatar
      eldard

      I’d gladly pay $5.00/gallon today if it got rid of 30% of the drivers.

      In my 3rd world country, people whom before China would never have been able to afford motorcycles can do so now. As a result, there are now more accidents as undisciplined people suddenly become empowered. They like to just cut in disregarding even their own children’s safety who ride with them and are without helmets.

      I have long ago stopped believing in equality. I do not advocate it.

  • avatar
    carve

    What an idiot. About the only way we’ll see that price near-term is global economic collapse, which is what we had when BHO took over. Is that what she’s promising?

    Of course, she probably think drilling will be the solution. We already drill like crazy. We have >5% of the world reserves, yet are still the #3 producer. Lets save at least a TEENY bit for when oil gets REALLY expensive. We’ll burn everyone elses oil first.

    What’s even dumber is how specific the promise is. I wonder if her team is already busy thinking up excuses.

  • avatar
    OldandSlow

    Yesterday, she thought it was Elvis Presley’s birthday. Today she promises $2.00 a gallon gasoline, if she’s elected. The voters will decide whether or not she is ready to lead the US.

    By the way, I miss $2.00 a gallon gas, but I’m not holding my breath thinking those days may return.

  • avatar
    Jesse

    Umm..

    http://money.cnn.com/2008/06/08/news/economy/gas_prices/

    Gas reaches new record of $4 in the summer of ’08!

    Now why can’t Bachmann spend 2 minutes google-searchin’ like I did?

    EDIT: I guess gas was on average under $2 in Jan 2009. Man I do NOT remember that.

    • 0 avatar
      aristurtle

      Oil prices crashed when the rest of the economy did.

    • 0 avatar
      carlisimo

      Maybe if we had defaulted we would’ve returned to that situation, and Bachmann could legitimately take the credit!

    • 0 avatar

      And therein lies the problem with Rep. Bachmann’s statement. The previous summer, gasoline was $4.50/gallon or higher in many parts of the nation.

      Where her statements have validity, however, can be shown by what happen after the moratorium on US offshore drilling expired in 2008: the price of a gallon of gas dropped by 60 cents a gallon within a couple weeks.

      The economic collapse came along within weeks and sent the prices crashing to earth. In my area it actually hit $1.59/gallon for regular.

      It’s all about faith. Faith or the lack thereof in future demand and/or supply. Bachmann would pursue policies that would signal to the markets that supply will increase in the future, thereby (hopefully) lowering prices. Not sure I’d want to guarantee $2.00/gallon but lower energy prices would greatly benefit the American economy.

      All that said, Republicans would do well to remember that the price of oil could have been much lower under President Bush. It would have helped had that administration taken a more aggressive stand on developing our domestic resources.

  • avatar
    Dr. Kenneth Noisewater

    I say levy a tax on gas that covers 33% of the Defense budget, because that’s how much it’s costing us to maintain and defend access to despotic oil powers, between CENTCOM with multiple carrier groups just for a presence in the Persian Gulf, the assorted wars, etc. Either tax gas at the pump or slap a nice “security fee” tariff on imported oil and gasoline.

    Use _THAT_ money to pay for ending the payroll tax permanently, along with removing tax loopholes that reward offshoring/outsourcing abroad.

    Or, perhaps cutting back on the defense of global oil hellholes and letting the Europeans/Chinese/Russians/etc take up the slack? I’m holding my breath.

    • 0 avatar
      dimitris

      Ding ding ding!

      Moreover, in light of our infrastructure’s built-in (for the foreseeable future) dependence on cheap-ish oil, here are two of my favorite pieces from noted pinko hippie George Friedman of Stratfor:

      What Happened to the American Declaration of War?
      As our international power and interests surge, it would seem reasonable that our commitment to republican principles would surge. These commitments appear inconvenient. They are meant to be. War is a serious matter, and presidents and particularly Congresses should be inconvenienced on the road to war.

      To which I add, so should the people. Instead of, you know, being told to “go shopping”. Oh and this includes those who benefit most from the economic fruits of cheap-ish oil. George Friedman again:

      A Fresh Look at the Draft
      If you can play tennis as well as you claim to for as long as you say, you can patrol a village in the Sunni Triangle.

      We do not expect to be taken seriously on this proposal, but we will make it anyway: There is no inherent reason why enlistment — or conscription — should be targeted toward those in late adolescence. And there is no reason why the rich themselves, rather than the children of the rich, should not go to war. Or, for that matter, why older people with established skills should not be drawn into the military.

      Now that’s more like the appropriate “pricing signals”.

    • 0 avatar
      Christian

      I do not know if you are a doctor and/or a gun owner and/or brian fantana’s right testicle, but I would like to subscribe to your newsletter.

    • 0 avatar
      threeer

      Not saying we shouldn’t (and have the ability to do so) reduce the immense waste within the DoD…but do you really want a world where the Chinese or Russians take the lead militarily? Sorry…as bad as things are here in America right now, I’ll take our fundamentals and stewardship over China or Russia any day of the week.

      That being said, if politicians were more concerned with the state of the Nation versus their own party (or their own relection), then an added fuel tax would make sense in order to help pay for any number of things…infrastructure, defense…whatever. Then again, so would a massive rewrite of the current tax code. But like you, I’m not holding my breath on that one. Ultimately, the power to change this rests with the voting population of this country…we have automatic term limits (called elections), but while individuals might be smart, collectively sometimes we miss the boat.

      As for the President being able to provide $2/gallon gas, Bachmann is laughable in her knowledge of Presidential power, but keen on saying what she thinks her supporters want to hear. Kind of like the kid in school winning the class president’s election by promising Coca-Cola in every water fountain. Makes for good copy, but impossible to actually put into action. We’re making progress of fuel efficiency and usage, I can’t imagine what actually having $2/gallon would do to the automotive landscape here…

      • 0 avatar
        Scott.A

        http://scottthong.wordpress.com/2008/05/29/46-lies-of-barack-obama/

        The point of this isn’t to pick on obama (I hate all politicians) but it’s a lie. She’s not stupid and she most certainly knows it’s a lie but that’s not the point of it. The point is the reaction it draws. Obama said he’d close Gitmo in a year and the liberals went nuts with “Look, we’re already changing!” There’s stupid people on both sides.

  • avatar
    NormSV650

    Everybody picks on the girl!

    Wait until the effects of the teaparty kick in since the start in 2010 elections. Via the voting public we will be an economic power again, not government who has less cash than Apple Co like earlier in the month. :)

    • 0 avatar
      SCR

      No, everyone is picking on the village idiot pretending to play politician. I don’t want to start a PoFlaWa so I won’t go much further, but the Tea Party is an inept organization that plays off people’s impulsiveness and and ignorance, by being themselves impulsive and ignorant.

    • 0 avatar
      Byron Hurd

      A government with lots of cash is a government that taxes too much. Government should be revenue-neutral, after all. They’re not supposed to be in the business of making money.

      Wasn’t that a staple of Reaganomics?

  • avatar
    Advo

    The U.S. has got to reduce its current account deficit – what the U.S. owes to foreigners each year – from its whopping 8.3% of GDP it is now (I was stunned by the figures). Every bit helps, and as energy takes up 22% of imports, keeping gas prices high is going to help keep down imports even as the economy recovers.

    Oil and gas prices aren’t likely to come down in the short term to boost the economy anyways, as Saudi Arabia needs the money and likely will reduce production rather than risk having the oil price fall.

    The lack of savings for many years now was always unsustainable (zero savings rate? – come on), so we have a economy that isn’t growing due to deleveraging – debt reduction – and increased savings, and things are going to take a while to adjust to that. Whether that time can be shortened and growth spurred, or prevented from dropping much, in the short-term is debatable. Bill Gross, the founder of the biggest bond fund in the U.S. argues that it can: and he’s no socialist idealogue.

    http://www.morganstanley.com/views/gef/archive/2011/20110615-Wed.html#anchorf8deccc6-9730-11e0-ae4d-1f795003957f

    Bill Gross guest article:

    http://www.washingtonpost.com/opinions/americas-debt-is-not-its-biggest-problem/2011/08/10/gIQAgYvE7I_story.html

  • avatar
    CriticalMass

    A gallon of what? The focus on gasoline as we know it may be a problem. $2 per gallon may be possible in a large scale changeover to natural gas of which we are adding to domestic proven reserves at a furious rate (doubled in the past year) thanks to fracking shale gas. And NG has 30-50% lower emissions (pick your source) which is one sweet bonus. Biomass will provide a further marginal improvement that has not been fully accounted for yet. Even without any further regulatory changes CO2 output has been declining and won’t again even reach 2005 levels until 2027 after 22 years of population and economic activity growth. The picture is a lot better that we sometimes fear and notice that I have included no discussion of increased production from tar or oil sands at all.
    http://www.eia.gov/forecasts/aeo/chapter_executive_summary.cfm

    • 0 avatar
      aristurtle

      Tar and oil sands (and oil shale, which I’m sure is going to come up somewhere here) come perilously close to the point where you use more energy getting the oil out of the ground than you get back from the oil, at which point you start asking yourself why you’re bothering.

      • 0 avatar
        ihatetrees

        @aristurtle

        … you use more energy getting the oil out of the ground than you get back from the oil, at which point you start asking yourself why you’re bothering.

        Your statement, even if true, is irrelevant if tar and oil sands are profitable. Money Invested < Money Earned – that's what matters.

        Unless, of course, the booming Province of Alberta is one big Enron-like ponzi scheme?

