More Larger Lessons From The Gas Tax Pander

by hilzoy

A few days ago, publius wrote about some of them. I just want to expand on one of his points.

The gas tax holiday is bad policy. Clinton has to know this. If she does, then she has come out in favor of it for purely political reasons: because she thinks it will give her an edge over Obama. (Note: this is the charitable reading of her conduct. I assume she's much too smart to actually believe that this is a good idea.)

Moreover, this didn't have to be an issue in the Democratic primary. It's not as though it was already on the table and had to be discussed. Clinton made it an issue, and is running on it. Which is to say: she has not only come out in favor of a bad idea for political reasons; she has introduced a bad idea into the Democratic primary, and she is running on her willingness to embrace it.

Clinton is presently making a big deal about the fact that she is "a fighter". After this primary season, I don't think there can be any doubt about her willingness to fight. What Clinton's gas tax proposal tells me is what she's willing to fight for. She is not willing to fight for what she thinks is right in the face of public pressure. She's not even willing to restrict her compromises to cases in which public pressure to do something stupid already exists. She will sacrifice principle and the public good when it's expedient for her to do so.

Which is to say: she's a fighter, all right, but what she fights for is her own interest, not what she thinks is right.

Based on this episode, how much confidence can we have that she'll really be wiling to go to the mat to combat global warming? None at all. Based on her vote for the Iraq War Resolution -- a vote that was, at the time, seen (wrongly) as one that Democrats had to cast if they wanted to secure their own political viability -- how much confidence can we have that she'll be willing to go to the mat to protect our national interests or to prevent a pointless, stupid, destructive war? Likewise, none at all.

If there's anything we should have learned from George W. Bush, it's that generalized combativeness is not a good thing in a President. We need not just someone who's willing to fight in general, but someone who's willing to fight for the right things. If you think that the right things just are the things that advance Hillary Clinton's political interests, then there's no problem. But if you want someone who is willing to fight for good policies that are in our national interest, that actually address serious problems, then it's worth recognizing that while she is more than willing to fight, she is not willing to fight for that.

***

One other note:

Something about the gas tax holiday seems to make its supporters cut any ties their campaign rhetoric might have had with reality. Here's McCain:

"In Iowa, sounding more exasperated as the day went on, Mr. McCain grimaced slightly when a questioner at a town-hall-style meeting asked him about the plan.

“You’d think that I was attacking Western civilization as we know it,” Mr. McCain replied. “The special interests, ‘Oh, my God. This will destroy our transportation system in America. This will have disastrous consequences.’ Look, all I think is we ought to give low-income Americans, in particular, a little relief.”

Mr. McCain did not say which special interests he meant."

I assume that there are two reasons why McCain won't say which special interests he's talking about. First, opposition to the gas tax is not led by "special interests", but by people like economists, policy analysts, and politicians who are not running for President. Second, to my knowledge, no one is saying that the gas tax would have disastrous consequences, or destroy the transportation system. They are saying that it's a political pander that would cut revenues without delivering any meaningful benefits to taxpayers. (Real "special interests", like the oil companies, are of course another story.)

Or, in short: McCain is not taking on "special interests" by proposing a gas tax holiday.

Here's Clinton:

"At an event in Jeffersonville, Ind., on Thursday evening, Mrs. Clinton amplified her frequent pledge to introduce legislation to suspend the gas tax, saying she wanted to put members of Congress on the spot on the issue.

“Do they stand with hard-pressed Americans who are trying to pay their gas bills at the gas station or do they once again stand with the big oil companies?” Mrs. Clinton, of New York, said. “That’s a vote I’m going to try to get, because I want to know where they stand, and I want them to tell us — are they with us or against us?”"

