Our series on the year in review continues with the second quarter:

April

“Surprise! Evangelical Politics Isn’t Univocal,” Jordan J. Ballor

So from issues like immigration to global warming, the press is eager to find the fault lines of evangelical politics. And moving beyond the typical Jim Wallis-Jerry Falwell dichotomy, there are real and honest disagreements among evangelicals on any number of political issues....

May

“How Do You Spell Relief?” Jordan J. Ballor

If Congress really wants to address the rising price of oil over the long-term, the only thing it can really do is act on what it directly controls. Congress doesn’t control supply and demand, but it does control how much it adds in taxes to the price per gallon. Why not cut or suspend the federal gas tax indefinitely?...

June

“There are more environmentalist misanthropes than you think,” Jay Richards

But anyone who reads widely in the environmental literature knows that suggestions such as Pianka’s are not uncommon. In fact, the desire for mass human death follows logically from the anti-human beliefs of some radical environmentalists. Some are more consistent in their beliefs than others. But Pianka is by no means the only person to express such opinions....

You may have seen an op-ed in the NYT last week by Tom Friedman, who noted that when oil and gas prices go up, bad things happen in oil producing nations abroad. The tendency is for the oppressive regimes in oil producing nations to consolidate their power and be less responsive to the demands of their citizens when they have the added buffer of huge profits from the sale of oil.

And domestically many have made the claim that rising oil and gas prices are a bad thing. Many people’s pocketbooks have been hit hard, when they stop to fill up at the pump and over the course of the long winter. So many people are against high gas prices that politicians at almost every level have felt the need to respond and make some sort of gesture, token or substantive, to address the issue.

There’s no doubt that the poor, as in most cases, are disproportionately affected by high energy prices. People on fixed incomes often have trouble paying their utility bills when prices spike. Others who must commute to their jobs have trouble filling up the gas tank. Attention needs to be fixed on the people in these sorts of situations, and help should be there when they need it. It must be noted, too, that increased taxes have the same drawback as increased prices from market-pressures: they are regressive.

But for the vast majority of Americans, if addressed honestly, the rising cost of oil is more of an inconvenience than anything else. If people can afford to buy expensive new SUVs and large trucks, they can afford the pinch on their disposable income that higher gas prices mean.

Even so, the inconvenience does have the ability to change people’s behavior, and this is why I’m making the argument that high gas prices have the potential to be a good, albeit a costly one (so to speak). People might drive less, carpool more, walk to the corner store instead of driving, and so on.

But an even bigger point is this: as gas prices rise the cost relative to other forms of energy is bound to decrease. This is why so many environmental advocates have long been arguing in favor of some sort of hefty additional petroleum products tax, which would make other sources of energy more competitive.

But what so many fail to see is that the market can accomplish by itself what such artificial and authoritarian measures are intended to do. Clearly the price we pay at the gas pump includes a huge amount by way of taxes to the various levels of government. But when gas prices rise without an increase in the amount of government taxation, the market itself is making other cleaner and renewable sources of energy more competitive.

As the Cornwall Declaration observes, “A clean environment is a costly good.” This has never been more true than in the case of rising gas prices. The wealth created by market economies allows the creation of new, better, and more efficient technologies. And the market itself gives strong economic incentive to the pursuit of such endeavors, especially when oil prices are on the rise.

It’s high time that environmentalists stopped being so wishy-washy about the market. As Paul Jacobs points out, they like the market when the prices are high but hate it when they are low. On this inconsistency, Jacobs is right. But where he’s wrong, I think, is that arguing for the positive effects of the market in this case automatically means that you must otherwise be for increased taxation to accomplish the same goals.

Related Items:

“Bodies for Barrels,” The McLaughlin Group, May 5, 2006 (archived text of issue available here; search for “ Issue Two: Bodies for Barrels.”) Key quote from Tony Blankley: “I’m in favor of free markets. The people will go to smaller cars if they want them. And trying to force people to buy cars they don’t want is foolish. And anybody who wants to protect their family, particularly if you have children, you want them in a lot of steel around them. And that to me is the better call to protect your children - driving around in Suburbans and large vehicles.”