      • 0 avatar
        CriticalMass

        The key to all such recovered oil is the world price of oil. If prices stay high enough then it becomes economical. It should probably be viewed as an insurance policy against runaway world oil prices. To change back to NG for a moment, one of the questions in my mind about natural gas is how much of it should we export (or be forced to export under WTO). One of the really nice benefits of NG is going to be the generation of electricity with that instead of the (not all of them by any stretch) coal plants that will have to be taken off line as they age out and simply can not be “fixed” with carbon capture of one sort or another. Not as cheap as coal but half the emissions of some very nasty stuff.

      • 0 avatar
        aristurtle

        I am saying that we will reach a point, and we aren’t there yet, but we’ll get there, where there are is technically oil in the ground but it’s more cost effective to synthesize fuel from coal, or switch over powertrains to CNG, or (getting really crazy here) use electric cars.

        The fact that we’re scraping the bottom of the proverbial barrel by slurping crude out of tar sands should be a warning sign, not a reassuring development.

  • avatar

    She’ll win!

    Is Ted Turner still around and able? Here is the dream ticket:

    Bachmann-Turner Overdrive!

  • avatar
    ihatetrees

    Personally, I think gas should probably be taxed to a point where Americans pay about what the rest of the world does, in order to pay for the externalities of oil consumption.

    Bachman’s a moron – price (and cost) are important maket signals for investment and consumer choice. That said, externalities of oil consumption can be whatever economically illiterate social engineers say. Cheap fuel = Cheap movement of people and goods. That is important in a large nation.

    If I were to spend a weekend pounding my head on a rock and reading old Paul Krugman columns, I could come up with “externalities” regarding the execrable American penchant for large houses (and vacation homes)and the resultant economic damage it does. I could justify a $1 per square foot federal surcharge on everyone’s residence. Sort of like CAFE, but call it a HAFE (Housing Assessment For Externalties).

    • 0 avatar
      aristurtle

      It would probably be nice to tax gas enough that we can continue to keep our roads and bridges and other infrastructure maintained, though. The federal fuel tax was never indexed to inflation, so the Highway Trust Fund is going to go bankrupt unless we bump it up by another twenty cents or so (or start funding highways from income tax revenues, which might be better or worse depending on who you ask).

      • 0 avatar
        ihatetrees

        Without a doubt, taxing gas for road maintenance and construction is the most efficient collection method. Sure beats tolls.

      • 0 avatar
        aristurtle

        Sure is. But last time gas was scraping $4.25, a bunch of politicians (from both parties) were kicking around the idea of dropping even the eighteen cents that we collect now as a quick popularity booster. The money’s got to come from somewhere, and if it’s not fuel taxes it will come from somewhere else.

    • 0 avatar
      Astigmatism

      The irony in your comment is that the externalities regarding large houses and vacation homes are almost exactly the same as the externalities from auto fuel consumption: both (i) require us to import a huge amount of a strategically critical product from very messy parts of the world, which forces us to spend hundreds of billions on defense that we likely otherwise wouldn’t, (ii) degrade the environment through smog and (unless you don’t believe in science) global climate change, and (iii) cause damage to our nation’s infrastructure that isn’t being adequately repaired, thanks to the declining real value of the gas tax, budget cuts, and increased mobility of Americans driving larger, heavier cars.

    • 0 avatar
      dave-the-rave

      You need explain no further– “Bachman’s a moron” says it all.

      (And don’t try to confuse her with all those big words you use, like ‘houses.’)

  • avatar
    redliner

    The only thing worse than politicians that promise the moon, are the people who sit there and believe it. I wish fuel was $2.00 a gallon, but I know that that’s not going to happen.

    • 0 avatar
      thirty-three

      The only thing worse than people who believe politicians who promise the moon are people who vote accordingly and then bitch about promises being broken.

  • avatar
    TomHend

    Why do you bring up politics?

    If you are going to mock Michelle and probably Sarah you have to include TOTUS, (teleprompter) Biden and Hillary to be fair.

    • 0 avatar
      mikey

      As a Canadian, I make a point out of NOT commenting on U.S. politics/policy.

      However, speaking as a fifty something male, I think Sarah is hotter
      than Michelle.

      BTW…Here in Canada gas is approx, $4.70 a gallon. The sun still rises and sets. I see people driving giant motor homes. Lots of four door 4×4 Silverado’s. Life goes on just as usual.

      Just saying.

      • 0 avatar
        Ubermensch

        That’s because you guys have a rational health care system that doesn’t bankrupt people for getting sick. The price of fuel is nothing compared to the growing cost of our backward, corrupt, and downright criminal health care system.

      • 0 avatar
        JJ

        If you’re a Canadian, American politics will probably ultimately have more influence on your life and state of your nation than Canadian politics.

        Maybe not directly as far as social/cultural issues go but definitely long term via economical issues and foreign policy.

        Oh, and I’m from Europe so it’s not American arrogance talking.

      • 0 avatar

        You are right JJ, we have you guys to thank for the insane crime omnibus that our Conservative gov’t is trying to stuff through, despite protests from Provincial gov’ts, judges, lawyers, and pretty much anyone involved with the legal system. He was just so jealous of the US’s criminal system, as it works so well. I’ve also found an increasing contempt for taxes a la the Tea Party amongst several more conservative people I know.

        *sigh*

      • 0 avatar
        mikey

        I follow American politics, I just don’t believe that its my place to pass judgement,or comment.

        Way of topic here, but I feel the need to say this.

        Our “free” health care system works perfectly,right up to the point that you get sick,or have an accident. That kind’a why the rich and powerfull Canadians go to the U.S. for, all but the most basic of health care.

        The Canadian criminal justice system is a joke. The “hug a thug” policy is not working. We don’t lock people up until about thier 4th offence. If the judge hands down a five year sentence,the guy is out in two.

      • 0 avatar
        JJ

        @mikey,

        Sounds a lot like the Netherlands then…In fact, sounds exactly like the Netherlands.

      • 0 avatar
        rpn453

        I’m sure glad I’ve never personally known anyone who has been sick enough or had a bad enough accident that our health care was inadequate.

        However, the family of the 30-year-old guy down the street recently spent hundreds of thousands for medical treatment in the U.S. because the doctors here couldn’t do anything about his cancer. They ended up also not being able to do anything, but they still kept the money.

    • 0 avatar

      I published this quote because it’s germane to gas prices, which may be the most important political issue to the car industry/market. And I didn’t mock Ms. Bachmann, so much as point out that her understanding of markets leaves something to be desired. There’s a subtle but important distinction there.

      Finally, I don’t have to “pick on” anyone in order to meet some arbitrary fairness standard. When I find a story that’s relevant and captures my imagination, I write it, period. The only other story today that comes close to this, in terms of connecting the presidential election to the world of cars, is this piece on Rick Perry and the issue of Texas license plates with confederate flags… and I think it’s not really a story until something happens. Meanwhile, if the fact that both Bachmann and Perry are Republican candidates only confirms your suspicion that I’m somehow a leftist operative, remember that the White House doesn’t exactly love my work either. I figure if I’m pissing off all sides, I’m probably doing something right…

      • 0 avatar
        TomHend

        The global economy is about 60T, the global derivatives postion according to the Bank of International Settlements in Switzerland, no reason to doubt, to Q111 is 700T.

        The debt of Portugal, Italy, Greece etc. could easily be restructured and the global ecomnomy and the banks could absorb several billions of dollar in losses and we could move on. But the world is sitting with the most complex, not liquid trades that nobody wants. The global economy can not absorb hundreds of trillion in hits.

        Everything from housing to your gas tax is tied to these complex trades.

        You could raise the gas tax to $1000 a gallon it will not register.

        I know this sounds like hyperbole, but right now the global financial system, that we know, is sitting on the edge of a cliff.

        Arguing about gas taxes misses the big picture.

      • 0 avatar
        TomHend

        The global economy is 60T, the global derivatives postion, according to the Bank of International Settlements in Switzerland, no reason to doubt- is 700T.

        Portugal, Italy, Greece etc.could restructure their debts and the banks and global economy could take hits of hundreds of billions and we could all move on.

        The problem is everything from housing to your gas tax is tied to these complex, illiquid, derivative trades that Wall Street dreamed up, that nobody wants and that no central bank in the world can bail out.

        You could raise the gas take to $1000 a gallon it will not register.

        Arguing about the price of gas, or taxes misses the bigger picture by a very wide margin.

        And not for nothing, I did not accuse you of being right or left, pretty soon it will not matter anyway.

      • 0 avatar
        Robert.Walter

        “the global derivatives postion, according to the Bank of International Settlements in Switzerland, no reason to doubt- is 700T.”

        No idea really, but aren’t some of these summing to zero? Some buy derivatives against moves in one direction, while others buy for moves in the opposite direction … so when the direction moves, not all derivatives have to pay out, some accrue as profits and some of those profits go to fund the pay-outs.

        To me, at least, any move in the market, if the derivative handlers have balanced their risk, by creating equal risk perception between their different customers, and as a consequence sold equally to upside and downside market moves, these things will be self-negating, except for the profit portion that was made by selling to both sides.

        OTOH, if the derivative bankers did not do this kind of balancing when they created and sold these things, then there is gonna be a whole lotta hurt, depending on the size and direction of a move in the markets.

        Finally, aren’t derivatives just fancy condition- and time-limited insurance policies? If so, and if nobody does anything, and if the markets just remain more-or-less stable, won’t these derivatives just time-out, expire, and be a more-or-less self-solving problem?