Let's pretend, for the moment, that we don't know that a gas tax holiday would simply shift revenues from the government to the oil companies, revenue that Clinton's windfall profit tax would then take back again. I'd like to know in what possible world resisting a gas tax holiday could possibly count as "standing with the oil companies". Even if a gas tax holiday meant that the price of gas would actually go down, that would presumably help the oil companies by boosting demand for oil. It wouldn't help them as much as it would in the actual world, in which the oil companies stand to pocket most of the money the government be giving up, but it would still be a net positive for them.

Does anyone think that cutting cigarette taxes would count as "taking on big tobacco"? Of course not. So why would cutting gasoline taxes count as "taking on big oil"? If anyone is "standing with big oil" at the moment, it's Clinton and McCain.

The relationship between campaign rhetoric and reality is normally pretty loose. But in this case, Clinton and McCain's rhetoric seems to have divorced itself from reality entirely. It's as though old campaign cliches -- taking on big oil, standing up to special interests -- are now just free-floating phrases that can attach themselves to anything and everything. I expect this from George "Clear Skies Initiative" Bush, and from John "I have no clue what I'm talking about" McCain. Call me naive, but while I did expect Clinton to spin things to her advantage, I didn't expect her rhetoric to have no relation to reality whatsoever. Apparently, I was wrong.

Comments

[janinsanfran]

Yes--she seems over the top on this. Further, she has only one real claim on the office she is seeking: that she has, historically, had a demonstrably good grasp on the actual policy needs of the country. So with this pander, she has chosen to throw away the one set of bona fides she had. This is hard to fathom.

The only possible premise on which this makes sense is that the US electorate is hopelessly moronic and that elections are simply a necessary form of theater for the ignorant proles. Perhaps Clinton really does believe this -- it is what this madness implies. So she's giving good theater.

[neil]

Maybe this is just my highly-educated, out-of-touch side speaking, but this episode seems like the most tooth-grindingly elitist thing that's come out of the whole campaign so far. Clinton is making promises that she surely knows she can never keep, but she thinks it's safe because she thinks the intended audience is too dumb to realize that. When challenged on the merits of her position she questions the motives of the people advocating for the correct policy. Meanwhile, her economically enlightened supporters are keeping quiet, or defending her, on the grounds that the lie is good since it will trick the rubes into voting the right way, even if it is for the wrong reason.

This is what disgusts me most about American politics. I haven't gone in for the talk of not supporting Clinton until now, but this one goes too far for me.

"I'm not going to put my lot in with economists," she said on the "This Week" town hall. Clinton added that the tax holiday would work "if we actually did it right."

More broadly, she repeatedly attacked elite opinion, citing "a tremendous amount of government power and elite opinion behind ... policies that haven't worked for the middle class."

I can't support a Democratic party with leaders like this. I'm spitting mad now at the progressives who've spent the last months defending Hillary's excellent grasp of policy. If you're educating people to reject good policy, then how are you supposed to implement it?

[Jake]

The key point, in my opinion, is that Clinton must really believe she needs to do this to win votes. So, when backed against the wall, she's making the politically convenient choice instead of the principled one.

It is the AUMF vote, on a much smaller scale. I simply have a hard time believing we wouldn't get more of this with her in the Oval Office.

[Bernard Yomtov]

Even if a gas tax holiday meant that the price of gas would actually go down, that would presumably help the oil companies by boosting demand for oil.

I strongly agree with your post, but if I may be academic, this is not quite accurate. The demand curve itself would not move. If refineries were not at capacity the tax reduction would move the supply curve (as a function of pump price) to the right, resulting in more gas sold at a lower price. The oil companies would benefit because they would sell more and they would get to keep more money per gallon, since the price would drop by less than the tax cut.

This seems like a quibble, probably, but it's important to be clear about these basic mechanisms. Otherwise it's easy to make simple mistakes, like thinking the tax cut will be fully reflected in consumer prices regardless of supply considerations.

[rec]

I'm really a rube when it comes to economics, but I'm trying to wrap my head around these supply/demand curve arguments.

I keep seeing the argument that since the refineries are operating at peek capacity the demand curve would not move thus prices would not drop. But how does that explain the dramatic rise in prices in the past few years? Was there different capacity a year ago than today?

