JAGGED LITTLE ONE DOLLAR PILL

BILL WRIGHT: LET THE WRIGHT ONE IN New York Times columnist Thomas L. Friedman proposes we up our gas tax by one dollar—more specifically, by a nickel a month, for the next 20 months. Friedman says this will simultaneously help end our addiction on Middle East oil and reduce our deficit. Yawn, so what else is new? Here’s what’s new: Fiedman’s proposal has the support of Ford Motor Company Chairman Bill Ford and CEO Alan Mulally, automotive journalist David E. Davis Jr.—and some well-known conservative pundits. “Today, I read him, and I was agog,” said syndicated radio talk show host Allen Hunt. “I mean there’s Eugene Robinson, the wacky columnist for the Washington Post, and I find myself in agreement with him around 20 percent of the time. Thomas Friedman, I’ve never agreed with him ever—until today” This was in response to Friedman’s editorial, “If Not Now, When?”, wherein he states: “What’s unfolding in the Arab world today is the mother of all wake-up calls. And what the voice on the other end of the line is telling us is clear as a bell: “America, you have built your house at the foot of a volcano. That volcano is now spewing lava from different cracks and is rumbling like it’s going to blow. Move your house!” In this case, “move your house” means “end your addiction to oil.” Says Friedman, “No one is rooting harder for the democracy movements in the Arab world to succeed than I am. But even if things go well, this will be a long and rocky road. The smart thing for us to do right now is to impose a $1-a-gallon gasoline tax, to be phased in at 5 cents a month beginning in 2012, with all the money going to pay down the deficit. Friedman cites Princeton economist Alan Binder to support his proposal. Binder says legislating a higher energy price today that takes effect in the future would trigger a shift in buying and investment well before the tax kicks in. “With one little gasoline tax, we can make ourselves more economically and strategically secure, help sell more Chevy Volts and free ourselves to openly push for democratic values in the Middle East without worrying anymore that it will harm our oil interests, say Friendman in his editorial. “Yes, it will mean higher gas prices, but prices are going up anyway, folks. Let’s capture some it for ourselves.” I started thinking along these lines some 36 plus years ago during the Gerald Ford administration. Those old enough among us may remember WIN (Whip Inflation Now), the ill-fated attempt to get Americans to buy less, save more, blah, blah, blah. This, coming on the heels of the first Oil Shock following the '73 Yom Kippur War (or Ramadan War, depending on your point of reference) included an even more ill-fated idea of raising the gas tax, effective immediately—25 cents per year, for at least four years. The monies would balance the budget, build better roads and bridges, and the increase at the pump would slow down the consumption. It was too perfect a plan, everybody (and I mean everybody) hated it. Hell, not even President Carter thought it was a good idea two years later when he won the presidency. Had we done it, the fall-off in consumption in the mid to late 1970s (which was already steep), would have become more permanent and we wouldn't have had the upswing in the late '70s, culminating in Oil Crisis II in 1979. Moreover, Detroit's half-hearted love affair with better fuel consumption in the late 1970s-early 80s would also have resulted in a real change in how we did business. CAFE (the government-imposed Corporate Average Fuel Economy mandate for car companies) would not have been ‘necessary’ (that's a subject for another rant). And maybe, just maybe, Detroit could actually have produced decent diesel cars. LA CAR dieselheads like Doug Stokes and yours truly wouldn't always have to look towards foreign shores for some decent oil burners. Unfortunately, it won't happen. Any politician concerned about winning re-election (or, for that matter, a primary) won’t give it a second thought. Curiously, the White House Commission on Deficit Reduction, headed by former Republican Senator Alan Simpson and former Clinton White House Chief of Staff Erskine Bowles, recommended raising the gas tax. Predictably, neither ends of our political spectrum are warming up to the idea. As an aside, like Mr Friedman, I was contemptuous of pre-bankruptcy GM. However, like Malcolm Gladwell, I think that Steven Rattner and the rest of the Wall Street-Washington posse get way to much credit for the state of GM today. - Bill Wright