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Friday, June 20, 2003

The Krauthammer Energy Plan

Tony Adragna
Charles has a plan to reduce reliance on foreign oil by conserving more and producing more
We must reduce oil consumption. The easiest way to do it is simply to artificially raise the price of oil -- i.e., tax it.

Oil is currently selling at about $30 a barrel. Slap, say, a $5 (or $10 -- the bazaar is open) tax on every imported barrel. And most important, keep the new price -- let's say $35 -- as a floor. The world market price is likely to fall as Iraqi oil comes online, as Venezuela stabilizes and as Russian and Caspian producers ramp up production.

This presents a wonderful opportunity to capture the fall in oil prices in the form of taxes. Say oil drops to $20 a barrel. Raise the import fee to $15 a barrel, so the consumer keeps paying $35 a barrel net. The windfall goes to the U.S. Treasury.

The benefits of such a scheme are enormous. Fixed and fairly expensive oil prices will induce consumers to cut oil consumption. It won't happen overnight. People are not going to junk their SUVs, but they will begin to make choices favoring greater fuel efficiency over time, as they did when oil prices rose in the 1970s.

The windfall to the Treasury can also be beneficial if the scheme is kept strictly revenue-neutral: Every penny of the import fee should be returned to the private economy in the form of (1) lower taxes (my choice: lower payroll taxes) and (2) a government check to poor folks to compensate for their higher fuel costs.

If the oil import fee is high enough, consumption will be depressed, which will further reduce the world price and further increase federal oil tax revenue (and thus reduce payroll or other taxes), creating a virtuous cycle whose most important effect is a reduction in our dependence on foreign oil.

You can play with the numbers. You can alter the tax to create the desired reduction. You can debate whether it should be slapped just on gasoline or on all imported hydrocarbon energy. (Economist Irwin Stelzer of the Hudson Institute is fleshing out this idea.)

But what is important is the principle: Increase production -- Alaskan oil and nuclear energy, for starters -- and decrease consumption by taxing imported oil.

It is a simple solution. It requires only that each side recognize the virtue of the other's argument. Which is why in today's Washington it doesn't have a snowball's chance in hell of passage.
Well, since we're going where snowball's dread going, let me offer an alternative. Instead of focusing just on reducing our reliance on foreign sourced oil, let's try something that might push us away from reliance on fossil fuels altogether: Get rid of subsidies in the fossil fuels market!

Why play around with the market by using the tax code to artificially pump prices — the same route cigarettes took on their journey to $5 a pack — when you can get the same result by removing tax & subsidy schemes that work toward keeping prices artificially low.

Better yet, don't just take away subsidies in the fossil fuel market — get rid of all energy subsidies. Let consumers see the true cost of the energy they consume.

Update: Here's a good idea for reducing the military's reliance on oil: Stop building petrol powered naval warships! If the administration thinks so highly of nuclear power — which I'm certainly not against — then let's look at nuclear power for all future warships.

Tuesday, June 17, 2003

How Goes ME Diplomacy (cont.)

Tony Adragna
Last time I addressed this issue, it was to promote The Krauthammer Plan as the only path to a secure Israel existing alongside a Palestinian state. Since then much has happened: there's a Palestinian "Prime Minister", Mr. Bush released the "road map", and Mr. Sharon has accepted that the "[occupation] can't go on forever" — yes, he used that word, and even the nuanced explanation of what he meant doesn't alter the significance.

But is all that enough to change my mind? Do I now think that a diplomatic settlement might work?


Sure, we've now got Mazen/Abbas we can deal with, instead of Arafat. But Mr. Prime Minister seems to be stuck at the same roadblock as Mr. Arafat — what to do about Palestinian rejectionist terrorists. If Mr. Abbas is unwilling or unable to disarm the Palestinian terrorist threat to Israel's security, then he's effectively no improvement over Arafat. So far, it seems Abbas isn't willing to take the path that will lead to a necessary civil war between Palestinian rejectionists and those willing to live peacefully alongside Israel.

So, what's the point of this new Palestinian leadership, other than cosmetic — he's not too ugly to sit across the table from?

Mr. Sharon has a sticky mess in his path, too — what to do about the settlements. Ordering those people to leave their homes is going to be an extremely difficult task. Evictions from those "outposts" deemed illegal even under Israel's domestic law have been "carried out unimpeded" in the past, but opposition seems to be heating up.

