Many arguments in politics revolve around more than the merits of the issue at hand. Some issues serve as symbols or metaphors for other, broader themes. When an issue grows into a metaphor, it often means that clear and dispassionate thought about it will forever be impossible, lost in ardent rhetoric. The question of oil and gas exploration and drilling in the Artic National Wildlife Reserve (ANWR) may be one such issue.The entire reserve extends over 20 million acres, roughly the land area of South Carolina. The area that is required for oil and gas development is about 2000 acres, roughly the size of Dulles Airport in the suburbs of Washington DC. This is far smaller than a ranch owned by left-wing billionaire Ted Turner.
The well-respected, left-of-center magazine, the New Republic has briefly come over from the Dark Side and recognized the disingenuousness of the fight against drilling in ANWR. In the words of the New Republic editors:
“From the wailing and rending of garments that has followed the House of Representatives vote last week to allow ANWR exploration, you’d think environmentalists had good evidence that drilling for oil and gas would ecologically devastate the…Arctic tundra. They don’t.”
Contrary to visions of dead caribou, decades of experience with oil development on the North Slope of Alaska shows only minor instances of environmental damage. The caribou population has actually increased since oil and gas development began.What the editors of the New Republic did not see was that the vision of the decimation of caribou herds now galloping across the tundra was an image that Democrats in Congress wanted to firmly attach to George Bush. Democrats want George Bush to be depicted at as a callous oil-and-gas-man who would be happy to cover Yellowstone Park in a forest of oil derricks if it would make money for his oil friends. Any correspondence of their charges about ANWR to the truth would only be a happy coincidence. Imagery and symbolism were paramount, careful analysis irrelevant.
The editors of the New Republic instead encouraged Democrats to concentrate on what they consider a far more important issue, the Corporate Average Fuel Economy (CAFE) standards, standard to increase the fuel efficiency of cars. Forget about a tiny area in Alaska, the editors argue. It is more important to apply much stricter fuel economy standards to the dreaded Sport Utility Vehicle (SUV). Presently, SUVs are considered trucks and are not subject to the fuel economy standards applicable to cars.
Now CAFE standards are one of those minor issues that make people feel virtuous about supporting. The feeling of virtuousness is a commodity that is in shorter supply than oil. The standards may on balance be salutary, but they do not reduce fuel consumption and pollution as much as people might wish to believe. As stricter CAFE standards are implemented, new cars become more expensive. This increased cost encourages people to hang onto to their older, more fuel-inefficient and polluting automobiles, with precisely the opposite effect that was intended. In addition, when people do eventually buy fuel-efficient cars, their costs of operation drop and people become more likely to drive farther. They choose, for example, to drive for a family vacation rather than fly. This again circumvents the original intention of the legislation.
Moreover, increased fuel economy is often achieved by reducing vehicle weight. A recent report by the National Academy of Sciences concludes that this weight reduction probably increases the number of injuries to and deaths of drivers and passengers. This puts supporters of increased CAFE standards in the same camp as manufacturers of Firestone tires. Listening to some environmentalists arguing that reducing car size does not impact safety, one gets the eerie, deja vu feeling that environmentalists employ the same spokes-people as tobacco companies.
If reducing fuel consumption and associated pollution is really the goal, then increase the price of gasoline through taxes. The pricing mechanism is the most efficient way to reduce consumption. Of course, this policy would not be popular. A substantial increase in taxes would make explicit the cost of doing with less oil. Taxpayers would be constantly reminded of this cost every time they fill up. Instead, Democrats would rather hide the costs (even at the expense of more fuel consumption) in the price of new cars.
But then again it is the symbolism that is important. CAFE standards can fail to meet their lofty objectives, but the real point is for Democrats to pat themselves on the back in moral self-congratulations about our concern for Mother Earth. God knows that Democrats have recently had far too little to feel morally superior about.
Never Never Land
Sunday, August 26th, 2001It often seems that one should look over one’s shoulder in Washington, DC and search for Tinkerbell. Politicians seem to exist in Never Never Land, where little boys always play games and never grow up. At this moment, the economy is limping along at low growth levels while Democrats and Republicans argue about how to keep federal surpluses at historic highs. The total debt is rapidly decreasing, deflating the economy so much that successive cuts in the Federal Reserve rate have not yet restored robust economic growth.What few people realize is that even if the annual federal deficit is nominally zero and the total federal debt does not increase in a particular year, inflation and growth conspire to reduce real debt load. A zero deficit is deflationary and a modest deficit can be neutral.
During the late 1970s, inflation was so high that real debt was rapidly decreasing the debt load even while the country ran a nominally high yearly deficit. That explains how during the Carter-years we experienced a large nominal deficit with a sluggish economy suffering high unemployment. The lowest federal debt load in the post World War II era occurred in 1979, at a time when inflation was over 11 percent. Presently, total federal debt load is rapidly decreasing and we should take care in imposing substantially more deflationary pressure on the economy. Even we if had no growth, inflation would convert a surplus into a two to three percent decrease in the real debt load.
A Conservative wit once remarked that America has two parties the “stupid” party (Republicans) and the “evil’ party (Democrats). Apparently when both Republicans and Democrats agree on something, the policy is likely to be both stupid and evil. Thus in February of this year, Congress passed the Social Security and Medicare Lock-Box Act of 2001 by a bi-partisan vote of 407-2.
Of course the lock box is a fiction. Excess funds received from Social Security can do three possible things. They can fund more current spending, allow for tax reductions, or reduce the total federal debt. Republicans, for their part, hope that the budget discipline imposed by keeping the federal total surplus greater than or equal to the Social Security and Medicare surplus will prevent Democrats from increasing spending. Democrats, by contrast, expect to use the tool of the lock box to restrain Republicans from their congenital urges to return money back to taxpayers.
Unfortunately, the argument between Republicans and Democrats about the size of the surplus will mask the real issue: How do we restore the economy to economic growth? We should return from our trip to Never Never Land. Democrats should make their best case for more spending increases even if the lock box idea is jettisoned. Republicans should urge even larger tax reductions, perhaps even reductions in the Social Security and Medicare taxes, despite decreasing nominal surpluses.
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