I understand the crude oil price spiked. But if you're looking at it from a supply/demand angle and if the market could sustain the same amount of demand with prices going this high, why didn't the prices go up sooner? Clearly the demand is there.

(I'm sure my use of terminology is way off, but I hope my question is clear).

[Morat20]

I keep seeing the argument that since the refineries are operating at peek capacity the demand curve would not move thus prices would not drop. But how does that explain the dramatic rise in prices in the past few years? Was there different capacity a year ago than today?

Actually, yes. :) Gasoline refiners -- at least here -- retool in the spring, because summer they use a different gasoline blend that's more expensive (and somewhat less polluting) because demand traditionally spikes in summer.

The spike is a combination of higher crude and the beginnings of the reformulation process for summer. Mostly higher crude. Demand in the US has more or less stabilized at 3.50ish, and I suspect will start to trend down somehwat as SUV's slowly get replaced with gas-sippers. (The immediate response has been 'drive less' and 'carpool when possible'.) However, I suspect that 3+ a gallon gas is here to stay.

[Bernard Yomtov]

But how does that explain the dramatic rise in prices in the past few years? Was there different capacity a year ago than today?

Peak capacity does not keep the demand curve from moving . It keeps the supply curve from moving (to the right - supply increasing) because the oil companies can't produce any more than they already are. Supply could decrease, raising prices further, if for example oil fields were destroyed.

I don't know how capacity has changed lately, but the price rise is due at least in part to increased demand from China and India, and no doubt other things as well. The decline of the dollar has surely had an effect also. Remember we are bidding in a world market. If it takes $1.50 to equal a euro we're going to pay more for gas than if it takes $1.25.

[hilzoy]

Bernard: "The demand curve itself would not move. If refineries were not at capacity the tax reduction would move the supply curve (as a function of pump price) to the right, resulting in more gas sold at a lower price. The oil companies would benefit because they would sell more and they would get to keep more money per gallon, since the price would drop by less than the tax cut."

Yes, I agree completely. I was getting entangled in my hypotheticals: even if we assume that this won't just shift money from the government to the oil companies....

In that hypothetical world, presumably the price actually drops, which could only happen if more oil was available. I meant it as a sort of binary: either the oil companies are helped out by being able to keep prices where they are w/o paying any part of the money they earn to the government, or not, in which case they are helped by being able to sell more oil. (I suppose I was leaving out the possibility that the oil companies just keep prices lower out of the goodness of their hearts, and shortages ensue.) So either way, this cannot possibly be described as "taking on big oil".

But yes, it came out muddled. Thanks. ;)

[felix culpa]

Um, hilzoy—
cases in which pubic pressure to do something stupid
Are you sure?

[hilzoy]

felix: ack! thanks. Changed.

[southpaw]

Clinton:

Sen. Hillary Clinton, D-N.Y., declined this morning to name a single economist who backs her call for a gas tax suspension.

"I'm not going to put my lot in with economists," Clinton said in an exclusive appearance on a special edition of "This Week" from Indianapolis.

There seems to be an impulse there to exceed even the Republicans in appealing to know-nothing sentiments. Aside from being unwise, I don't think that strategy is sustainable through the fall. I mean, is she going to take Grover's pledge?

[FlyOnTneWall]

Hillary Clinton on solving the Housing Crisis - Trust the Experts:

We simply cannot wait until Congress passes legislation to find the best way to help millions of families. That’s why I’m proposing an Emergency Working Group on Foreclosures. It could be led by a distinguished, non-partisan group of economic leaders like Alan Greenspan, Robert Rubin, Paul Volcker. It’s the kind of proactive step that would help re-establish confidence in our economy by showing that the President and the Administration was taking our economic crisis seriously.

Hillary Clinton on solving fuel prices - Don't Trust the Experts:

I'm not going to put my lot in with economists because I know if we did it right, if we actually did it right, if we had a president who used all the tools of his presidency, we would decide it in such a way that it would be implemented effectively...elite opinion is always on the side of doing things that really disadvantage the vast majority of Americans."