    • 0 avatar
      30-mile fetch

      Well, if Obama, Biden, or Hillary (WTH are you dumping on the Secretary of State, anyway?) says anything that stupid about the auto world, then Ed probably will. Notice he didn’t say anything else about her platform or candidacy?

    • 0 avatar
      mike978

      Why? Arbitrary fairness, maybe your idea of fair and balanced reporting. But s Ed has said if someone says something stupid (about motoring related issues) then an article gets written. Don`t try to include POTUS and others just to make yourself feel better.

    • 0 avatar

      Mikey, that bit about our healthcare system is simply not true. Yes, we are not without issues, but when serious things arise, they are taken care of. And it is still a heck of a lot better than having to pay thousands upon thousands of dollars for surgeries. It is thankless people like yourself that put such a system at jeopardy. For every bad story we hear, there are a thousand good ones nobody tells, because we are lucky enough to consider them unremarkable.

      /rant

      As for our criminal system, you may have points about “hug a thug” not working. On the other hand, Canada currently has its lowest level of crime in 25 years. Also, if you aware of crime from an academic background, you know that a) deterrence via increased penalties often doesn’t work that well (or at all) and b) a lot of this is both socially motivated and economically motivated (especially in drugs). Increased penalties do not prevent such motivations.

      Beyond that, I speak more on the absolutely insane internet bill that is being stuck in with all of this, without hearings or any public consideration. That particular bill is a complete affront to our privacy rights.

      Ultimately: I wouldn’t mind the omnibus and its initiatives were informed by actual facts, statistics, findings and educated input. But it isn’t. It is a typically moralistic, socially Conservative detached white middle-class male who just guesses at how the criminal segment thinks and goes with it. Proof: Mulroney doing the opposite of what was recommended by the Fraser Institute on Prostitution laws. 25 years later, the same problems, the same number of prostitutes, and the same social damages (mostly against said prostitutes) have continued and grown. We are just now correcting that mess (maybe).

  • avatar
    tonto goldstein

    I don’t recall gas being that cheap in 2009 either, but let’s examine her comments in the most favorable light rather than reacting with the obvious truism that the market sets prices (in lieu of price controls) and that therefore she is an idiot for stating otherwise.

    Since she is a Tea Party type we can presume that she means that Tea Party policies would necessarily lead to lower oil prices and possibly greater domestic oil refinement. Let’s examine some of those polices: 1. greater domestic drilling and/or refinement – this will definitely push the supply curve over resulting in lower prices in macroecon terms. 2. lower taxes on gas? – if this is a tea party position then it is a no-brainer lower prices will result. 3. strong dollar vs. weak dollar policy – since oil is priced in U.S. dollars we have seen oil prices rise in relation to a weakening dollar.

    None of these policies will, however, guarantee a price below two dollars but I think it is a better analysis of her intent in making the statement.

    • 0 avatar
      Acd

      It dropped below $2.00 sometime around late 2008 or early 2009–I had a V8 Chrysler back then and it was great.

      I’m not sure that she can guarantee a price but certainly a willingness on the part of the U.S. Govt. to actually increase energy supplies (as opposed to decreasing them as most of their policies do under the current regeme) would lead to some degree of price decrease.

    • 0 avatar
      CriticalMass

      Oil being priced in dollars means there has been no impact of a weakening dollar on oil imported to the US – a dollar is a dollar. You can be sure that our Iranian and Venezuelan friends in OPEC will not rest until oil is priced in Euros or some basket of currencies in order to put the screws to us. An earlier post mentioned US monetary policy changes that might be made. Consider a policy change by the Saudis to support pricing in something other than dollars. Now there’s a real nightmare in a time of a declining dollar.

      • 0 avatar
        tonto goldstein

        A dollar is not a dollar. The value of the dollar changes over time as it is traded in international currency markets. (Not wanting to insult your intelligence but the following is some background in case children are reading.) Supply and demand determine the dollar’s value. In a time when the dollar is “weak” in relation to other currencies countries that sell oil will require more dollars per barrel. When the dollar becomes “stronger” they will require fewer dollars. Global supply and demand for oil can affect this or even make it relatively moot, but recently many theorize that the fluctuations in oil prices have been due to U.S. dollar value rather than supply and demand for oil. Now, that having been said, and if it is true – a weaker dollar means higher global oil prices per barrel. That means the U.S. consumer has to pay more for a gallon of gas. This is where the Bachmann quote and subsequent discussion comes in. Sure, the U.S. consumer does not have to worry about the exchange rate when purchasing oil products, but that doesn’t mean that when the global price rises and the local price of gasoline rises in response that the consumer is not hurt by the higher out of pocket cost.

      • 0 avatar
        Robstar

        I can’t remember anytime in the 2000’s that gas was under $2/gallon. Right now it’s around $3.70-$3.90 here. I’m the Chicago area.

        She might as well be telling me the moon is made of cheese. I’d believe her around the same.

      • 0 avatar
        CriticalMass

        Exchange rate risk was the point of the post but you raise interesting points Tonto. As the dollar “falls” (change in relationship to other currencies) the other currencies have to pay for their oil with more dollars but those are offset by the fact that their currency now buys more dollars than it did before so they may actually see a decrease in their cost of oil. On the other hand that increased need for dollars has an effect on supporting the price of the dollar somewhat as there is now increased demand for dollars to shuttle off to the producers.

        As to the producers, what they may “require” in terms of price has only a small relationship to the market price as there are so many factors contributing that it is difficult to say that the value of the dollar is a driving factor in the price of oil. Factors like political risk (we bomb Iran for instance), production interruptions of other types (refineries off line, etc) , perceived future demand weighed against estimated stocks and, most importantly of all, how much of the stuff is going to be pumped. What did they “require” when the price of oil was under $15 a barrel ten or eleven years ago? What did they “require” when the price collapsed during the more recent economic slowdown? Ultimately they are as much at the mercy of their own pumping schedules and of the market as we are and there are real questions about the impact of that “market” and its players (speculators) that needs some serious study. Earlier this year we were positively floating in the stuff with all storage full and tankers parked offshore unable to unload and the price did not change much at all – something is wrong with that picture.

        The producers have to walk a fine line too; if they continue to try to limit production to support the price they only make alternatives more economic or reduce demand and risk a collapse of their own product’s price. Apologies for long winded response but the contribution of the value of the dollar to the price of oil does not seem the central factor to me as long as oil is priced in dollars. Should that change, well, the whole game would have to change and, when you think about it, in the end, after the initial catastrophe, it would likely force a strong dollar policy on us and, by extension, force us to do all the fiscal things that our government (both sides-all sides) has failed to do for the last 50 years. As always though, there are unintended consequences no matter where you turn. As “they” say, all the easy problems have been solved. Now all that are left are the hard ones.

  • avatar

    Gas should be what the free market dictates. lowering the price by cutting the fuel tax would help the economy, along with less regulation.

    Ron Paul 2012 join the Revolution, this time it is being televised.

    • 0 avatar
      Strippo

      I’ll stick with Netflix.

    • 0 avatar
      gottacook

      Are you serious? With interstate highways needing repair, if you want the federal gas tax to be zero, presumably you want the federal contribution to any such infrastructure maintenance be zero as well. You want more I-35-style bridge collapses? I guess so.

      • 0 avatar
        mazder3

        @gottacook

        I agree with your sentiment but I-35W was a design failure not a maintenance failure.

        http://www.usatoday.com/news/world/2008-11-13-628592230_x.htm

        http://www.thetruthaboutcars.com/2011/06/the-tragedy-of-the-gas-tax/

      • 0 avatar
        gottacook

        Okay, perhaps a bad example – but does anyone think existing maintenance of bridges is sufficient? According to an American Association of State Highway and Transportation Officials news release (www.aashtojournal.org/Pages/032511fhwa.aspx), “President Barack Obama’s proposed Fiscal Year 2012 budget calls for $320 million for bridge inspections [by the the Federal Highway Administration]. The proposal would reduce the backlog of bridge rehabilitation projects first identified in 2006 by 50% in the next six years, according to the administration. Since 1994, the percentage of bridges in the worst condition has declined from 19% to 12%.” I don’t know the status of this budget item, but even if it’s fully funded, that still leaves a substantial backlog of unfinished projects, and possibly inadequately frequent inspection going forward.

      • 0 avatar
        Robert.Walter

        I suspect the next move after cutting gas tax and eliminating maintenance would be to privatize the interstates and convert all of them to a pay as you go Koch Bros.-owned troll road affair.

      • 0 avatar

        cut not eliminate. guess not.

    • 0 avatar
      30-mile fetch

      Yes, please, reduce the gas tax so our roadways can deteriorate. That way I can spend the saved money on more alignments, blown out tires, and worn suspension components. Wouldn’t mind having a few more rattles in the dashboard, either.

    • 0 avatar
      mike978

      What? Forget the impact of road repairs and maintenance 18c is trivial when gas is around $4.

    • 0 avatar
      Bryce

      Youll be driving on dirt roads soon if gas isnt taxed properly

    • 0 avatar
      Robstar

      Hm if roads go to dirt, maybe I can finally convince my wife I _do_ need a 200cc dual sport to go to work!

  • avatar
    korvetkeith

    One change in the Fed’s monetary policy could radically change the price of oil (in dollars). Assuming she could pinch Bernanke or get Volcker type hawk to run the Fed, she could very well achieve said goal.

