Gov. Chris Gregoire has another post up on Daily Kos: “Republicans refuse to take on climate change.”
Another Republican failure of leadership on renewable energy and climate change happened yesterday in the U.S. Senate. The “drill first and ask questions later” policy of Big Oil and Republicans has not served citizens paying at the pump and won’t in the future. We need to think bigger. What’s wrong with investing some of those wind-fall profits into renewable energy? Energy independence and a cleaner environment sound like things we should be trying to achieve.
[…]
My Republican opponent’s environmental record shows his commitment to fighting climate change is simply political lip service. John McCain came to our state touting the need to fight global warming, but George Bush Republicans like my opponent and those in the U.S. Senate killed the climate change bill and killed a bill today to make Big Oil invest in renewable energy.
While fighting climate change should be a nonpartisan issue, Republicans in Washington have shown us that if we really want to fight climate change, we need to elect Democrats in November.
We are a nation of innovators, and we are in a crisis. I am confident that with a Democratic partner in the other Washington, we can work together to develop the next generation of clean technology and put policies in place that will move us to a greener tomorrow.
Gov. Gregoire makes a blunt point that too many in our media refuse to acknowledge: in the current political climate, if you care about climate change, if you care about the environment, then you can’t trust the Republicans to get the job done. On this, as on many other progressive issues, and with few exceptions, the most important thing you need to know about a candidate is the little “D” or “R” next to their name on the ballot. (You know, except here in WA where our bullshit top-two primary doesn’t even give voters that important piece of information.)
Help Gov. Gregoire get her message out to a wider audience, and recommend her post on Daily Kos.
According to news reports, the U.S. Energy Department predicted today that gas prices will stay above $4 through 2009.
“Many analysts believe the dollar’s protracted decline is the primary reason oil prices have doubled over the past year,” the Associated Press says.
The Bush administration and its Fed appointee, Ben Bernanke, have pursued fiscal policies that deeply debase the American dollar. These include borrowing instead of raising taxes to finance the Iraq war, and lowering interest rates while the dollar is falling to prop up an anemic economy.
We are actually in a recession, but it’s an election year, so Bernanke is keeping economic activity artificially high by pumping more cheap credit into an already undermined financial system. In the long run, these policies will cost us more — more unemployment, more inflation, more dollar devaluation, higher oil prices. Borrowing on top of borrowing, to keep economic growth on artificial life support, while the economy’s vital organs rot from within. That’s what’s going on right this moment.
Next stop: $5 gas and double-digit inflation.
If we think gas prices are high now. Just wait until a “windfall profit tax” is imposed….
Who do think will pay for that extra taxation? The oil companies? Wrong…..That will pass thru straight to the consumer….
So hang on to your wallet, the Democrats are in charge…..
@ 2: Mr. Stuff. A windfall profit tax takes away ‘windfall profits’. There is no advantage to raising the price. The only way for them to make more money is to lower the price and sell more gas.
If this doesn’t work, we’ll try government fiat price controls. If that doesn’t work, we’ll nationalize their industry.
Truman made a monopoly out of big oil for national security reasons. What Truman did can be undone.
re 2: In short: Go to hell.
The GOP thinks that if they deny climate change it doesn’t exist.
35 Impeachment Articles against GWB.
2 RS
Yeah, those Republicans sure did a great job of keeping the oil companies in check and prices low, didn’t they?
After Katrina, when oil prices went sky-high (gas was almost THREE DOLLARS PER GALLON!), our local wingnut trolls all predicted low prices would return. But they didn’t. Imagine that. Then they rose again. Then they rose again. Demand is dropping rapidly, but prices keep rising (proof, BTW, that increasing supply is not the answer).
Hurricane Katrina devastates the South, and the federal government offers nearly no response. Oil prices rise. We invade Iraq. Oil prices rise. We rattle our sabers at Iran. Oil prices rise. We threaten Venzuela and try to engineer a coup. Oil prices rise. The dollar drops in value. Oil prices rise.
What has the Bush administration ever done to reduce oil prices? Hint: *Crickets*
RS @ 2: How many times do the basics of supply and demand have to be explained to you? For a Republican, you sure don’t seem to understand Adam Smith. Have you even read “The Wealth of Nations”???
As Roger has (rather patiently) tried to explain many times before, a seller will sell a product for the highest price he can get for it. It doesn’t matter what his cost, of whether he is taxed on his profits – he will still sell for the highest price he can get.
So if an oil company can get $5.00 per gallon for it’s product, it doesn’t matter whether there is a tax per gallon (federal or state highway tax), or a tax on profits (windfall profit tax). The price will still be $5.00 per gallon. The only thing which keeps it from getting higher is that other oil companies might be tempted to charge less (hoping to make up in volumn squeezed from their competitor), or the consumer just “opts out” of the purchase because the consumer feels it is too costly.
The place where taxes DO affect the price is when the supplier’s cost approaches equilibrium with the retail price. In other words, if the tax makes a difference between making a profit or not making a profit, then the seller may decide to “opt out” himself from the market.