[Don]

You are assuming that campaign positions are meant to be implemented. They are, in fact, meant to get the candidate elected. Quite frankly, none of us really know what the winning candidate will do in office. That is the reason that just about everything is held to be relevant in deciding who to vote for nowadays. I'm not saying that candidates have no beliefs or that we have nothing to base our votes on, but we should all be clear, especially after this administration, that we may be in for a big surprise when the candidate takes office. Sen. Clinton and Sen. McCain probably know better than to claim a tax holiday will do any good, but they want the voters to know that they will do damn near anything, no matter how stupid, to take of the voters interests. I don't like it, but I don't have a great record of voting for winners.

[Sean M. Brooks]

Dear Jake:

Which is why I never voted for Democrats for President, Governors, Senators, etc. IMO, the GOP is marginally less dishonest than Democrats.

Sincerely, Sean

Clinton clearly believes she can win, that Obama can't, and that she'd be a better than McCain. If you agreed with her assessment, do you think this particular example of a lack of principle -- the endorsement of a hair-brained but popular economic policy -- would really all that troubling? When was the last president we had who wasn't willing to sacrifice some principle in the short term as a means to some important end?

Now, if this is the last straw for some, then fine, I get it. But let's not pretend it's independently dispositive of Hillary's qualifications.

Last (unsigned) post was mine, in case posting rules require identification.

Jeez. Didn't take. (WT...?) Okay -- this has been "Q" the Enchanter...

[Anarch]

Which is why I never voted for Democrats for President, Governors, Senators, etc. IMO, the GOP is marginally less dishonest than Democrats.

I'd say that, leaving everything else aside, the Bush Administration pretty much kills that hypothesis d-e-d dead.

[Gozer]

This pretty much defines "craven". Run to the right when in doubt and either propose gimmicky initiatives in the mean time to shore up support or simply do nothing.

For people who are supposedly so politically astute, the Clintons have shown remarkable political tone-deafness regarding leftist criticism of the 1990s. It's as if they haven't realized that the political landscape hasn't changed at all in the last decade or so.

[Gozer]

Uhh...that should read "HAS changed at all"...

[felix culpa]

And Anarch (and Sean)—
Leave us not forget the Justic Department officials in the Nixon and Reagan administration who ended up in jail.
Poetic as well as authentic justice.

As for the current den of thieves, we wait with bated breath.

[Jake]

Clinton clearly believes she can win, that Obama can't, and that she'd be a better than McCain. If you agreed with her assessment, do you think this particular example of a lack of principle -- the endorsement of a hair-brained but popular economic policy -- would really all that troubling?

When juxtaposed against the rest of the campaign she's been running of late, yes, yes it is troubling.

Don't forget: winning isn't just about the voters at this stage. It's about convincing the superdelegates. When she calls some of the same out by asking if they'll stand with her or against her in taking on the oil companies, she's not helping herself.

Seriously, she's off her fucking rocker on this one.

[bwaage]

I would kill to see a reporter ask her how lowering the added costs of a product somehow hurts the producer.

["Q" the Enchanter]

Jake, that's a fair point, but again it's a point about HRC's strategery [sic] rather than a point about principle.

[Ben Alpers]

Further, she has only one real claim on the office she is seeking: that she has, historically, had a demonstrably good grasp on the actual policy needs of the country.

Really? What are the actual policy needs of the country on which Clinton has historically had a demonstrably good grasp?

I think her claim to the office is based on:

1) Inevitability (now largely faded).

2) Eight years as part of a very popular Democratic administration, i.e. "ready from day 1."

3) A perfectly serviceable record as Senator from New York (if you overlook a whole host of major decisions like Iraq).

4) A general sense that she's intelligent and capable.

5) The fact that she's been attacked a lot in the past, i.e. she's a fighter.