    • 0 avatar
      MrGreenMan

      +1: Sorry I just missed this: Restore the value of the dollar — when he was “the wizard”, Greenspan had a soft peg to $200-$300/ounce gold — and commodities magically snap back to the old price.

      • 0 avatar
        korvetkeith

        I hadn’t heard that. Greenspan was generally as easy as they come with regards to monetary policy. There was big time central bank gold selling going on when gold was $250/oz.

      • 0 avatar
        MrGreenMan

        Check here (it’s in a comment; I can’t immediately find a better references other than gold buyer blogs):

        http://www.economist.com/blogs/freeexchange/2011/07/money?page=2

        You have to remember: Greenspan did his best before the dotcom run-up in the Clinton years. He did lose his mind, but when he was establishing himself at the start of his chairmanship from 1987 to about the mid 1990s, he followed a soft peg.

        There was some real and sustainable growth out of the soft recessions at the end of Reagan and mid-Bush41 years — then it went nuts, unsustainable growth on paper, loose money, Nasdaq 20Million, all crash, and badness.

        Edit: Here’s a link that quotes one of his earlier papers where he proposes the soft peg to Gold in 1980: http://www.gold-eagle.com/greenspan.html

        Note that Greenspan did flip. It’s a siren’s song of central bankers: make some loose money, keep your friends in office, get some lavish attention in the short term. Greenspan succumbed to that. I believe this is one of the flaws in central banking — we change the natural business cycle of a hard currency to the manufactured booms, busts, and bubbles of central banking — but in his first term, Greenspan did try to maintain sound policy, and if you look at that price of a Buick, you would see what would be the equivalent of a $45,000 Acura today at a $20,000 Buick for a large stretch of the late 80s and early 90s…and then we had growth but also inflation and declining purchasing power in the go-go later Clinton years.

  • avatar
    Sinistermisterman

    I hope you Americans realize quite how scary all these Republican candidates appear to the rest of the world. Don’t get me wrong, I don’t think Obama is perfect, but the chance one of these folks becoming president scares the bejesus out of me. Bachmann and Perry make Dubya look like a genius.

    • 0 avatar
      mazder3

      This may sound crazy but I think the Republican party WANTS Obama to win. It’s easier for them that way. That may be why all media ignores Ron Paul and hypes Bachmann/Perry/Trump/Palin/Santorum/Gingrich. But I’ve had a beer or two so this is all inebriated conjecture, grain of salt, etc.

      • 0 avatar
        zigpenguin

        For some levity, The Onion had a great story on that:

        http://www.theonion.com/articles/new-gop-strategy-involves-reelecting-obama-making,21113/

      • 0 avatar
        56BelAire

        mazder3, I really admire a guy(assuming you’re a guy) who admits that he is drinking when he comments online. On alot of sites I browse I think the majority of the posters are either drunk, drugged or insane. LOL

        That being said, I find nothing to quibble about with your post. I think the MSM(although liberal) desperately wants a RINO(ala McCain) to win the GOP nomination to assure a second term for the progressive idealogue we now have as POTUS.

      • 0 avatar
        30-mile fetch

        “This may sound crazy but I think the Republican party WANTS Obama to win.”

        Not a bad political strategy, really. I mean who on earth WANTS to be president in the middle of this mess? Seems like political suicide. How long should be give the next president to single-handedly turn the economy around before we crucify him/her too?

    • 0 avatar
      korvetkeith

      It’s our president, not yours. I don’t want another president that considers themselves president of the world. I just want someone to take care of our backyard and say f-all to everyone else.

      • 0 avatar
        Sinistermisterman

        I appreciate that you may want a president that takes care of Americans first, but the US has such a MASSIVE impact on the rest of the world, socially, economically and politically that even if you don’t give a crap about anyone beyond the US’s borders, we (ie the rest of the world) do care about who gets elected.

    • 0 avatar
      MrGreenMan

      It wouldn’t matter if somebody returned America to a non-interventionist strategy. Who cares much about the president of France, except for maybe the old Francophone colonies that France is prone to invade?

      • 0 avatar
        steeringwithmyknees

        non-interventionist? As in pre-spanish american war style?

        A little late for that.

        As numerous posts here have stated, we do not have enough oil (regardless of how much we drill or frack) to satisfy our current and future oil consumption. Not by a long shot.

        If you really want more non-interventionist policies, better start supporting things like windmills, public transit and education.

    • 0 avatar
      chris724

      The “rest of the world” wants the US to fail. Why would I care what they think?

    • 0 avatar
      Acd

      Much of the rest of the world is run by socialists, dictators and thugs. I’m OK with not having their approval.

      • 0 avatar
        mike978

        lol yeah Canada, the UK and Germany are run by socialists (not). Stephen Harper, David Cameron and Angela Merkel (the respective leaders) are all from the center right and lead good sized countries. It is your sort of hyperbole that makes Americans look like fools.

      • 0 avatar
        Acd

        I’m not sure what is so terrible about allowing Americans be able to keep more of their own money by paying less for energy but then again I look like a fool to the rest of the world anyhow.

      • 0 avatar
        30-mile fetch

        Are you talking about the dictators and thugs we support or the dictators and thugs we declare as our enemies? Or the dictators and thugs we supported in the past but now aren’t so fond of?

      • 0 avatar
        Acd

        “Are you talking about the dictators and thugs we support or the dictators and thugs we declare as our enemies? Or the dictators and thugs we supported in the past but now aren’t so fond of?”

        Yes.

  • avatar
    MrGreenMan

    It would be easy to get to $2/gal if she just found a way to get the dollar converted to a hard currency pegged to something like $35 for a barrel of Sweet Texas Crude. Restore the value in the dollar and we can get back to a $20,000 top-of-the-line Buick, too.

  • avatar
    Educator(of teachers)Dan

    There are days when I wonder what any of these politicians “believe.” Honestly I think most of them would say anything to get elected.

  • avatar
    Z71_Silvy

    Personally, I think gas should probably be taxed to a point where Americans pay about what the rest of the world does, in order to pay for the externalities of oil consumption.

    That is so short sighted. Yeah…that’s exactly what we need more of…taxes.

    The reason oil is so overpriced and the reason gas is so expensive is because A) we are not drilling in this country and B) because there are no new refineries.

    Fix those two problems, and the price of gasoline gets to where it belongs.

    We DO NOT need more/higher taxes. We are taxed enough as it is. Such an assertion is the EXACT reason we are in the economic depression we are in today.

    • 0 avatar
      mike978

      No we are not taxed enough. Taxes are around 14.5% of GDP, the long term average is around 18-19%. Under Reagan they were in this area and taxes increased in 1982 with the economy doing well in 83 and 84. Taxes were also increased by Clinton in 93 and we all know the good economic situation after that. Of course there were other events that helped. Just read this weeks Bloomsberg Business magazine editorial which makes many of the same points – hardly a left wing magazine.

      • 0 avatar
        geeber

        No, we are taxed appropriately. What is happening is that spending has increased under both Bush and Obama. We need to cut spending.

        Also note that many things that really aren’t counted as taxes actually function as such. For example, in my municipality, the bimonthly sewer/trash bill has virtually doubled over the past two years. Why? Because the local authority has to pay for improvemements mandated by federal water quality standards designed to protect the Chesapeake Bay (we live along the Susquehanna River, which ultimately empties into the bay). This is not counted as tax for official purposes, but if we don’t pay, we end up with a lien on our property.

        Same with emissions and vehicle inspection. The former is now mandated – and we have to pay it if we want to drive the car on public roads. Not officially a tax, but we still have to pay it.

      • 0 avatar

        But geeber, doesn’t that stuff seem pretty important? Water quality standards? Safe vehicles? Kind’ve important.

    • 0 avatar
      30-mile fetch

      Silvy,

      We use about 25% of the world’s oil yet have much less than that (5%? maybe?)in proven reserves. Drill all you want, it won’t slake our thirst.

      And if you do drill more, what guarantee do you have that the oil will stay in this country? What if Exxon wants to sell oil drilled in Colorado to Russia or China instead of the US market?

      And I don’t think high taxes led to the housing market collapse in 2008.

    • 0 avatar
      psarhjinian

      Part of the issue with taxes is that the services still need to be delivered, and that tax policy over the past few decades has simply deferred the problem until services collapse and/or left the lowest rung on the governmental ladder (municipalities) responsible for tax gathering in perhaps the most inefficient, overhead-heavy way possible and/or resulted in underhanded revenue generation.

      Take sales tax, for example. Most (developed) countries have a federal VAT and some might have a state/provincial one. The US, by comparison, has a byzantine wreck of state, regional and local taxes, each with it’s own administration. Guess which costs more to run?

      What you need is a simplified, federal tax system. A sane gas tax would be part of that, would probably reduce the need for the back-door red-light cameras, speed traps and so forth, and might cost less in net terms. Lower long-term net cost, though, is something American governments (and other western nations in general, to a lesser degree) are failing to understand.

      • 0 avatar
        geeber

        Only problem with your theory is that many of those European nations that have enacted VAT taxes are economic basket cases.

        France, for example, has a top income tax rate of 45.8 percent, along with a VAT at 19.6 percent, but it has deficit problems more severe than that of the U.S., and its economy has underperformed the American economy for a long time.

        Great Britain has a top income tax rate of 50 percent, and a VAT of 175. percent. But Great Britain has hardly outperformed the economy of the U.S.