But current market conditions show that given the huge disparity between supply costs and the retail price at the pump, and the rather incredible profits being made by the oil companies, we are NOWHERE NEAR that point. And a Windfall Profits Tax, by definition, never goes into affect at any point where it would have that effect.
Of course, there is a chance that the oil companies might try to “punish” the Democrats by raising oil prices just as Obama gets into office. That’s not economics, that’s a company
But do you really think we ought to hold our economy hostage to blackmail? I kinda doubt that “the Duke” would think that’s the American way….
@8
Yes I understand supply and demand.
We are told that we don’t have enough supply, yet do nothing to increase our supply, particularly with our own unexploited resources.
When the government steps in and takes $$$ from a company, the result is higher cost to the consumer, becuase the company passes on those costs (taxes) to the consumer.
If government steps in and taxes(takes) money away from the oil companies, are they just going roll over and say, “ok, uncle, I give”?
No, they’ll make it up somewhere else….where is that somewhere else? your wallet, my wallet, all consumers of petroleum products wallets….
9 rhp
That kind of thinking might also lead to a conclusion that oil companies are trying to “punish” Republicans right now.
10 RS
We would widen the gap between supply and demand though conservation and mass transit both more and faster than by trying to ramp up supply from our own meager resources. How about over the next ten years we drive our oil usage DOWN instead of UP? How much does that save? Isn’t reducing demand an effective way to lower prices? Answer: yes.
10 RS
I think all you understand is supply, supply, supply.
Um, no. We are being told that supply has remained flat instead of rising.
Drop in the bucket, man. Max 5% of CURRENT usage over twenty years, starting ten years from now.
If you “understand supply and demand,” then you understand that reducing demand lowers prices. Efficiency. Alternatives. Changing policy incentives. Changing transportation patterns. Mass transit. Education.
BTW, RR doesn’t think we’re at peak oil, biut I think we already passed it. And if we have, the continual answer “increase supply!” just won’t cut it. Unless you don’t care WHAT you pay for it.
Let the “invisible hand”, “free markets”, “supply-side economics”, “trickle-down theory” work!
For some time now, I’ve been scratching my head over how the price of diesel has been rising even faster than the price of gasoline. I’m sure some apologist for the petroleum industry could offer up some arcane explanation based on refinery chemistry, climate variability or the price of man-in-the-moon marigolds, but somehow I have this nagging thought that it might have something to do with putting the squeeze on bus and rail transit systems, to force them to raise their fares and encourage people to keep driving.
Art @ 15: I think you may be on to something. Diesel is easier and cheaper to refine than gas, so it is certainly not cost-related. Since diesel is mostly used by fleet vehicles or truckers who are watching their prices pretty carefully, it has traditionally been very resistent to price hikes. If diesel gets above a certain level, the truckers will just park their rigs – no reason to spend three days driving cross-country just to lose money on the trip. That’s why diesel prices usually FOLLOW a general increase in gasoline prices.
But this time they raised the diesel prices first. Curious.
Democrats in charge…Highest gas prices in history, but hey the war was for oil; economy in the shitter, out of control spending, and a camera on every corner.
Frost bite victims in June, colder than Siberia, coldest June in history…goddam global warming.
Vote Al Gore President, Greg Nickels VP
Dumbfucks
There is no such thing as Global Warming. PuddyPrick told me so.
@17 A true commie-fascist Republican never accepts responsibility for anything.
Okay RS @ 10, you still aren’t getting it. You ASSUME that a business will always pass a tax increase along to the consumer, and therefore the consumer ends up paying the tax in the long run. That is true some of the time, but not all of the time.
This is an example of when it is not true: when you have a wide discrepency between the seller’s costs and retail prices, just as we currently have in the retail gas market. Even though the cost of crude oil keeps going up, it is not going up nearly as fast as the retail price of gasoline. The difference shows up in some enormous profits made by the oil companies.
Let’s put it another way, using a real-life example. I’ve got a small internet-based business. I sell products at $19.95 a pop. I’ve tested the market, and I’ve found that $19.95 is the price point where I make the most money. If I raise it to $24.95, sales drop off enough that I actually make less money. If I lower the price to $14.99, I make a few more sales, but not enough to make up for the lost revenue on the items which would have sold at $19.95 anyway. So I keep my price at $19.95 (plus shipping & handling).
My costs when I started the business were about $5.00 per item, including web hosting and advertising. So I made almost $15.00 per item. Since then, inflation has doubled costs generally, but I’ve also found ways to cut back in other areas, so my price has only increased to about $8.00 per item. Should I pass that $3.00 per item price increase along to the customer? No, of course not. If I did that I would push past my optimum price point, and I would actually make less money.
Now, suppose I suddenly find myself subject to the Alternative Minimum Tax. Suppose I find myself having to pay an additional $5.00 in taxes for each $12.00 in profit I make off each item. Do I tack on the $5.00 to the price of the item??? No, of course not. Again, that would push it past the optimum price-point which my customers are willing to pay. I would actually make LESS money if I did that, and it wouldn’t solve my tax problems any.
So that’s why imposing a windfall profit tax wont’ result in higher prices to the consumer. Or to put it another way, why FAILING to impose a windfall profits tax won’t result in a drop in the price of gasoline.