6) The claim that she's more electable than Obama (which is, IMO, a big, fat racially charged dog whistle since it's not based on any empirical facts)

[brent]

Clinton clearly believes she can win, that Obama can't, and that she'd be a better than McCain. If you agreed with her assessment, do you think this particular example of a lack of principle -- the endorsement of a hair-brained but popular economic policy -- would really all that troubling?

Its an interesting question. What bug me so much about this is not just that its a bad policy and that she knows its a bad policy. Its those things but it also that the policy, if it were enacted, actually has a much better chance of doing harm than good. Something she also knows. Moreover, she has made a point of attacking a fellow Democrat for not signing onto this policy, which she knows is bad, using the most absurd and hoary of right wing clichés. She has even decided, as of today, to draw a line in the sand on this issue between herself and all of those elitists in her party who don't care about poor people on this issue.

Ok. Politicians advocate for bad policy pretty much as a matter of course. But there is bad policy advocacy and then there is a kind of scorched earth approach to bad policy advocacy that crosses a line where it starts to harm the overall progressive agenda. That is where Clinton has been going with this all week and its pretty revolting even if one is not particularly naive about politics to begin with.

[hilzoy]

I should also say (echoing Jake's point) that telling members of Congress that they are "with us or against us" on the gas tax does not fill me with confidence about a future President Clinton's ability to deal well with Congress.

[OCSteve]

Ben Alpers: 3) A perfectly serviceable record as Senator from New York (if you overlook a whole host of major decisions like Iraq).

Actually I think she would have trouble there as well. She promised more jobs, they lost jobs, etc.

Based on this episode, how much confidence can we have that she'll really be wiling to go to the mat to combat global warming? None at all.

But now hilzoy is trying to convince me to vote for her… ;)

[Gromit]

Sean M. Brooks: Which is why I never voted for Democrats for President, Governors, Senators, etc. IMO, the GOP is marginally less dishonest than Democrats

Except for the fact that, of the three major candidates, the one who is calling BS on this gas tax holiday foolishness is a Democrat. In fact, McCain, who has built his candidacy around his supposed willingness to speak hard and unpopular truths, is the one who originated this particular pander.

[Slartibartfast]

Possibly Obama has learned from past mistakes in legislating exactly this sort of thing. If so, kudos to him for learning.

McCain and Clinton are engaging in idiocy. Lifting the federal gas tax at this point would take a mere nibble from the pump price. Or, possibly, they're thinking that if prices drop from $3.50 to $3.32 (or more) a gallon, people will worship at their feet.

[Nell]

I thought someone else would make this point by now, but since not:

There are a lot of infuriating aspects to Clinton's making this proposal, and even more to her fake-populist defense of it.

But the cherry on top for a lot of Democratic partisans is that it's not only a bad policy which she knows is bad policy, but it's a bad policy that she's copied from John McCain. That just perpetuates the horrible subtext from the "commander-in-chief test" tactic -- giving him unwarranted credibility in her effort to get a short-term edge on Obama, without any regard for the damage this might do in the general election.

Bleeah.

[Barbara]

"The claim that she's more electable than Obama (which is, IMO, a big, fat racially charged dog whistle since it's not based on any empirical facts)"

Thanks for stating that so succinctly. It's what I've been thinking for a while now, and I am pretty sure it's what many African Americans are thinking.

In addition to the gas tax grandstanding being a lot of shameless pandering, publicly declaring an ultimatum with Congress shows that Clinton is still the same as she was in 1994, when she exhibited zero political skills in dealing with Congress during health care reform. She fights hard, when it's in her interest, but I have yet to see her fight smart in any sustained kind of way. The so-called VRWC was vicious and unfair, but one reason it was so effective was that she never learned how to deal with it.

[Another Chris]

"At an event in Jeffersonville, Ind., on Thursday evening, Mrs. Clinton amplified her frequent pledge to introduce legislation to suspend the gas tax, saying she wanted to put members of Congress on the spot on the issue.

