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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2011 > May > 02 > Entry
Editorial: On gas pices, rigidity on policy fights not the answer
As if sudden spikes in gasoline prices aren’t irritating and painful enough, their arrival just as people are planning driving trips doubles the pain. On top of that, these hikes always seem to be accompanied by the news that oil company profits are reaching new highs.
Sure enough,
on Friday, Chevron Corp. announced that its first- quarter earnings — covering a period before the latest spikes — rose 36 percent to the highest level since mid-2008.
Exxon Mobil also had its best quarter since then, logging more than $10.6 billion in profit. Shell’s profit rose 60 percent.
Topping all that is the fact that the price hikes are coming just as the economy was expected by economists to start seeing serious, sustained growth. Instead, the first quarter saw a growth rate of just 1.8 percent per year, according to the first estimates.
U.S. Rep. Dennis Kucinich, D-Cleveland, wants a tax on windfall oil profits, an idea that invariably comes up when prices jump quickly or significantly. He says his proposal would reduce the price of gas.
And he says the money should be used to help people purchase cars that get more than 65 miles per gallon and to reduce mass-transit fares during gas price spikes.
Tried after a price spike in the late 1970s, the tax was cumbersome to design and administer. And it had unintended consequences. Some people who favored repeal had originally supported it.
President Barack Obama’s approach is more balanced.
“The truth is, there’s no silver bullet than can bring down gas prices right away,” he said. But, “The attorney general’s putting together a team whose job it will be to root out any cases of fraud or manipulation in the oil markets that might affect gas prices. … We are going to make sure that no one is taking advantage.”
Nothing wrong with keeping speculators under a watchful eye. Make them nervous. But the investigation should not become a search for scapegoats.
The current spike does not result from a conspiracy by the oil companies to get windfall profits. It results from events in the Mideast and from continuing increases in demand from around the world, especially as the recession recedes.
The Mideast will continue to be volatile.
This nation’s government and business sector have not stood still on energy over the past few decades. Nobody has failed to recognize the downsides of depending on Mideast oil.
Nevertheless, we remain a nation of drivers of gas-driven cars, and we continue to be dependent on foreign supplies.
As on so many other issues, our body politic is split down the middle on how to proceed: how hard to push for domestic production, how hard to pressure car companies to change, how hard to encourage conservation, how much to invest in public transportation and other alternatives to cars.
The current spike — depending on its duration and severity — is not likely to change minds about the best way to proceed. The best hope is that it will cause political warriors to be willing to accept measures they don’t like in order to get some they do like.
Then, of course, there’s the general public. A recent poll by the Washington Post found that people aren’t convinced that any major sacrifices need to be made to get the national debt under control. Presented with several courses of action, people embraced only higher taxes on the wealthy.
Convincing people of the need for unpleasant action on the debt and energy is not something the two political parties will compete to do. If, however, they were to agree on some packages, they might be surprised by how many people would go along.
The constant, confident repetition by the political warriors that the hard actions preferred by the other side — whether spending cuts, tax increases, more regulation or higher prices — fosters the suspicion that no hard actions are necessary.
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