Real Pricing for Petroleum and Our Growing Up

Thinking about the environment and greenhouse gasses, it’s hard not to meditate on large gas-guzzling autos that we drive. I know people all over the world drive automobiles that are environmentally less-than-friendly, but in some places, I feel as though there is more of a justification than what we have here in the States. Quite simply, because of the political-economic infrastructure and our two political parties’ electoral/funding interests we perpetuate bad policies, which are short-sighted and strategically repugnant.

Please let me take a minute to restate my thesis statement. The difference between strategy and tactics is simple: tactics are concerned with the next move, as a reaction to the most recent change; whereas, strategy is composing a long-term goal, and making continuous decisions with that goal’s accomplishment continuously in mind. Why I say our two parties make “strategically repugnant” decisions is that the votes for continued subsidization of oversized vehicles and the subsidization of the fuel to allow for them is a short sighted goal promulgated in favor of their respective constituencies, not thinking of the bigger picture.

Let’s say one is a Democratic politician, they vote for gas subsidization or against taxes that would constrain growth in the gas-guzzling SUV market. I know; I know; Democrats are the more environmentally friendly of the two political parties, right? Why do they take positions contrary to ecological ethics? It’s simpler than one might suspect, it all rests in Big Labor. That’s right, the UAW and the Teamsters have a vested interest in making sure that gas prices stay as controlled as possible, which is why the Democrats continue keeping gas reserves as consistent as possible. Further, because of the UAW, they work to keep Detroit making the SUVs. They have since the late 1990s. Why? The SUVs are beloved by the UAW, because they keep Detroit progressing with success and profitability, which keeps jobs plentiful and keeps unemployment low.

From the contrary, the Republicans vote for gas subsidization and against taxes to appease their constituency, but from an opposite position or at least for different constituency. The GOP, like the Dems, greatly benefits from a robust and strong Detroit. This is true, mostly because happy Detroit keeps Wall Street happy, and it keeps the Economy moving from all areas. From an economic perspective, the GOP and Dems have the same set of interests, but for the GOP it is in that their constituency’s income is either from Big Oil or is predicated from investment in supporting industries and general commodity growth. From a more base and vain perspective the culture of the McMansion, which includes an oversized “keeping-up-with-the-Jones’s SUV” as a birthright, is sitting firmly in the GOP constituency.

Therefore, with both sides of the US political dichotomy taking the same position, what is my problem? Clearly, if two opposites agree, there must be something okay with it? Sure, sure there is nothing wrong with economic growth, I certainly appreciate it, but let’s not grow so artificially. In short, if one were raising a high school kid, and saw their child taking steroids, they would force them to reconsider, and grow healthily. Quite simply, I don’t want to see the economy suffer, but there has to be a better way to continue to grow with a dependency on oil, but do so reducing that dependency.

We all know oil is the root cause of a great deal of turmoil in the Middle East, and it keeps our interests there consistently. In addition, it is not helping our stewardship of the Earth, forcing us down a road of extinction. Why don’t we slowly and surely change our policy, in a gradual way such that our economic interests would not be destroyed? Quite simply, we integrate more efficient platforms and new technologies which reduce our demand for petroleum. In addition, we subsidize conservation rather than massive trucks that look good going from the suburbs to the mall. We do so, letting the markets no very publicly, so there are no surprises. As we reduce demand, our amount of money going to keeping oil prices stable (i.e. the strategic oil reserve) is reduced; moreover, we will spend less money, time and lives fighting wars to preserve our interests in the Middle East. The UAW could get behind this, as their laborers can keep their jobs building more fuel efficient autos, and they can grow into the new areas. It wouldn’t be any easy row to ho, but it would be more long-term than what we are pursuing right now. It is just time we outgrew our bad policies and positions.

An addendum to this post, posted on Monday, the news concerning CAFE. You can read more on this at The Economist, or via any other news source. It's a step in the right direction, but it's just a step. The Economist's link: http://www.economist.com/daily/news/displaystory.cfm?story_id=10249454&fsrc=nwl