RAPIDLY rising gasoline prices are a conundrum for President Obama. To the extent that he can milk them for political gain in demonizing oil companies, the higher the price the better. But to the extent that voters blame him for mishandling energy policy, it could take a bite at the ballot box.
Voters don't like paying more at the pump. Experience tells us that Obama will reach sympathetic ears with his harsh rhetoric about Big Oil. In his campaign address of Jan. 24 (also known as the State of the Union speech), Obama's high notes included a commitment to an energy policy that doesn't inordinately stress “clean” sources of power. Yet he also demanded a major tax increase for oil and gas companies. And he extolled the virtues of factories that make products for Americans in America.
Manhattan Institute Senior Fellow Robert Bryce says the Obama-backed subsidies for renewable energy technologies are out of proportion to their worth and that tax breaks for oil companies aren't all that big relative to their benefits — in terms of job creation, reducing dependence on foreign energy sources and actually powering the country. This includes running the aforementioned factories.
Fairness would dictate that no energy industry sector gets more government help than any other, but this isn't a matter of fairness. It's a matter of choice and pandering when Obama exalts renewables and denigrates fossil fuels. The wind power industry, for example, wouldn't be what it is without government help, a policy that we support for a limited period. Absent tax credits, fossil fuels would continue to run the country. But the engine wouldn't run as smoothly as it does now because such a policy would favor foreign suppliers over domestic producers and probably result in even higher gasoline prices.