      • 0 avatar
        mike978

        geeber – Please talk some sense – German is hardly an economic basket case and it has a federal sales tax. Also I know a little about the UK, especially since I am a citizen of that country. The 50% rate is being debated since it was newly enacted (2008/2009). The UK has lower unemployment than the US and since you think especially low taxes should power a country forward, economically, then even if the UK was only doing as well/or as badly as the US it shows your argument to be wrong. Taxes are low – the Bush tax cuts were extended, payroll tax cuts were added to the Bush tax cuts, the Stimulus package was c.50% tax cuts (AMT and making work pay tax credit). The amount of tax taken as % of GDP is historically low, spending is also historically high. So both need to be looked at.

      • 0 avatar
        geeber

        Mike, please learn to read the posts before responding. I referred to France, not Germany.

        But since you’ve brought up Germany, I can speak about it, as I have relatives there, and have visited it numerous times. Let’s just say that the official unemployment rate is held down by people who stay in school for years and years, as my cousins have done.

        For that matter, in the United Kingdom, the government has used “sickness benefits” and paid people to stay in college in order to lower the official unemployment rate. You might want to consider those key factors before tooting the United Kingdom’s horn.

        And I see nothing in your post that contradicts the fact that the United Kingdom has a top income tax rate of 50 percent. The country hasn’t done all that well since it was enacted, now has it?

  • avatar
    psarhjinian

    This thread has been remarkably civil. I’m impressed.

    • 0 avatar
      Robstar

      Well said psarhjinian. This is the reason I come to ttac. I’m not sure if this is due to more restraint or more moderation…but in any case the end result is good to read.

      With that said, I don’t vote for either of the major parties & wouldn’t mind paying a(n) (increased) gas tax (and I live way out in the suburbs & drive 65 miles RT per day).

      On the other hand I think my property taxes are atrocious. I pay a toll every day to go to/from work (which I wouldn’t mind if “laneage” was increased as well so could get rid of the 4 lanes -> 2 -> 1 -> 3 the merging roads lead me through).

      The only promise I want is that the gas tax would ONLY be used to fund items directly associated with congestion & roads such as:

      – Public transport (I hate it but I can understand why some people need it)
      – Roads & Bridges maint/repair
      – Many more I’m sure I’m forgetting.

  • avatar
    Beerboy12

    Higher gas prices will lead people to think more carefully about their next vehicle purchase and possibly more importantly businesses will need to think more carefully about transportation and fleet costs. This, in turn, will lead to the auto manufacturers thinking more carefully about what they offer. That will lead to positive change and progress in the industry and that can only be a good thing. The economy will also benefit from more efficient transport spending. Taxing gas to achieve that goal and help reduce the deficit might be a very smart move indeed.

  • avatar
    Carlson Fan

    Low gas prices would help the US economy short term, but long term would do more harm than good. It’s time people in the US realize the days of cheap gas that we can burn to our hearts content are over. Bachmann is a moron. Gas was more expensive at one point during Bush’s administration than it is today. And she’ll never in her wildest dreams get it back down to $2 a gallon in 4 years.

  • avatar
    dwford

    With a Republican congress, she could do it. Allow drilling in ANWAR and off the east and west coasts, restore sound money policy. She will get $.18 of the way there once the federal gas tax expires soon. Think the Tea Party is going to re-up that with out a fight?

    Of course, she isn’t getting elected President anyway.

  • avatar
    gslippy

    As someone who could end up voting for her, I think she continues to step in it. Let the market rule gas prices, even more than they do now.

    Her statement that gas prices are somehow managed by the President means she fell into the trap of big/centralized government, something she abhors.

    Michelle, please don’t write checks you can’t cash.

  • avatar

    Wow, and I thought Sarah Palin would be a catastrophic choice for POTUS, but Michelle Bachmann makes Palin look (almost)better by comparison.
    The POTUS is a powerful position but not nearly enough to control the price of a worldwide commodity, so unless she has some massive subsidies in mind she’s pretty well hooped I’m afraid.
    IIRC she also said god talks to her and told her to run for POTUS, the scary thing is I think she honestly believes the BS she’s spewing.
    BTW props to everyone for keeping the discussion civil, I was prepared for a left/right divide and it’s nice to see I was mistaken.

    • 0 avatar
      tankinbeans

      “…BTW props to everyone for keeping the discussion civil, I was prepared for a left/right divide…”

      This is exactly what I thought. Lately I’ve been avoiding any articles that might be even tangentially related to politics on this site because reading the constant “I’m right, you’re wrong” gets very tedious. The current post has been rather refreshing, and I’m learning a little something.

    • 0 avatar
      TomHend

      its funny Republicans are always stupid but Joe Biden, there is brain wave
      His own DE law firm kicked him out because he could not cut it, and told him to go in to politics.

  • avatar
    Robert Fahey

    She should price-match gas prices under the Elvis adminstration. (Psst — don’t tell her).

  • avatar
    ciddyguy

    Oh please, that b**ch need to just die.

    Gas was NOT below $2 a gallon when Obama was in office. Hell, it was OVER $2 a gallon with many areas of the country being just over $3 a gallon in 2008 and gas HAD been as high as $4.11 a gallon that spring as I remember gas being very high at the time.

    And this morning, I did a brief research on the price of gas and while gas prices are going down now, it’s expected to go back up once we get beyond Labor Day and I’m not surprised. We might be well $4 a gallon by Christmas with $5 gas possible by the end of 2012, at leas that was the prediction over a month ago and I still think that is plausible since gas prices are so volatile these days and that’s why I’m trying to move back to a small car that sips gas through a straw.

  • avatar
    FleetofWheel

    The crumbling infrastructure whine is as overplayed and untrue as the underpaid teacher myth.

    All your life, you’ve seen constant, large scale road projects underway.

    Isolated falling bridge stories are newsworthy because they are rare.

    Despite govt mismanagement of road budgets and cost-escalating union pay rules, the US road system is not in the dire shape wailed by the we’re-just-a-few-tax-hikes-from-bliss crowd.

    • 0 avatar
      tekdemon

      Having been on roads all around the world I have to say that you’re just plain wrong. Our roads are in horrifying condition compared even to broke latin american countries let alone the pristine and brand new roads places like China have built.

      • 0 avatar
        Robstar

        You haven’t been to Brazil recently have you? Brazil, one of the LARGEST economies in SA (If not the larges…) has their roads, in most cases, in shambles. I know as I’ve been there 20 times in the last 12 years…

    • 0 avatar
      mazder3

      @FleetofWheel

      Maybe in your neck of the woods. Come to NH to check out our spalling bridges that use landscape fabric and 2x4s to stop the old concrete from falling onto the roads below. Or 1 1/2 lane steel tressel bridges that were out of date in 1955 and have been labeled as being “ready to fall at any moment” still being used. There is one that is being held together with whatever scrap iron they had lying around. And everyone in and around government deserves blame for it. You name them and there’s blame to be appropriated to them.

      Pubs: Check- don’t like to tax or bring in money for projects (we were fiscally conservative before it was “cool”!)
      Dems: Check- what money does come in gets put into sidewalks (with no budget for winter cleaning! Brilliant!)
      Greens: Check- the I-93 corridor widening project is 25 years behind schedule because of them.
      NIMBY folk- see above.

      Oh, and for the folks in the state below NH:

      http://www.dankennedy.net/2011/08/11/more-big-dig-problems-you-dont-have-to-worry-about/

      • 0 avatar
        fiasco

        @ Mazder3 — Yeah, I used to carry a copy of an old Union Leader headline in my car from the NH Dep’t of Safety commissioner about our bridges: “Drive Fast and Don’t Look Back”. Thought it might come in useful sometime…

        Now US Route 1 is detoured from Portsmouth to Kittery because the old (WW1) Memorial Bridge was deemed unsafe for any traffic, and my understanding is the “middle bridge” for the Route 1 “bypass” (truck stop alley from pre-interstate days) isn’t much better!

    • 0 avatar
      steeringwithmyknees

      As a teacher and someone who resides where roads, bridges and other infrastructure get beaten mercilessly every year by the freeze/thaw/salting of winter, Id have to disagree on both “overplayed” counts. — although personally, i think the infrastructure problem is far less overplayed (i am comfortable with what I make, but know some very underpaid teachers).

      Do some research, use multiple sources and keep an open mind. Sometimes, no matter how obvious something is, believing it is true requires you to be able to set aside what you wish were true.

      • 0 avatar
        geeber

        Teacher pay is set at the state and local level. In some states – Pennsylvania, for example – teachers receive decent pay and very good benefits, when their responsibilities and educational requirements are taken into account.

        Here in the Keystone State, teacher pay is right where it should be – and my wife and her cousin are both public school teachers, so I have some firsthand experience with this matter.

  • avatar
    John Horner

    About the only thing which would really change the trajectory of crude oil prices would be a collapse in the economic emergence of China and India. The only thing which would cause that to happen is too horrific for even Bachmann to contemplate, I hope.

  • avatar

    http://www.gasholemovie.com/

    She probably did not see this movie, the sad story of us getting manipulated by the oil “company” and I say “company” because it is one company even though it seems like it’s more than one.
    Americans are really stupid judging from the recent vote in Iowa, how in the world she got so many votes? half of what she is saying is incorrect and not based on facts, also, she will repeat a false statement time after time just because she knows who is she dealing with, nobody is paying attention.
    She will bring the price of oil down, right, by that time she is getting a phone call from exxon/mobile/shell/BP/chevron asking her “what’s going on, are you sure you don’t need more money from us?” no problem, “we’ll give the money to Rick Perry”
    What a shame.

