Friday, September 5, 2008

Bid Baby Bid

There's a lot of baloney out there about drilling. One group of dolts wants you to think it should be done at all costs because it will "crah-ate jawbs fir hurd-wurkin Amuhricans" and "rah-doos ahr dahpendens on furrin awl." Silliness. The other thinks it's being clever by pointing out that "drilling in these areas will harm the environment" and "have virtually no impact on prices." Highbrow silliness.

As Free Exchange and Tyler Cowen point out, the reason that drilling might be useful is that it generates a whole lotta money, and these fiduciary benefits may simply dwarf the costs - cost benefit, plain and simple. But really, they're missing the point too!

Drill baby drill is a silly oversimplification of what should be done. The government OWNS that land, and shouldn't simply write over the mineral rights to it to the oil companies; these rights should be sold, preferably by auction, and preferable for at least a couple hundred billion dollars (based on reserve estimates). That way, the excess benefits that can be anticipated can be captured, and redistributed towards environmental restoration, transfers, and debt reduction.

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