More notable stuff from a panel with the campaigns’ energy folk
Here are some bits and pieces that didn’t fit in to my other post about the presidential energy adviser panel:
At the end of the panel, host Alan Murray called on the audience to use their little clicker widgets to indicate: which of the candidates would you vote for based on the energy policy you just heard about?
The vote came out: 17 percent for Clinton, 41 percent for McCain, 42 percent for Obama. Apparently, though, there was something wrong with the vote, so a few minutes later, they re-voted. This time: 17 percent for Clinton, 42 percent for McCain, 41 percent for Obama.
Sperling looked utterly crestfallen. I heard later he retired to his room, distraught. He’s not really an energy guy, and he felt like he’d failed his candidate. I must say, he didn’t dazzle or anything, but nothing I saw on stage can possibly explain that disparity. (Clinton and Obama’s policy proposals are substantially similar.) A woman I talked to later blamed it on sexism. That might be part of it, for all I know. It might also have to do with Obama’s popularity among the so-called "wine track" — affluent, high-information elites. Clinton is, conventional wisdom has it, a "beer track" candidate. Anyway, the result was striking.
Inevitably, one of Alan Murray’s questions was, isn’t cap-and-trade just a tax? Grumet started to explain, but Murray interrupted to push the point. "It raises energy prices. That’s a tax, right?" Finally, Grumet said acidly, "Look, do you want Lord of the Flies, or do you want a government?" There was applause. Grumet went on to say that if this is in fact a species-threatening crisis, then yeah, we might have to ask people to pay 30 cents extra a gallon.
This was a constant tension at the conference. The ideological conservatives at WSJ kept pushing the tax point, as though it were some devastating gotcha. Thing is, everybody who knows a damn thing about policy knows that yeah, it’s a tax. We need to raise taxes on energy. That’s a key part of the solution. But the t-word has become so demonized, policy analyst after policy analyst is forced to do a song and dance, dodging the point. Our discourse has become so silly.
After Myron Ebell of CEI asked, for the gazillionth time, about the horrendous costs a cap-and-trade system will impose on the economy, I’d had enough. I raised my hand and mentioned the McKinsey study, which shows that about the first 40 percent of reductions will be cost-negative — i.e., profitable — and asked why everyone, including the candidates, seems to willing to accept this tendentious premise. After all, CEI-types have been forecasting economic catastrophe from every regulation passed in the last century, and every time, without fail, they’re proven wrong. Why do we keep listening?
Who should rush to my support but Douglas Holtz-Eakin, McCain’s representative. He said, my candidate absolutely thinks you’re right — that the American economy has a capacity to innovate that always proves pessimistic economic models wrong.
Later, Sperling echoed the thought. He said Bill Clinton referred to it as a debate between the "lemon-suckers" (i.e., economists) and the techno-optimists (i.e., Al Gore). He said models always show deadweight but can’t predict innovation and invention.
Someone asked about a carbon tax, which economists purportedly prefer to cap-and-trade. Holtz-Eakin challenged the premise vigorously. He said economists "would rather be right than useful." They’re always comparing a theoretical carbon tax to real-world cap-and-trade system. In the real world, tax policy is just as subject to complexity and gaming and loopholes as a cap-and-trade system — it will end up with just as many "warts." This is an excellent and under-appreciated point.
Grumet said at one point that all three candidates were "directionally correct" on carbon policy. Murray said, maybe you could all three run on the same ticket! Grumet responded wryly, "don’t worry, there’s room on the cabinet."