    • 0 avatar
      mazder3

      Straw polls really don’t count in the least. Ames is just a big meet-n-greet BBQ. Candidates can bus people in and pay for their literal meal ticket. The only republican to win the Ames straw poll and win the national election was W.

  • avatar
    acuraandy

    @Pch: if you are willing to pay $44k for a Chevrolet Volt/Nissan Leaf/Prius plug-in that only drives 40mi before needing a 6hr charge or whatever ridiculous amount it takes, go right ahead. I’ll take a high gas mileage Civic/Elantra/Focus/YUGO before I am willing to.

    Not to mention, WHERE IS THE ELECTRICITY SUPPOSED TO COME FROM? Currently, a sizable portion of the electricity produced in the US, as much as the American Kremlin tries to destroy it, is made by good old-fashioned, ‘carbon footprinting’ COAL. That’s right, what most of the first-world has used for over a century to make electric power available to the masses (and by the way, cleaner than it has ever been).

    Like it or not, gasoline/diesel internal combustion engines will continue to get all of us around and move goods for several decades to come, be it by car, truck, motor home or Stalin-bus. And the less expensive fuel is, the better off society will be. It is the most cost effective and most accessible.

    Little R/C cars without controllers or toy trains will not solve this issue.

    • 0 avatar
      Robert.Walter

      “cleaner than it has ever been”…

      Makes me think of Pigpen from Peanuts, he too was sometimes cleaner than he had ever been, but was never really very clean and never remained so for long.

    • 0 avatar
      Pch101

      if you are willing to pay $44k for a Chevrolet Volt/Nissan Leaf/Prius plug-in that only drives 40mi before needing a 6hr charge or whatever ridiculous amount it takes, go right ahead

      I know that this will be difficult for you to comprehend, but that has absolutely nothing, zilch, zip, nada to do with my earlier comment to you.

      Once again — you reside in some sort of far-right Fantasyland in which the US can magically achieve energy independence just by voting against Democrats. Which would be great if it were true, but it isn’t.

      There is no way for the US to drill its way out of the problem. There simply isn’t enough oil underneath the US for that to happen. The US has been dependent upon imported oil for decades, and will remain dependent on imports just so long as we keep using it at the rate that we do.

      No Republican politician or Tea Party nutjob is going to create oil where it previously didn’t exist. Time to wake up — it’s a matter of geological reality, not a right-left issue.

      • 0 avatar
        steeringwithmyknees

        Ya know, contamination of the soil by commie germs and liberal runoff in places such as New York, San Francisco, DC, Chicago, Boston, Seattle, Philadelphia and Los Angeles is the only thing preventing a whole new crop of oil trees whose fruit will guarantee us energy independence and push-rod v8’s in every driveway.

  • avatar
    SpeedWeasel

    “Somebody ought to do something!”
    Every time the price of gasoline spikes, it’s the same short-sighted sob-story on the six-o’clock news: Some young reporter is sent to a gas station to stick a microphone in the yap of some random lumpenprole who was filling up his Canyonero (“It’s a squirrel-squishing, deer-crushing driving machine.”).

    Invariably, the interviewee bemoans the price of gasoline, claiming that s/he can no longer feed his/her children: “Somebody ought to do something about the high price of gasoline!” they say. But not they themselves, of course. Drive less? Take the bus? Are you kidding? I’m important!

    Then the price of gasoline goes down a few weeks later and everyone forgets.

  • avatar
    agroal

    “The day the president became president we started to call him president because he was the president who we elected to be president, hence the title president” She’s got the ditz vote wrapped up.

  • avatar
    NN

    Will Chris Christie please stand up and give the republicans a reasonable choice who is not a demagogue or cartoon character?

    And yes, I also support a hike in Federal gas tax. Phase it in incrementally over a 5 year period to ease the adjustment and allow consumers to make more efficient choices in their next vehicles.

  • avatar
    Carlson Fan

    “Phase it in incrementally over a 5 year period to ease the adjustment and allow consumers to make more efficient choices in their next vehicles.”

    A BIG +1 to that. The sooner we get this country off imported oil the better we’ll all be. Which should have been our plan 40 years ago with the first energy crisis. This is the reason I’m all for EV’s like the Volt. Not the total solution but like more heavily taxed gas, definitely a piece to the puzzle. Add in NG cars, public transportation, smaller vehicles, ect ect.

    • 0 avatar
      steeringwithmyknees

      exactly – those alt fuel vehicles may not be the mainstream choice right now, but maybe with some refinement and technological advances, they could be at some point.

      When what we know as cars were first developed, they were not instantly available/desirable to the masses either.

  • avatar
    DougD

    I cannot take seriously the promised simple solution to extremely complicated problem. I’ll make gas less than $2 a gallon. Right.

    I’d encourage the tax naysayers to travel to other countries and see how high gas prices work in Canada, the UK and continental Europe. And I say work on purpose because at the moment it seems to be working better from an overall society standpoint than in the US. Go check it out.

  • avatar
    timotheus980

    I have a hard time seeing why gas prices should be more than about $2 per gallon. Yes oil will eventually run out but there are a lot of good cheap substitutes readily available with many more decades of inexpensive availability such as coal liquification and natural gas. If nothing else gas and other hydrocarbons can be chemical built using nuclear energy for about $4.60 per gallon per the NY times: http://www.nytimes.com/2008/02/19/science/19carb.html.. I wish the free market would be allowed to work better because that would mean more people would start using cheaper substitute such as CNG. The root problem of many problems is the need for adequate tort reform. Companies are absolutely scared to death of being sued for ridiculously huge amounts of money and that causes them to not want to attempt new technologies that are meaningful.

    A gallon of milk sells for <$4 per gallon and it has to be refridgerated at all times, individually be packaged and labeled, brought from production to consumer within days, specially treated or "refined" for purity and safety, has to be carefully collected and transported using special containment from dairy farms spread all over the country that have to endure rigorous gov't inspections and regulation to stay in business. Now explain to me why a gallon of gasoline which does not have all of these disadvantages should cost more than milk.

    • 0 avatar
      DougD

      Because the US has cows and you can find them easily on the surface of the earth.

      • 0 avatar
        timotheus980

        Yes, heaven forbid find it in one big easy-to-drill-a-well-to deposit, that would be harder than having thousands of farms with millions of cows all spread over the freak’n continent

      • 0 avatar
        MoppyMop

        There’s also the fact that it’s a lot easier for supply to scale with demand when the “supply” can reproduce itself with no human input beyond feeding them, housing them and letting them get it on. Despite the best efforts of those outside the reality-based community, oil has not yet been shown to do this on a faster-than-geologic timescale.

        Also I’m not sure where you got the idea that oil wells and refineries are not, in fact, spread all over the continent just like dairy farms.

      • 0 avatar
        moorewr

        Yes, my efforts to dig for cows have, so far, been a fiasco.

      • 0 avatar
        Pch101

        Yes, my efforts to dig for cows have, so far, been a fiasco.

        Unfortunately, I flunked out of my petroleum husbandry class, so my efforts to breed oil have been equally unsuccessful.

    • 0 avatar
      aristurtle

      It isn’t hard to break down, really.

      http://www.eia.gov/oog/info/gdu/gasdiesel.asp

      On average, 66% of the cost of a gallon of gas pays for the crude oil, 12% pays for refining, 11% pays for distribution, and 11% pays for state and federal taxes.

      You can’t buy crude oil straight from a well for $2/gallon. Why would gasoline be cheaper?

      And CNG vehicles have nothing to do with tort reform, where are you even getting that from? Honda’s been making a CNG Civic for more than ten years. The problem is that nobody owns a CNG car, so nobody wants to build a CNG filling station because there aren’t enough customers, so nobody wants to buy a CNG car because there aren’t any filling stations, so nobody owns a CNG car…

      • 0 avatar
        timotheus980

        I mean to say that companies are hesitant to take technological risks for fear of getting ridiculous lawsuits piled on top of them after the slightest thing goes wrong. This doesn’t exclusively apply to CNG cars but to anything that hasn’t been proven beyond all question. When I worked at DaimlerChrysler, there was this moron that sued us because he drove his Jeep into the creek (the water was up above the hood) and surprise! it hydrolocked the engine. His excuse? design failure. The only reason it didn’t go anywhere is because an ICE is proven understood old technology. What happens when that same moron drives a Chevy volt into the creek and electrocutes himself? Payday!

      • 0 avatar
        aristurtle

        Except that expenditures on lawsuits are not anywhere close to a large enough percentage of corporate loss for that to be true. The biggest fear isn’t that they’d spend billions developing something and then lose ten million in a lawsuit. The fear is that they’d spend billions developing something and then lose all those billions when nobody buys it.

      • 0 avatar
        John Horner

        The fear of lawsuits is often an excuse companies use for not moving forward, but it is more of an excuse than it is a reality.

        Do you think Google or Apple spend any time not doing things because someone might sue them?

  • avatar
    PaulVincent

    Yes, more taxes; because we just know that the government will put them to use as intended with never a chance that they will be spent on pet projects. Yes, more taxes; because the average American isn’t already under enough financial strain as it is. Sure, we’re stupid, so pile on the additional taxes.

