Tuesday, September 4, 2007

Presidential Energy Records, Part III

So, first of all, from reading the actual record it's apparent that the big issue is OIL. Also, there is a real dialectic between the parties on this topic: Republicans want to solve the energy issue by expanding production of oil and gas, whereas Democrats favor policies that curtail consomption. So by now you may be wondering, "As an 'expert' economist who do you think is right?" Well, I'm a two handed economist-- On the one hand they're both right, and on the other hand they're both wrong. Both stategies will help extend our ability to fuel our cars and heat and cool our homes in the short to medium run. Yet, both strategies are very costly, and neither strategy promises to be very effective in the long run.

Expanding production is problematic because many of the policies involve huge subsidies to corporations. Also, it is myopic because there oil reserves are relatively fixed, and sustaining current energy consumption may not be environmentally sustainable. Yes, Virginia, there is Global Warming.

Curtailing consumption is equally problematic because these policies also involve high costs, although the costs are somewhat more disguised. Regulations, like CAFE standards will serve to raise the prices of certain big-ticket goods, and may place undue burden on households and firms. Secondly, they may not serve their intended purpose, because markets are notoriously good at subverting rigid regulations governing quantity or price.

What is particularly frustrating looking at these positions is that there is an abysmally thin record on alternative energy- one vote here on biofuels and one on hydrogen cars there, and probably a bunch of blind "yeas" for ethanol to "support hard-workin' American farmers" and that's all. Realistically, since oil is what we actually use, finding ways to manage that resource is something we must do, but what will it take to start a real Political debate over energy alternatives that will be sustainable and compatible with a cleaner environment?

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