Now, if the situation were different, then it might have an impact. I don’t have much competition for my product, in part because it is a pretty small market. Also, the purchase of the items is entirely discretionary on the part of the consumer – they can choose to buy it or not, their life won’t be seriously impacted either way. But if I did have competition, and we started to engage in a price war, then the price would drop down to close to the costs. If one of us tried to bring it down below the cost floor, then the one of us with the most persistence and economic staying power would survive, and the other would go out of business. If we both settled on a price which gave us a modest profit, then we could both stay in business which would split the market between us.
In the latter case, imposing a tax might actually result in a price rise to the consumer. If the tax raised the costs above the selling price I and my competitor had settled upon, then we would have to raise the price or go out of business. With each of us knowing this, then we would probably both raise the prices, while keeping an eye on the other. The point there is that the higher “cost floor” forces us to select a different price point.
If you were to graph it out, you would have a bell-shaped curve showing the optimal price point for selling the product based upon customer demand, and a flat vertical line showing costs. If the cost line passes to the right of the high point in the curve of the optimal price point, then both of us would also have to move our prices to the right of the optimal price point, even though it results in fewer sales and less income overall.
But as I said before, a Windfall Profits Tax doesn’t apply in such a situation, by definition. It only comes into effect when their is a wide disparity between seller cost and the retail price. In that case, it does no good to pass the tax along to the consumer, because doing so would result in lower income overall. The seller is better off absorbing the tax.
Would a higher supply help lower the prices eventually? Sure. But refusing to enact a Windfall Profits Tax doesn’t affect supply at all, especially in the short term. If the oil companies could make more money by increasing supply, with gas at $4.00 + per gallon, and profits at 3X the cost of production, don’t you think that they would be doing so??? If they aren’t doing so now, why do you think they would be LESS inclined to do so if the Windfall Profits Tax resulted in profits at only 2.5 times the cost of production?
If you want to use tax policy or subsidies to encourage production, you need to be a lot more focused in how you do that, rather than just contributing to the oil companie’s bottom line. Otherwise you end up with the oil companies sitting back and saying “I don’t feel the love yet, I think I’ll put off doing any research/exploration/production today”, while the consumer/taxpayer keeps throwing hundred-dollar bills at their feet, hoping that they get to the point where the oil companies feel sufficiently motivated to do something they aren’t otherwise compelled to do.
(Phew – long post!)
15, 16
We are using low sulfur diesel fuel now which is more expensive.
Diesel = kerosene = jet fuel = fuel oil. Essentially the same stuff. Big world market for it. Lots of folks want it.
@20
Thanks for the long post.
@17: Dear reality check – please check any reality!
The rest of the country is in a heat wave.
The idiot republicans have been in charge of congress and the Presidency for six years – six years of record budget deficits, the worst trade deficits in history, rampant bad loans due to not enough regulation (that the republicans prevented) and record oil prices (from the same republicans who promised 20 dollars/barrel if we invaded Iraq).
Nice blame shifting – the republicans have almost sole responsibility and the President and the republicans blocked the windfall profits tax and the legislation to prevent speculation on oil futures.
Just for your information – according to our constitution (as a republican you probably can’t read it or fail to respect it) two thirds of the house and senate are required to overide a veto – so the democrats are not in charge of anything until they have a two thirds majority or more in both houses. So much for your specious argument.
Goldy, per your request, I blogged about Gregoire’s blog post.
But I could not resist pointing out that if you search her campaign website for (bus OR rail OR bicycle OR pedestrian OR transit) you get two relevant hits. If you search for (highway OR road OR lane OR car) you get 549 hits.
There’s a reason why Gov. Gregoire was just endorsed by the Washington Asphalt Pavement Association.
She’s better than Rossi, but that’s not saying much. She’s still living in the 1950s when it comes to transportation planning. To be perfectly frank, it feels like the only reason she talks about global warming is to get the votes of environmentalists who aren’t paying attention.
FACT: Global temperatures DECLINED from 2005 to 2006 by OVER a degree F.
FACT: They did the same from 2006 to 2007.
FACT: BOTH the Artic and Antarctic Ice Mass(es) are LARGER THAN THEY’VE EVER BEEN.
FACT: There is NO such thing as anthropomorphic global warming.
FACT: The rest of the country is NOT having a heat wave. Only the East Coast. The Pacific, the Mountain, and the Central Time zones are ALL experiencing record cold.
FACT: Tornadoes are caused by MASSIVE cold air blasts being introduced to tepid or warm air. The Midwest is experiencing RECORD numbers of tornadoes.
FACT: Since the democrat party took control of Congress in Jan 2007, gas prices have DOUBLED!
Whatta buncha liberal dumb@sses!
Correctnotright…or King of the dipshits,
Democrats are running the nanny state called seattle, Democrats are running the piece of shit government called King County, and Democrats are in control of the fucked up State of Washington.
Democrats are the greatest threat to free speech, the free market, and any thing else that encompasses free thought. You are a bunch or holier than thou control freaks who react out of emotion with do nothing policies and mass hysteria. That is the reality you witless lemming.