“Do they stand with hard-pressed Americans who are trying to pay their gas bills at the gas station or do they once again stand with the big oil companies?” Mrs. Clinton, of New York, said. “That’s a vote I’m going to try to get, because I want to know where they stand, and I want them to tell us — are they with us or against us?”"

Didn't a whole bunch of Democratic members of Congress lose their seats in 1994 in part because they voted for Clinton's 1993 budget package which, among other things, raised the gas tax?

[rea]

IMO, the GOP is marginally less dishonest than Democrats.

Rip Van Winkle, fell asleep in '93 and only now just waking up . . .

[DrDave]

The most ridiculous part about this whole thing is that neither McCain nor Hillary nor Obama if he was so inclined would be able to get a gas tax holiday through Congress anytime soon. Congress does not seem inclined to take this up, and there is nothing to suggest that Bush would sign it.

So why are we even having this discussion?

[cleek]

Congress does not seem inclined to take this up...

since McCain and Clinton are Senators, they could certainly sponsor the appropriate legislation themselves.

have they ?

[DrDave]

since McCain and Clinton are Senators, they could certainly sponsor the appropriate legislation themselves.

Have they?

Of course not. They're too busy beating up Obama over this nonsense to go debate it in the Senate chamber.

[cleek]

in that case, Obama should simply ask the same question i just did, in front of a TV camera.

"telling members of Congress that they are 'with us or against us' on the gas tax does not fill me with confidence [in her] ability to deal well with Congress"

She didn't "tell members of Congress." She told "supporters at a rally in southern Indiana." You might not care for the rhetoric (I don't either), but it obviously says nothing about her ability to deal with Congress.

(That was me.)

Good heavens! Okay, (again) this has been "Q" the Enchanter...

[Jake]

"Q", here's the direct quote:

“I believe it would be important to get every member of Congress on record,” Clinton told supporters at a rally in southern Indiana. “Do they stand with the hard-pressed Americans who are trying to pay their gas bills at the gas station or do they once again stand with the oil companies?

You can cry all you want about how she wasn't speaking directly to members of Congress, but she might as well have been. Parsing it otherwise is, well, fairly "Clintonesque".

"she wasn't speaking directly to members of Congress, but she might as well have been...."

I had no idea that it was "parsing" to suggest that mentioning your intentions vis-a-vis Congress in a speech to your base is maybe relevantly distinct from "dealing with Congress." I stand corrected, though wondering what room is left for elision.

Anyway, as to the utterly mysterious nature of HRC's ability so to deal, there is some direct reporting on the topic.

"Q"

[Fledermaus]

You might not care for the rhetoric (I don't either), but it obviously says nothing about her ability to deal with Congress.

Um. Isn't she in Congress. If she wants everyone on the record for this gax tax BS, I can think of one easy way to do it. Perhaps someone should send her this how-to video.

Everyone may agree that HRC is just saying this just because of the election, but that doesn't make it any better. In fact it makes it worse. Just like the Iraq war vote, she'll toss good policy out the window the moment there is a reason to do so.

[trilobite]

Jake, I don't happen to know how seriously most members of Congress take campaign rhetoric, as opposed to statements on the floor of Congress, or bill proposals. My guess is, not very, but that's just a guess.

[Jeff]

the GOP is marginally less dishonest than Democrats

Brilliant! Oh, that wasn't sarcasm? Then thanks to Sean for the laugh of the day!

==================

Re the main post: You just hate Clinton because she's a woman! (It seems I've heard that after every post about the stupid things HRC has done, and it's a loooooong list!)

[skeptic]

Can't wait to read your take on Obama's support for ethanol and "clean" coal and what it says about him. Maybe you could look at his 'middle class' $1,000 tax cut that extends into the top 10% of earners as well.

[Matt]

Will we soon be hearing about the elitist evolution scientists? Or the elitist global warming scientists?

Well, we all knew she'd stop at nothing to get the nomination.