Sunday, December 05, 2004

21st Century fuel -- since W won't lead, Blue America must

Oil is behind much of our foreign policy mess.

High oil prices are bad for the world, because the oil-producing nations stay bad. Low oil prices are good for the world, because the oil-producing nations get better.

Thomas Friedman's column in the New York Times today lays out the case here.

This is the best part:

When did the Soviet Union collapse? When did reform take off in Iran? When did the Oslo peace process begin? When did economic reform become a hot topic in the Arab world? In the late 1980's and early 1990's. And what was also happening then? Oil prices were collapsing.

In November 1985, oil was $30 a barrel, recalled the noted oil economist Philip Verleger. By July of 1986, oil had fallen to $10 a barrel, and it did not climb back to $20 until April 1989. "Everyone thinks Ronald Reagan brought down the Soviets," said Mr. Verleger. "That is wrong. It was the collapse of their oil rents." It's no accident that the 1990's was the decade of falling oil prices and falling walls.

If President Bush made energy independence his moon shot, he would dry up revenue for terrorism; force Iran, Russia, Venezuela and Saudi Arabia to take the path of reform - which they will never do with $45-a-barrel oil - strengthen the dollar; and improve his own standing in Europe, by doing something huge to reduce global warming.

[snip]

Or, Mr. Bush can ignore this challenge and spend the next four years in an utterly futile effort to persuade Russia to be restrained, Saudi Arabia to be moderate, Iran to be cautious and Europe to be nice.

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He's right on the effect of oil, but when Friedman moves from policy to politics, he misses the boat again.

He's asking W to launch an alternative energy program. That's delusional. If we're going to bring down the price of oil, Red America isn't going to do it -- Blue America is going to have to lead. And that means state and local gas taxes to finance alternative energy, like ethanol or biodiesel.

3 comments:

FightforJustice said...

I hope Dan doesn't expect higher gas taxes in Illinois. The Chicago area already suffers from one of the highest tax burdens on gasoline in the country. We even charge a sales tax on the excise taxes! I don't think the Land of Lincoln, blue state tho it is, will be leading the way on this one.

Anonymous said...

Dan,

Two thoughts -

I think, right now, China's world-wide demand for oil dwarfs ours, and thus has a much-larger impact on oil prices.

If high oil prices are such a boogeyman, why won't libs let us drill in ANWAR?

Thanks,
Gordy

Dan Johnson-Weinberger said...

We should suffer from a high gasoline tax burden, so we use less of it. Crank up the gas tax! I'd rather keep that money here than send it off to the Saudi royal family. On China: I don't know. Anyone want to look that up to see whether China or the US has a bigger oil demand? But even if that's true, if we really develop renewable fuels to get cost-competitive with oil, then China could use those renewable fuels as well. It's not like China particularly wants to use oil (or any other energy user). They just want the cheapest thing they can get. If other energy sources flood the global market because we develop them in the US, then the price of oil will fall, and reform around the world will kick in again. Support the President's War on Terror! Tax oil!