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May 02, 2008



Krugman said it best:

"...Hillary Clinton is emulating [McCain] (but with a twist that makes her plan pointless rather than evil), and Barack Obama, to his credit, says no."

Put simply: if you manage to tax the oil companies enough that you cover the gas tax, then the total price to the consumer will be exactly the same as before. And if you don't, then that's more debt or less maintenance on the highways.

Krugman again:
"The Clinton twist is that she proposes paying for the revenue loss with an excess profits tax on oil companies. In one pocket, out the other. So it’s pointless, not evil. But it is pointless, and disappointing."

I agree with Krugman that from a pure policy perspective, Hillary's proposal is probably not harmful by itself. But politically, it is really dangerous for two reasons:

1) It sets the precedent that we will lower the gas tax to deal with high prices, when we should be moving the other way. These prices are probably here to stay, more or less, and that doesn't change the need for higher gas taxes.

2) If Hillary does manage to win the nomination, this policy puts a hurt on a lot of congressional Democrats, who have voiced opposition to a gas tax (for good reason). Those congressional Democrats who want to oppose the gas holiday would not have the nominee carrying the standard for them on this issue. This will soften Democratic resistance to passing the terrible Republican version of the bill.

D. Cupples

'Mornin' Adam,

As I mentioned in another post's comments, I read the Krugman article and grasp what he said. I think he's disappointed, because he knows that Hillary is merely politically posturing.

I think she's also playing hardball chess, looking a few moves ahead, and that MCCAIN forced her to do it.

Here's how I see it:

1) MCCAIN's fake plan is aimed at an audience that DOESN'T study politics or the policy process.

2) Those people falsely believe that McCain (whom they PERCEIVE as a maverick/liberal) is fighting big oil.

3) Thus, if Dems oppose McCain's bill, ordinary folks might believe that Dems are anti-consumer and pro-big oil.

Hillary's reaction to McCain gives Dems an out, without making themselves look like they're against lowering gas prices. Here's how I see it playing out:

1) Her proposal WON'T pass (which she knows), given the White House and the Senate's composition; thus, no actual policy harms will be done.

2) Too many Rs (and Bush) will support ONLY McCain's plan (sans windfall tax -- God forbid they tax a major industry).

3) This enables Hillary (and other Dems) to say "See, we Dems supported a tax holiday that Big OIL would pay for, but the Rs foiled the plan."

4) Her odious-to-Republicans windfall-tax idea gives her (and other Dems) a reason to vote AGAINST any tax-holiday bill that doesn't have a windfall tax provision.

5) Number 4 would enable Dems to say, "See, we really need to boot those oil-loving Rs out of Congress."

Again, these politicians AREN'T playing to you and me; they're playing to people who feel informed based on sound bytes that the (now-McCain-friendly) media generate.

The political mistake, IMO, is that Hillary and Obama (for party's sake) didn't unify over HER (meaningless yet politically helpful) proposal.

They may be opponents in the race, but they ARE Senate colleagues: they're allowed (and paid) to confer for the good of the nation (and other Dems).

At this point, the best bet would be for them to confer and to let Obama add something to Hillary's current proposal that would enable him to unite as a Dem with Hillary without looking like a flip-flopper.

Off topic: I went out at 10:15 last night to take the gas sign photo. What are you paying for gas in your area?


I'm willing to buy your argument DC. Politically, that's one way to play it. I'll give her the benefit of the doubt.

If I buy that, though then the problem is that both Clinton and Obama are out there campaigning as if there's a big PRACTICAL difference between their policies, which there isn't. But I guess, as far as nonissues go, it's at least a somewhat substantive nonissue. At least it gets the candidates talking about energy policy.

Prices are lower in Colorado - We're paying in the mid-3.40s for regular. But part of that is that all octane numbers are lower in Colorado due to the lower oxygen content in the air, so our gas is a bit cheaper to refine. I'd guess our $3.45 translates to $3.60 at sea level, give or take, so we still get it a little cheaper than you do.

D. Cupples


Hillary's both an intensely analytical person and a political creature.

Not only do I think Hillary was maneuvering against McCain, I think she out-maneuvered him in terms of how ordinary, non-Krugman-reading folks will perceive the sound bytes (i.e., by proposing that oil companies would pay for the price breaks).

Fortunately, Obama CAN still unite with her on this one.

Because such a bill would die in the Senate, NO dem should oppose Hillary's "plan" to make oil companies pay for consumers' price breaks.

About Octane: I've never understood it. Does it really cause higher gas mileage?

D. Cupples

Adam, I forgot to address your other point.

There aren't many practical differences between Hillary's and Obama's actual policy stances.

Their health care plans are different (Hillary leans more toward universality without fully achieving it). Then again, without a friendly Congress, the best health plans would continue to exist only on paper.

They might have differences re: how to deal with certain middle eastern nations.

At THIS point, they seem to disagree on raising the Social Security tax cap. I agree with Obama: we should raise it for certain income brackets.

Hillary says she's not for that, yet she refused to tell Bill O'Reilly that she would never do it (meaning she and Obama might be close on that issue).

They MIGHT pick similar Supreme Court justices. I'm confident that I'd be comfy with Hillary's choices, given who she is and her history. I'm not yet sure about Obama, because 1) I don't really know who he is, and 2) I don't know if some of his advisers would steer him wrong.

With these two candidates, to me the important question is which one will sell out to traditional special interests more.

I know Hillary's record of compromise. I DON'T know Obama's record on that, and I (as you know) don't believe much of what he says, because he has misrepresented too many things while playing to ordinary voters.

The upshot: I DON'T think that Hillary and Obama's campaign claims about issues are drastically different.


Short answer: no, higher octane does not lead to better gas mileage.

Long answer: well, it CAN lead to better gas mileage, in that the wrong fuel for your car can hurt gas mileage. Without getting too into the chemistry & engineering of it, a high-octane fuel is less likely to ignite before it's supposed to in the engine, which causes "engine knocking". Engine knocking does reduce gas mileage. But as long as you're not getting engine knocking, the octane number has basically no impact on gas mileage.

High performance engines burn hotter, so they are more prone to engine knocking, and as such they need higher octane fuels. For most cars, the lowest grade is fine. At high altitude engine knocking is less likely, so all the octane numbers are reduced.


I think Hillary avoided giving O'Reilly a completely straight answer on the SS cap. She said it wasn't her plan to raise the cap, but if I interpreted her right, she didn't flatly rule it out either. It's possible that she would be open to this, but she isn't making it a promise either way.

All in all, I thought Hillary basically waxed the floor with O'Reilly throughout the tax policy segment of the interview.


Even if I agree with your assesment of Hillary's political motivations on the gas tax issue, it's a risky strategy because she doesn't control the agenda in congress and it's easy to imagine ways this could be spun in the Republicans' favor. The simple, easy strategy is just to argue the silliness of McCain's policy, as Obama is doing. But as I said, I will give her the benefit of the doubt on this.

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