    • 0 avatar
      aristurtle

      Again, the federal fuel excise tax was never indexed to inflation (Congress: “derp!”), if it doesn’t go up another twenty cents or so then the Highway Trust Fund is going to go broke.

      Of course, right now they want to go the other way and ditch the eighteen cents we currently collect per gallon. I guess highway construction and maintenance is free, like lunch!

      • 0 avatar
        geeber

        About 1/3 of federal fuels tax revenues are used for projects that do not either construct or maintain roads and bridges. When all of these tax revenues are used for road and bridge projects, we can then talk about raising them if this amount of revenue is still not sufficient to maintain our infrastructure.

      • 0 avatar
        aristurtle

        Ah, yes, the “33% of the money goes to stuff I don’t directly use, so burn it all!” argument.

        Protip: people taking mass transit means reduced wear on roads, which means reduced maintenance costs for those roads.

        Also, your math is bad. If our highway fund spends 33% of its money on stuff you don’t approve of, and it’s underfunded by 50%, cutting out that third isn’t going to fix anything, is it?

      • 0 avatar
        geeber

        aristitle: Ah, yes, the “33% of the money goes to stuff I don’t directly use, so burn it all!” argument.

        Incorrect. If the problem is not enough money to pay for needed repairs to our roads and bridges, then it’s fair to ask why this state of affairs exists. If 33 percent of the revenues are being diverted to non-road and bridge projects, then logical reasoning suggests that we start with this salient fact.

        The fact that you support the diversion of these revenues does not, a. make it irrelevant to solving the problem, or b. mean that it represents the most effective use of these fnds, particularly if our transportation infrastructure is supposedly in such dire straits.

        You can’t claim that we “don’t have enough money for roads and bridges” and then ignore the roof the of problem when it’s inconvenient for you.

        aristutle: Protip: people taking mass transit means reduced wear on roads, which means reduced maintenance costs for those roads.

        Again, incorrect. First, the volume of people diverted to mass transit is not sufficient to make any difference the amount of wear on roads and bridges. Please note that, in all but three European countries (Austria, Denmark and Ireland), over 80 percent distance traveled is by private automobile. This is on a continent where gasoline prices are high, distances are short and mass transit is heavily subsidized. To suggest that Americans are going to better this figure, with our much lower population densities (less than 1/6 of Germany’s population density, for example), is in the realm of fantasy.

        Second, most road and bridge wear is caused by weather and tractor trailers. Diverting people to mass transit isn’t going to make change the freeze-and-thaw cycle, and last time I checked, subway systems and trolleys aren’t designed to carry cargo.

        aristutle: Also, your math is bad. If our highway fund spends 33% of its money on stuff you don’t approve of, and it’s underfunded by 50%, cutting out that third isn’t going to fix anything, is it?

        First, the question of whether I approve of it is irrelevant. You need to drop that red herring. What matters is whether revenues from the federal motor fuels and excise tax are being used for roads and bridges. If not, we’ve identified a key problem in the “shortage” of funds. Which, I have.

        Second, making that 33 percent available again will go a long way to denting that 50 percent figure. To suggest that doing so isn’t going “to fix anything” is disingenous at best.

        If this stil isn’t sufficient, then we can talk about increasing the federal motor fuels and excise tax.

      • 0 avatar
        aristurtle

        First, the volume of people diverted to mass transit is not sufficient to make any difference the amount of wear on roads and bridges.

        Nonsense. Road maintenance in cities is overwhelmingly more expensive, both in terms of the money the government actually pays and in terms of the frictional costs borne by everyone else, than highway maintenance, so measuring by “percentage of miles traveled” is worse than useless, it’s misleading.

        Second, most road and bridge wear is caused by weather and tractor trailers.

        On highways, yes. However, a good chunk of that third you’re complaining about goes towards development on freight rail.

        First, the question of whether I approve of it is irrelevant. You need to drop that red herring. What matters is whether revenues from the federal motor fuels and excise tax are being used for roads and bridges. If not, we’ve identified a key problem in the “shortage” of funds. Which, I have.

        Second, making that 33 percent available again will go a long way to denting that 50 percent figure. To suggest that doing so isn’t going “to fix anything” is disingenous at best.

        Immaterial. Can you wave a magic wand and stop Congress from earmarking away 30-40% of every revenue stream? No? Then at *best* the third you don’t like and the two thirds that you do like will be equally underfunded. At worst the third you don’t like will remain fully funded and everything else will suffer. This is what happens when you don’t index an excise tax to inflation.

      • 0 avatar
        geeber

        aristutle: Nonsense. Road maintenance in cities is overwhelmingly more expensive, both in terms of the money the government actually pays and in terms of the frictional costs borne by everyone else, than highway maintenance, so measuring by “percentage of miles traveled” is worse than useless, it’s misleading.

        Your original contention was that this diversion of revenues to mass transit would decrease maintenance costs. This is no proof of that this would be the outcome, as even in Europe, where there is a higher population density, high gas prices and more subsidies for mass transit, the great majority of vehicle miles traveled are still by private automobile. The United States simply is not going to even approach the European figure, let alone surpass it. Whether roads are more expensive in urban areas doesn’t matter, and there is no proof that this form of measurement is not an accurate indicator of the popularity of motor vehicles – even in countries where the official policy is tilted towards other forms of transport.

        aristutle: On highways, yes. However, a good chunk of that third you’re complaining about goes towards development on freight rail.

        Most freight rail is used in conjunction with trucks (the freight is taken off the truck, for delivery to a point away from the rail terminal). For the areas where the rail lines transfer their freight, there will be an increase in truck traffic. We’ve seen that around here in the Harrisburg region.

        As for the effect of passenger rail and mass transit on road congestion? Here is what a member of the European Parliament had to say about the impact of high-speed rail on traffic in European countries:

        “Not a single high-speed track built to date has had any perceptible impact on the road traffic carried by parallel motorways,” says Ari Vatanen, a member of the European Parliament, in his summary of a 2005 conference on European transport.

        I’ve got nothing against mass transit or passenger rail. But, if the goal is to ensure adequate funds for necessary road and bridge repair and construction, then we have to look at ALL of the factors leading to any shortage of funds.

        aristurtle: Immaterial. Can you wave a magic wand and stop Congress from earmarking away 30-40% of every revenue stream? No?

        Now you are talking about a POLITICAL problem – which, ironically enough, only further undermines your argument that the problem is rooted in insufficient funds.

        aristutle: Then at *best* the third you don’t like and the two thirds that you do like will be equally underfunded. At worst the third you don’t like will remain fully funded and everything else will suffer. This is what happens when you don’t index an excise tax to inflation.

        As I’ve said before, if revenues are still insufficient after we use all of the federal motor fuels and excise tax for road and bridge projects, we can talk about an increase. The problem is that you haven’t cleared that first hurdle as of yet.

      • 0 avatar
        Pch101

        About 1/3 of federal fuels tax revenues are used for projects that do not either construct or maintain roads and bridges.

        But what you are missing about half of the funding used for highways comes from other sources, such as income taxes and bond sales. Fuel taxes are not the only sources of funds used to build and maintain highways.

        If all of the fuel taxes were used just for highways, but highways were funded only through fuel taxes, then the fuel tax would have to be increased by more than 50% in order to make the highway funding self-sufficient. The belief that fuel taxes pay for the roads is inaccurate.

        http://subsidyscope.org/transportation/direct-expenditures/highways/funding/analysis/

        What matters is whether revenues from the federal motor fuels and excise tax are being used for roads and bridges.

        As noted, this misses the point that fuel taxes aren’t high enough to pay for the roads.

        In any case, the federal government began to impose a fuel tax in 1932 in order to offset a federal budget deficit. It had nothing to do with dedicating the funds to roads; the money went into the general fund. The Highway Trust Fund was created later in 1956, 24 years after the tax was first imposed.

      • 0 avatar
        geeber

        Pch101: As noted, this misses the point that fuel taxes aren’t high enough to pay for the roads.

        If 1/3 of the revenues are being diverted to non-road and bridge projects, then we need to start at that point. Then, if they aren’t sufficient to pay for road and bridge projects, we can talk about raising them.

        The use of federal fuels tax revenues, in some ways, mirrors the “mission creep” that currently plagues public education in this country. As schools are burdened with an increasing number of mandates and responsibilities that are only incidentally related to educating children for a role in society, their effectiveness has declined.

        This decline, however, has not caused public school advocates to examine whether public schools can ever really meeet increased expectations placed upon them, let alone whether they are the proper avenue to fulfill these expectations. Instead, we get cries for more and more tax money, which often ends up supporting an ever-larger bureaucracy that does nothing to improve public education.

        In 1956, we decided to dedicate the federal motors fuels tax to highway construction. This was a wise move, particularly since the interstate highway system truly knit together a large, diverse country.

        Today, we hear claims are that the level of motor fuels taxes are not sufficient. Given that the tax was last raised about 20 years ago, this is not an unreasonable argument.

        It is also undeniable that, since the 1970s, we’ve diverted an increasing percentage of the revenues from this tax to other purposes.

        Here in the Harrisburg region, for example, federal highway funds were used to build bike paths and beautify the downtowns of least two small towns. I have nothing against bike paths (I ride myself) and the downtowns do look better. But, if we are truly short of funds, I would suggest that these projects are not as important as repairing potholes on, say I-81, or upgrading outdated bridges.

        We need to see how this is impacting our roads and bridges, which everyone seems to agree need help. THEN we can determine whether the tax needs to be raised.

