As you may have noticed,
gasoline costs more than of yore. Some basic economics: Gasoline is
a manufactured good. Its price depends in part on the price of its
basic commodity, in this case crude oil. It costs more than of
yore, as does natural gas.
More basic economics: The
price of crude oil and natural gas is high because the demand for
it has risen sharply, while the supply (remember these italicized
terms; they will be on the exam) has barely been inching up,
perhaps because so much of the stuff that’s easy to pump has been
pumped.
In a market economy, when demand goes up faster
than supply, the price rises. Despite public grumbling, this is
good; it’s the way the system is supposed to work because high
prices create an incentive for more production, thereby increasing
the supply, thereby bringing down the price, until a new
equilibrium is reached.
The above-described market
economy is also known as free enterprise, or, more baldly,
capitalism. Though political liberals approve of it, or they would
not be liberals, but socialists — quite a different category
— conservatives really dig it.
These conservatives
— as they call themselves — are in charge these days.
So they could and did create an energy policy. Lucky them. The
system was working according to their ideology. High prices were
creating incentives for oil and gas firms to increase supply. The
government didn’t have to do much of anything, which is just what
conservatives love, though it did speed up oil and gas exploration
on public lands.
Nonetheless, it cut the taxes of the oil
and gas companies by several billion dollars. Then it cut the taxes
of coal and nuclear power companies that were also doing well,
because the price of one fuel influences the price of others.
The stated reason for these tax reductions was to provide
an incentive for the companies to produce more. But… I hear
you sputtering, according to the rules of capitalist economies,
didn’t those high prices already provide ample incentive to produce
more? So why — you may still be sputtering here — also
cut their taxes and exacerbate the federal budget deficit, which
conservatives are supposed to hate?
You pass the course.
You have figured out the truth about the Energy Bill about to
become law. (It is short of final Senate passage as of this
writing, but its tax provisions were essentially set in the Budget
Bill, which has passed). The ideology behind it is not
conservatism.
A conservative energy policy would be
market-oriented. Yes, this might include using tax breaks to create
incentives not already provided by the market — for wind and
solar power, for instance, or for getting folks to use less energy.
Such tax incentives are in the bill. About $400 million
worth over the 10-year period of the legislation. But that pales
beside the $7.6 billion in incentives for producers that did not
need them.
So, if not conservatism, what ought one call
the ideology underlying this strange bill? The standard liberal
answer is that it is no ideology at all, more a legal corruption in
which Republican politicians reward their friends and contributors.
There is some evidence to support this contention. One of
the last decisions the House of Representatives made on the bill
was to keep a provision protecting the makers of a gasoline
additive called MTBE from lawsuits, even though MTBE has polluted
drinking water in 29 states. And, wouldn’t you know, the companies
that make the stuff have given more than a million bucks to
Republican candidates.
But there is no evidence that
Republicans are more beholden to their big contributors than
Democrats. What seems more likely is that the new breed of
conservatives believes in the right of certain people — their
rich and powerful friends — to be immune from the
restrictions mere mortals face. Rather than have these folks break
the law, the politicians change the laws so that what was once
criminal or actionable becomes legal and proper.
None
dare call it kleptocracy. But unlike the Russian version, American
kleptocracy stems not from venality but from ideology, a sort of
neo-Nietzschean and anti-egalitarianism holding that the successful
are superior; therefore, they deserve special privileges.
Besides, like everyone else, the new conservatives, having defeated
their opponents, enjoy kicking them when they’re down. The fervor
for drilling in the Arctic National Wildlife Refuge, even though
the oil industry isn’t convinced there’s much goop down there,
stems at least in part from the joy of humiliating the other guys.
Jon Margolis is a contributor to Writers on the
Range, a service of High Country News (hcn.org).
A veteran political reporter, he writes about Washington, D.C.,
from Barton, Vermont.
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