McCain, Gas and Taxes

"...McCain said his proposal to suspend the (federal) gas tax for three months this summer may need to be extended longer if high gas prices continue...."
Associated Press, July 18, 2008

Senator Hillary Clinton also supports suspending the 18.4 cents per gallon tax, which funds the US Highway Trust Fund that pays for building and repairing roads and bridges. Senator Barrack Obama does not advocate suspending the tax.

All taxes are unpopular, and the Republican Party has benefited enormously from cutting taxes and promising to cut more. The trouble is that when tax revenues are insufficient to cover the federal budget (as in every year since 2001), the Treasury borrows the difference by issuing treasury bills and bonds, most of which are nowadays bought by foreign governments, especially China. This situation has given China (the former Red China, its name before it started funding the US deficit) a malign leverage over US policy in Asia. Although President Bush blames big government spending for the deficit, not a penny has been spent by the federal government since he became president without his signature.

Republicans keep saying that reducing income tax rates encourages people to work and invest more. If so, what is the effect of cutting (or suspending) gasoline taxes? Encouraging people to drive more! But the more gasoline is sold and used, the higher world oil prices rise and the more gasoline will cost! So, part of the retail price reduction due to the suspension of the federal gas tax will eventually be offset by a rise in the price of the gasoline itself.

If the federal government reduces spending on road construction and repair due to lower gas-tax revenues, our infrastructure will deteriorate. In the case of bridges, reducing maintenance and repair can result in catastrophic collapses, as occurred in Minnesota a few months ago.

McCain also favors increasing the supply of domestic oil by drilling offshore, but not in the Alaska National Wildlife Refuge (ANWR). I say lets drill for oil both offshore and in ANWR (1). Critics (including many Democrats) note that any oil from these locations will not be available for about seven years; true, but if we do not drill in these places, in seven years we will be even dependent upon foreign oil than we are now!

Americans are responding to the dramatic increase in gas prices by driving less and switching to smaller cars, just as classical economic theory would predict. Fine, but we also must plan for a future less dependent on oil, especially imported oil. The best hope is electric cars, and the batteries we will need for them are now in development. If a method of transmitting electric power without wires can be developed in the future, the electric car will quickly replace the internal combustion engine and the demand for oil will plummet. Since electro-magnetic radiation needs no medium for transmission (which is why we don't need wires from the sun to deliver solar power), the idea seems possible.

As the world becomes more industrialized, demand for petroleum rises, and so does the price of oil, until some future technology will replace the burning of fossil fuels. This is a worldwide mega-trend, and no nation can stop it. However, part of the increase in oil prices is due to the "soft" US dollar, which has been sinking in value relative to the euro and other currencies. Our Federal Reserve Board could strengthen the dollar in international markets by increasing interest rates, but the Fed is loathe to do that now, since that would hurt the stock and real estate markets, both already in big trouble. A stronger dollar would also make American exports more expensive, which would boost unemployment.

It would be nice if even one of our two major parties or several minor parties (Green, Libertarian,, etc.) would come up with an energy policy that could deliver results in the long run, but don't count on it.

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(1) See "Frozen Assets", the March 29, 2005, Glazerbeam posting.

Jordan Threatens Freedom

The Hashemite Kingdom of Jordan, known as the most moderate and pro-American Arab country in the world, has indicted Dutch Parliamentarian Geert Wilders for slandering Muhamad and Islam in a documentary film called "Fitna", which ties certain passages of the Koran to Islamic terrorism. If he does not appear for trial in Amman, an international warrant for his arrest will be issued by the Royal Prosecutor General. (1)

Obviously, Mr Wilders will not be visiting Jordan any time soon. Just as obviously, neither the Netherlands nor any other western democracy will extradite Wilders to Amman. But there are about 55 predominantly Muslim countries in the world, most of which provide no legal protection for speech or writings critical of Islam. With the exception of Turkey, any of these states just might shanghai Wilders to Jordan for trial and certain punishment.

The list of Muslim lands includes Afghanistan, Iraq, Iran, Pakistan and Algeria, all of which might be of interest to a documentary film-maker. Thus, the Jordanian indictment has effectively deprived Mr Wilders of the opportunity to film many of the major political and military conflicts now underway in the world. International co-operation to enforce arrest warrants is a valuable tool against terrorists, genocidal tyrants, drug-smugglers and other criminals. It is appalling that this very tool could also now be used to silence those who dare to offend Islam!

If the Jordanian indictment were an isolated act, it could be dismissed as unimportant in the struggle for freedom of expression around the world. But in fact it is a part of a large pattern of suppression of speech that offends Islamists, including:
The Iranian threat to kill author Salman Rushdie
for writing The Satanic Verses (2)
The murder of Jewish journalist Daniel Pearl in Pakistan
The burning of the Danish embassy in Damascus to protest publication of cartoons about Muhamad in Denmark
The labeling of all criticism of Islam as "hate speech" on US campuses.

All of these efforts to control and limit expression of views contrary to Islam must be resisted, if freedom is to survive in this world. You might think that Jordan, which will receive nearly $193 million of US aid this year, would be responsive to American concerns on this question. But aside from having the amiable King Abdullah II on the throne (rather than having some Hamas-type dictator running the country), the US does not buy much influence for its money: Jordan votes against the US about 70% of the time at the UN, and President Johnson could not even keep the kingdom from joining Nasser in the 1967 Six Day War.

Freedom-loving Americans should demand that Secretary Rice raise this issue with the Jordanians anyway, even if she lacks the leverage to get this obnoxious indictment cancelled. In addition, we should individually boycott Jordan and any other country that agrees to honor its warrant against Geert Wilders. I guarantee you that the Glazer Family will not be vacationing in Amman this year, and I hope that none of my readers will.

If you want to see the magnificent carved stone walls of Petra, rent Indiana Jones and the Last Crusade. You'll also see Sean Connery as an old man, to boot.

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(1) Jewish World Review, 7/11/08.

(2) This lyrical novel was written in the irreverent spirit of the Monty Python films, such as Life of Brian. The death-decree was revoked by the Government of Iran after the passing of Ayatollah Ruallah Khomeini.