        I would like to see both issues addressed – namely, the diversion of funds to non-road and bridge projects, and whether the tax needs to be raised. This can be done to ensure more money for road and bridge construction and maintenance, and to ensure that manufacturers’ product plans aren’t wrecked by the price of gasoline (either large spikes or large drops).

      • 0 avatar
        Pch101

        If 1/3 of the revenues are being diverted to non-road and bridge projects, then we need to start at that point.

        I’ve already addressed your point. Even if fuel taxes were used exclusively for roads, then the fuel tax would still not be high enough to pay for the roads. The fuel tax would have to be increased by more than 50% for the road system to be self-sufficient.

        In any case, there is no constitutional mandate that fuel taxes be used exclusively for roads. We need roads, and transit, and other things, and we can decide how to pay for them.

        As of today, we’ve decided to collect less in fuel taxes than it costs to build and maintain roads. Other sources of funds are needed because the fuel tax alone won’t cover it. That’s simply a fact.

      • 0 avatar
        geeber

        We’ve also diverted a significant percentage of the revenues from these taxes to other uses. That cannot be ignored, either. Addressing one issue does not preclude addressing the other.

      • 0 avatar
        Pch101

        We’ve also diverted a significant percentage of the revenues from these taxes to other uses. That cannot be ignored, either

        I didn’t ignore it. I pointed out that it was a flawed argument because (a) there is nothing that says that fuel taxes must be used just for roads and (b) even if they were, the current taxes aren’t high enough to pay for them.

        Again, half of the cost of our roads isn’t covered by the fuel tax. This is just a fact. The belief that fuel taxes cover the cost of roads and then some is just a myth — they don’t.

  • avatar
    DC Bruce

    With all due respect to Ed, his article is a farrago of contradictory ideas.

    Bachman’s statement is easily dismissed for the ignorant foolery that it is: the reason gasoline costs about twice what it did when O’bama took office is entirely due to a rise in the market price of crude oil, something over which the president has limited control. BUT . . . to give the Congresswoman her due, it’s important to remember that crude oil is priced in dollars and both this administration and the Federal Reserve have been doing everything they can do devalue the dollar. If you look at the price of crude, converted from dollars to a market basket of other major currencies, e.g. Yen, Euro, British Pound, etc., you will see that the price has gone up very little during the period. So, a lot of the gasoline price rise that Americans have experienced is due to devaluation of the dollar, not market effects . . . and the President does have some power over that. Secondly, the demand for oil is highly inelastic over the short term, which means that small changes in supply (or demand) produce big changes in price. So, even though, on a percentage basis, opening up areas closed to drilling in the U.S. will have a small effect on supply; it could have a much larger effect on price. And the President, and his party, have something to say about that. Finally, the value of the dollar and the percentage of US petroleum demand that is supplied by domestic sources also have a relationship. Reducing the number of dollars shipped out of the country to buy oil (by increasing domestic supply) will also strengthen the dollar, reducing the market price (in dollars) of the oil that we buy, from whatever source.

    So, Bachman is not as crazy and ignorant is Ed and others here would like to believe.

    Now, the second part of Ed’s farrago: taxes aren’t the market. The reason the Brits or even the Norwegians (who are net oil producers) pay more for gasoline than we do is due entirely to increased taxes their governments impose on the product. In fact, Americans pay closer to a “market price” for gasoline than citizens of these countries. What they pay is a whole lot of taxes.

    Finally, the “externalities” argument for an artificially-inflated price of petroleum is a refuge for scoundrels. What “externalities” are we talking about, and how is the amount of the tax related to the magnitude of the externality? If we are talking about the “externality” associated with the consumption of petroleum (i.e. pollution), people are already paying for that because they pay for the elaborate emission control systems on modern engines. And, if we are talking about the “externality” associated with the environmental impact of petroleum production, where is the morality of saying — as we do — “don’t do that messy drilling in our pristine lands; do it in Russia or Saudi Arabia or Venezuela or one of the dozen other countries that are net petroleum exporters”? Of course, the cost of oil spill clean-ups, double-bottom tankers, cleaning up pollution from refineries, etc. already is built into the cost of the product, since producers incur those costs and pass them on to consumers.

    The truth is that high taxes on motor fuel in Europe and Japan, predate the entire environmental movement. They are an historical artifact of a mercantilist philosophy shared by the governments of those countries after World War 2 which, to the maximum extent possible, tried to avoid imports of any kind. Since those countries had little domestic petroleum production, imports of petroleum were discouraged by taxing motor fuel (and engine displacement) to reduce demand. For similar reasons, these countries erected high tariffs to keep out imported manufactured products as well, including automobiles. The United States, on the other hand, having abundant domestic supply, had no reason to tax petroleum other than as a means of paying for highway construction. So, that’s what was done.

    Of course, today, mercantilism is universally considered a stupid idea that serves only to impoverish the local population which is condemned to buy in the “protected” market. But, in yet another example of the persistence of government — and taxes — a new justification for an old tax has now been invented, to replace the discredited mercantilist justification.

    And, I have to add, that, once a tax is in place, the government always finds a way to spend the revenue from that tax . . . so eliminating the tax is always a problem because the government has to replace the revenue. We can see this today with gasoline taxes. The fact that increased fuel economy reduces the amount of gasoline tax paid (and, in the case of EV, no gasoline tax is paid at all) is now generating talk of imposing a mileage tax on all motor vehicles. But, I would bet more than my lunch money that, if such a mileage tax is imposed, you will not see motor fuel taxes reduced. The new mileage tax will be in addition to the existing motor fuel tax. The argument will be that “we” still want to penalize the owners of vehicles that burn a lot of fuel.

    • 0 avatar
      aristurtle

      Motor fuel taxes are not indexed to inflation and are a fixed amount per gallon rather than a percentage, so they fall naturally over time (in real dollars). It’s been eighteen cents per gallon since 1993, but since the value of eighteen cents has fallen, the Highway Trust Fund is currently cash-negative.

      The USD has risen against CAD, GBP, INR, and EUR since 2008. (Not against JPY but they’ve been in a deflationary spiral for a long time now.) Reports of hyperinflation are greatly exaggerated.

      ANWR’s reserves are not nearly enough to significantly reduce the price of crude. And while gas is pretty inelastic, sudden price drops in the spot price of crude don’t get reflected with sudden price drops in the retail cost of gasoline. It turns out that the world doesn’t perfectly follow the rules that you learned in introductory economics, sorry.

      Ed’s argument looks contradictory at first because he’s arguing from two different directions. From his own point of view, he’s saying that $2/gallon gas might not necessarily be a good thing. From the right-wing point of view, the only way we’re getting gas below $2/gallon is if we subsidize it, which is supposedly bad (although they’ll never admit that about corn for some reason…)

  • avatar
    VanillaDude

    aristurtle

    You have commented 13 times on this.
    You are suffocating us with your opinions.
    We all catch your drift – or have stopped reading you.

    You will not win this argument because no one wants to pay more for the exact same thing in order to pay for exciting new promises made by people who never keep their promises. Their credit rating isn’t AAA. Or even AA+. To the average citizen, the Federal government’s credit rating is zilch. No one believes that they can do anything anymore. Except you. We get it. Thanks.

    • 0 avatar

      +1000, Vanilla.

    • 0 avatar
      Pch101

      -2000. You aren’t the moderator here.

      • 0 avatar
        VanillaDude

        There is nothing wrong with showing a fellow blogger a mirror now and then. On some issues, we can get carried away. He did on this one. I will probably do the same on another. No offense will be taken by me when I do, and when I am reminded similarly. Even by someone who is not the moderator, but a TTAC regular.

    • 0 avatar
      reclusive_in_nature

      I agree with VanillaDude. There should really be a cap on how many times a poster can post or reply on one topic. It’s almost as annoying as people who have to use a cherry-picked link to a website (which no one really clicks on) to prove a point.

      • 0 avatar
        geozinger

        Be careful what you wish for.

        Calling for someone’s (who’s following the rules as established by the blog’s owners) posts to be limited may be used against you someday.

        It seems that at least one of the editors is closely following this subject, and it appears that aristurtle has done nothing to break the rules.

        If you don’t like his posting… ignore it.

      • 0 avatar
        reclusive_in_nature

        I think ALL users need to have the same limit. All the “post until the other guy quits” types are getting old. I could care less if they’re on my side or not.

  • avatar
    reclusive_in_nature

    Let’s see here, canidate that would at least like to do SOMETHING about lowering the price of fuel vs canidates that either don’t care or actually want it higher. Hmmm, what would the average voter choose?

    Also is it that much of a stretch to allow revenue that goes to things most voters don’t really care about (bridges to nowhere, anti-smoking ads, etc.) to go to roads and bridges instead? Is it written in stone somewhere that the only taxation that goes to infrastructure must come from fuel taxes?

    • 0 avatar
      Pch101

      Is it written in stone somewhere that the only taxation that goes to infrastructure must come from fuel taxes?

      Apparently not, as I have shown above that half of the funds used for roads don’t come from fuel taxes.

  • avatar
    eldard

    This bipartisan bickering is getting really ridiculous to us outsiders. Do you really think they aren’t sides of the same coin? Whoever rules your congress, its held by the balls by lobby groups. Like AIPAC.

  • avatar
    Robert.Walter

    Some were nerved by one of the weekly newsprint mags (Newsweek?)recently putting a “crazy-eyes” photo of M.B. on its cover.

    Statements like this, however, don’t do much to help her distance herself from that impression.


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