Tom Daschle and Vinod Khosla, “Miles Per Cob,” The New York Times, May 8, 2006. Another installment of the “governments create markets” fallacy.

Jordan J. Ballor, “Humanity’s creativity helps environment,” Detroit News, April 22, 2006.

Jordan J. Ballor, “Cashing in on Carbon Credits,” Acton Commentary, April 19, 2006.

Jordan pretty well covered the territory in his earlier post on gas prices. But with the silliness from both Republicans and Democrats ongoing, it can’t hurt to suggest two additional sensible treatments of the subject: Thomas Nugent on National Review Online, and Jerry Taylor of the Cato Institute on FoxNews.

You may have heard about the debate in Washington that erupted late last week, as Senate Democrats and Republicans sought ways to respond to rising gas prices. According to Marketplace’s Hillary Wikai, the majority Republicans settled on “a $100 gas-tax rebate to be paid for by drilling in Alaska’s Wildlife Refuge.”

Michigan Democrat Debbie Stabenow proposed “a $500 rebate but pay for it by cutting the tax breaks for oil companies.” She said, “We should instead put that money back in the pockets of the people paying the high gas prices.” But one other Democratic plan was to stop taking that money from the people in the first place, at least temporarily.

The NYT reports that “Democrats were pushing for a 60-day suspension of the federal gas tax of 18.4 cents a gallon, and the Senate Republican leadership settled on the rebate.” The short-term nature of the proposed solutions lead many to suspect that any of the proposed moves are simply pandering to the voters in an important election year.

Indeed, Congress has good reason to distract us from the reality of the situation. As Benjamin Zycher comments (text here), “Oil industry earnings per gallon were about 19 cents in 2005, and have increased to about 23 cents more recently. Federal and state taxes per gallon of gasoline average 46 cents. And so by all means, yes: Let’s have a debate about who is profiteering from the gasoline market.”

Of the two options, clearly suspension of the tax is preferable to filtering money through the government bureaucracy and letting it trickle back to taxpayers. But why make it temporary? If Congress really wants to address the rising price of oil over the long-term, the only thing it can really do is act on what it directly controls. Congress doesn’t control supply and demand, but it does control how much it adds in taxes to the price per gallon. Why not cut or suspend the federal gas tax indefinitely? States could do the same, by the way.

Here are some of the reasons that even the 60-day relief plan was tanked, given by Congressional staffers:

Those leaders and Finance Committee aides said many Republicans opposed the Democratic plan because they feared that oil companies, which pay the gas tax, would not pass savings on to the public, or that the laws of supply and demand would push the price up again.

There was also the probable opposition of House Republicans, who have been reluctant to jeopardize the flow of the gas tax revenue to the highway trust fund that underwrites road and bridge projects.

“Our folks thought it might amount to nothing for consumers,” said one aide who was granted anonymity to discuss internal leadership deliberations.

The first excuse is really just quite lame. If increasing demand raises the prices further, they would still be lower than they would be if the 18.4 cent tax were still in place. The second paragraph really tells the tale. If Americans are addicted to oil, maybe politicians are addicted to taxes.

Instead of being worried that the move might “amount to nothing for consumers,” the politicians are clearly more worried that any move to cut taxes would “amount to nothing” in terms of spendable tax revenue.

Placing limits on the levels of government taxation of gasoline would be a much more substantial and effective move than attempts to set price controls, as advocated in an online petition introduced by Michigan Governor Jennifer Granholm.

According to MichiganGasPrices.com, Michigan gets nearly 20 cents (19.875) in tax revenue per gallon of gasoline sold, and this figure does not include the additional 6% sales tax that is tacked on.

Government leaders should never forget that they are entirely dependent on the productivity and labor of the nation’s citizens for their budgets. Their task is to responsibly and faithfully administer those funds, acting as stewards on behalf of the tax-payers. Attempts to point the blame for rising gas prices solely on oil companies, without acknowledging the basic role of rising demand and high levels of government taxation, is irresponsible and disingenuous.