Friday, November 09, 2007

The Bush Gas Tax

Be advised: I'm bad at math. Mrs. Donier, my seventh grade algebra teacher, would be the first to tell you. Nevertheless, here's a mathy sort of post that, while possibly not accurate in the particulars, should effectively make the larger point. Story of my life.

The superstructure of the argument goes like this: an effective way to influence behavior is to meddle with incentives. Gas prices were so low for so long ($20 a barrel a decade ago) that Americans got used to burning it like kindling. Safe to say that we'd be a lot further down the road to greener technologies if the purchase of gas had hurt our pocketbooks--and by extension, Detroit's bottom line. One of the ways to accomplish this is a gas tax--which is what may have cost Ross Perot his credibility in '92 (that and being insane). Well, thanks to Bush's catastrophic policies, his wars and his tax cuts for the rich, that's effectively what he's accomplished.

Let's look at the stats. When he came into office, the euro and dollar were trading about even--though the euro was already starting its thumping. (1 euro equaled 1.07 dollars.) Crude was going for $23, and a gallon of gas sold for $1.50. Now the price of crude is $97, gas sells for $3 (as of Nov 5), and one euro gets you $1.47.

Since the price of oil is pegged to the dollar, our cost rises and falls with the cost of crude. But in Europe and in economies not pegged to the dollar, gas prices fluctuate not only in dollars, but in terms relative to their currency.

In Germany, the price of a liter of unleaded cost 1.04 euros per liter in March 2002 (most recent figures I could find) and 1.37 now. (In France it went from .96 to 1.30, Spain .81 to 1.06, etc.)

In other words, the health of the euro has kept down the increase of gas prices in tax-heavy Europe, while prices have gone up 100% here. In Germany, it increased 32%, France 35%, and Spain 31%.

It's not exactly like assessing a gas tax, but the effect is the same. And while gas prices would have gone up in any case, policies of the Bush administration have affected gas prices here far more than in Europe. A rich irony--Bush, trying to protect and enhance US oil companies, has created the financial circumstances for a green revolution. One case where his incompetence has actually had positive effects.

1 comment:

Chuck Butcher said...

a gas tax would've gone into the Fed coffers, this increase goes into Big Oil's coffers.

yes the dollar has deflated, but most of the price increase is thanks to fearmongering by BushCo,

the figures I've seen are $63/barrel based on supply and dollar slippage. The other $30 is about fear profiteering.

If you think anybody is really going to look at how many points in the supply stream Big Oil is profitinhg or at what insane profits are there...