How hot is it going to get when Sharon starts ordering the evacuation of well established settlements? Will he be able to take the heat? Is Israel ready for a civil war between Israeli rejectionists and those willing to live peacefully alongside a Palestinian state?

'Couse, "the wall" solution relies too on withdrawing Israelis from some settlements, but at least Israel would get security — peace will come somewhere further down the road.

But, not any further down the road than where it can be found on the current map — that place where Israelis and Palestinians are willing & able to deal with their own domestic pressures. Israel will get security through dealing death to terrorists, but she won't get peace. Abbas can avoid a civil war by not going after Hammas et al, but he won't get a Palestinian state.

What do I think about the "roadmap"? I think it leads to a dead-end...

Sunday, June 15, 2003

"Past the Point of Justifying"

Tony Adragna
It is too early to declare final victory in Iraq. But we're well past the point of knowing that our war to liberate Iraq was right and just. The discovery of mass graves filled with the bodies of murdered children should have convinced even the greatest skeptic. We made America more secure, liberated millions from a reign of terror and helped create the prospect for the establishment of the first Arab democracy. That should make Americans proud -- and critics of the administration's decision to go to war a little more circumspect.
That's Sen. McCain on today's WaPo op-ed page, and he's absolutely correct.

Certainly there's room for criticism of how the case for war was made. But one criticism can't be that the administration took us to war on intelligence that wasn't sufficiently reliable to justify war. To say that no other president would've taken us to war on the same conclusions drawn by the current one, you have to believe that Clinton's attack on Iraq in '98 either wasn't an act of war, or was based on some more reliable data.

But, I think there's as much room for criticism of public opinion that we shouldn't have gone to war on what we did know of Saddam's regime. Let's recall why it was that the UN Security Council resolved that Iraq be required to dismantle her weapons programs and submit to inspections. The Council made clear its concerns in 687's preamble[pdf], where we see this verbiage
Conscious also of the statements by Iraq threatening to use weapons in violation of its obligations under the Geneva Protocol for the Prohibition of the Use in War of Asphyxiating, Poisonous or Other Gases, and of Bacteriological Methods of Warfare, signed at Geneva on 17 June 1925, and of its prior use of chemical weapons and affirming that grave consequences would follow any further use by Iraq of such weapons,


Aware of the use by Iraq of ballistic missiles in unprovoked attacks and therefore of the need to take specific measures in regard to such missiles located in Iraq,


Deploring threats made by Iraq during the recent conflict to make use of terrorism against targets outside Iraq and the taking of hostages by Iraq,


Bearing in mind its [the Security Council] objective of restoring international peace and security in the area as set out in recent resolutions of the Security Council,
It was never just about Iraq's possession of weapons banned by international convention. It was about the regime "threatening to use" and the fact of "its prior use" of those weapons.

There didn't need to be a case made that those weapons could someday fall into the hands of thugs who might use them — they were already in the hands of a thug who did use them. But even then, in '91, there is expressed a concern about Saddam's possible connection to terrorism — his own threats.

My biggest criticism of the naysayers, though, isn't that they would discount those concerns until such a time as Iraq would prove an "imminent threat" to us. Rather, it's that they won't — or can't — see that there would still have been plenty of justification absent a direct threat against the US: Liberating Iraqi's from a thug the likes of Hitler & Stalin — admittedly not "like" in scale, but not for lack of trying.

Sure, non-compliance with Security Council resolutions was the vehicle we attempted using to gain international support, but even those resolutions understood that at its core the threat was the regime. The final campaign against Saddam's Iraq was always about getting rid of that regime.

To argue, as I've heard asserted repeatedly, that Saddam's murderous brutality wasn't enough justification, you'd also have to assert that knowledge of the Shoa wouldn't have been sufficient justification for going to war against Hitler. Indeed, as it became apparent — after our entrance into the war upon being attacked — that Hitler was murdering Jews by the millions, arguments were made that this was no worse than any other atrocities, so why would the murder of Jews rate a military response, but not those other cases? Sound familiar?

I'll wait 'til I know more about whether the president lied to the nation before starting to campaign for impeachment. However, whatever misdeeds there were leading us into war doesn't change the fact that the war was justified.