Cheat-Seeking Missles

Monday, October 23, 2006

Quote Of The Day: Fruits & Nuts Edition

Let us run that by you again: The idea here is to tax California oil in order to get Californians to use less Saudi oil. Brilliant.
-- Wall Street Journal Editorial

California's Prop 87 is attracting liberal glitterati of the first order, and I mean first order. The TV commercials feature Al Gore and Bill Clinton.

And, as usual, they're opening their mouths and garbage is coming out.

For non-garbage, the WSJ editorial (subscribers only) is a pretty good source:
If approved, the law would raise costs on California's oil producers by as much as $4 billion over the next 10 years. California would overnight become the state with the highest tax on oil producers in the U.S. -- which makes as much sense as Vermont levying the highest tax on maple syrup. ...

A Law and Economic Consulting Group (LECG) analysis concludes the bill would in fact increase dependency on foreign oil because the tax increases the price only on domestic oil. Meanwhile, to make it seem as if the tax will be paid by "greedy" energy companies rather than voters, Proposition 87 would make it illegal for producers to pass on the tax costs to consumers. But wait. The "Yes on 87" lobby also claims that the law would reduce California oil consumption by 25%. How does a law that doesn't allow the retail price to rise reduce gasoline consumption? These are logical niceties that no one much cares about when fads are in season -- and taxing energy is the biggest fad of them all these days. ...

Its main financial supporter is Hollywood producer [and Elizabeth Hurley impregnator/loser dad] Stephen Bing, who is also rich enough not to care about any increase in energy prices; his $40 million contribution is believed to be the largest individual donation to a ballot initiative in history. One co-chairman of the initiative, Vinod Khosla, a venture capitalist, has contributed $1 million to the campaign. Mr. Khosla happens to own an ethanol plant outside of Fresno -- just the operation that, who knows, might be eligible for funding from this new energy welfare fund.

The biggest impact of Proposition 87 would be to make California oil relatively more expensive to produce than Saudi, or Venezuelan, or Canadian oil. So if 87 passes, Californians will be approving the equivalent of a tariff on their own oil. So the tax would actually make America slightly more, not less, dependent on foreign oil. This is an energy plan that only Venezuelan strongman Hugo Chavez could love.

Yep, Prop 87 has it all: An utter lack of logic, featherbedding, billionaire-baby supporters (Bing's $600 million was inherited from grandpa) and an excuse for more government.

Unfortunately, the ads by No on 87 are not as strong as they should be. Sure, they have most of the right talking points, but no glitterati, and they miss the most telling talking point of all. All they have to do is show how inept all existing government-sponsored programs, and how the major innovations in energy conservation came from the private sector, not the public sector.

(Disclaimer: Chevron and Aera, the major funders of the No campaign, are both clients. I do not, however, work on Prop 87 for them. Wish I did.)

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