Editore"s Note
Tilting at Windmills

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May 5, 2008
By: Kevin Drum

THE GAS TAX HOLIDAY....Contrary to my semi-prediction of a few days ago, the media has made a big deal out of the gas tax issue. But not because they've suddenly gotten religion about reporting on policy differences and highlighting political panders. I think Ezra gets the reason about right:

The problem with the press's relatively good behavior on the gas tax is that it was a one-off produced by a fairly rare set of circumstances: Namely, a 1) high profile fight between two leading national candidates who were 2) on the same side of the partisan divide and were 3) squabbling over a policy issue where there was utter unanimity among experts....If credentialed experts disagree, however, the media will still refuse to render a judgment. And when it becomes Democrat vs. Republican, all sorts of "experts" who have been given credentials (a sinecure at AEI) specifically in order to support Republican candidates will pop up and loudly proclaim support for health savings accounts or surges or sun blotting and the media will slowly back off in confusion.

I'm not as enthusiastic as some people are about criticizing the media for refusing to render judgments on complex issues, but it's true that they generally do a pretty lousy job of distinguishing experts from "experts." In this case, though, even the "experts" agreed that the gas tax holiday was a bad idea, so everyone breathed a sigh of relief and just reported the truth.

Kevin Drum 12:13 PM Permalink | Trackbacks | Comments (32)

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"Experts" may agree that the gas tax holidy was a bad idea. But it seems like the non-experts, like the working middle class, think that every little bit helps and so like the idea of a gas tax holiday - especially if the oil companies pay for it.

The press following Obama on this issue only serves to demonstrate how in the tank they are, still.

Posted by: optical weenie on May 5, 2008 at 12:22 PM | PERMALINK

Frist! The amazing thing is that only 45% of the population thinks the gas tax cut is a good idea, according to the CBS/NYT poll. That must be a record low for any tax cut idea in the last 20 years. Progress, perhaps.

Posted by: K on May 5, 2008 at 12:23 PM | PERMALINK

Not much effect for the average bloke... mostly armwaving.

The federal tax'holiday' will save a 20 gallon per week user about $4. Maybe enough for a cheap hamburger. A months savings buys a pizza and a six pack of Bud.

Posted by: Buford on May 5, 2008 at 12:26 PM | PERMALINK

Weenie,
Do you seriously think the oil companies will pay for it without finding a way to pass it along to us?

I've already sent back the shoes...

Posted by: thersites on May 5, 2008 at 12:26 PM | PERMALINK

Scientists come to agreement about bogus claims much faster than the general public. There is a margin in which a scientist can ride between what his fellow scientists knows and what the voter knows. So the scientist on the staff of, say McCain, learns to speak in double talk, like Greenspan. He speaks two messages in one sentence, one message to his fellow scientists and one to the voter.

Posted by: Matt on May 5, 2008 at 12:36 PM | PERMALINK

OW: ...especially if the oil companies pay for it.

This is, of course, absolute nonsense. The reduced market price will increase demand, which will then increase equilibrium market-determined price. The difference is that the cost-difference will now be realized by the oil companies instead of the fed. And the resultant increased demand will cause longer-term pricing issues.

In other words, the "gas tax holiday" will be a net shift of 5-10 billion dollars FROM the federal government TO the oil companies.

In other other words, this idea only appeals to mathematically illiterate suckers who don't know anything about economics. And the oil companies, of course, since they'll probably enjoy the windfall at our expense.

Posted by: DH Walker on May 5, 2008 at 12:36 PM | PERMALINK

Mmmm...more pie!

optical weenie on May 5, 2008 at 12:22 PM:

...every little bit helps and so like the idea of a gas tax holiday - especially if the oil companies pay for it.

At which point oil companies raise their prices to compensate for the lost profits...which in turn don't decrease when we get back from our craptastic 'holiday'.

The press following Obama on this issue only serves to demonstrate how in the tank they are, still.

So, using your logic, weenie, I guess you could say that Clinton is in the tank for McCain and the GOP. Is that right?

Posted by: grape_crush on May 5, 2008 at 12:38 PM | PERMALINK

It's more a matter of organized interests than of experts being on the wrong side of issues like this. There is not (as far as I know) any organized interest calling for suspending the federal gasoline tax; the McCain and Clinton campaigns just floated the idea on their own.

There are plenty of even less defensible policy positions -- on, for example, the Colombia trade agreement, federal protection for the domestic sugar industry, the missile defense boondoggle -- on which the media (and the politicians) respond much less to disagreement among recognized experts than to the reality that what seems on its face to be a weak case on the merits has passionate defenders. All the gas tax holiday has going for it are a couple of Presidential candidates and campaign consultants who thought it might win them a news cycle or two while high gas prices were making headlines.

Posted by: Zathras on May 5, 2008 at 12:42 PM | PERMALINK

That could be one reason. Another reason is the MSM is finally feeling guilty of soft-peddling Hillary's numerous scandals while man handling Obama on trivial issues like Wright, Rezco, etc.

But I think what started this sea change of behavior of the MSM from pro-Hillary-Clinton sycophancy to more fair and objective reporting is this letter of protest written by progressive journalists. Kevin Drum was even one of the journalists! I was really glad to see Kevin and other progressives finally speak out in defense of Barack Obama from the constant anti-Obama tone of the MSM. Finally, Hillary Clinton will know how Barack Obama has been treated all this time.

Posted by: TLM on May 5, 2008 at 12:43 PM | PERMALINK

FT has an interesting angle on why this gas-tax holiday brouhaha might be happening: 1) candidates need to address high gas prices. 2) they need to craft rhetoric that plays well in both IN and NC.

Indiana has more than a dozen ethanol plants open or under construction, with 381m gallons of fresh capacity planned on top of the 467m gallons it produces each year.
[...]
While Indiana cashes in on the ethanol boom, North Carolina is feeling squeezed. “It is reaching crisis point,” said Ron Heiniger, professor of crop science at North Carolina State University. “The livestock industry is the economic engine for rural communities in North Carolina and they are feeling a great deal of concern about rising corn prices.”

Posted by: jhm on May 5, 2008 at 12:44 PM | PERMALINK

I am glad that the media is covering this, but the way they are covering it is not particularly useful. Simply asserting that economists think it is a bad idea feeds into Clinton's argument: I am with you against an elite. Not enough of the coverage has emphasized why economists don't like it: given essentially fixed supply, a reduction in the tax will not translate into an equivalent reduction in prices paid at the pump. It is not simply a bad idea, it is useless, and it increases the profits earned by oil companies. Rather than making it sound as if economists want to deny the working class some much-needed dough, the media ought to be reporting that economists think that the main beneficiary is oil companies. I would love to hear a reporter ask Clinton: "If you suspend the 18 cent per gallon gas tax, how much do you think the price of gas per gallon that people actually pay will go down?"

Posted by: KenS on May 5, 2008 at 12:44 PM | PERMALINK

Jeebus, TLM,

Not sure where all this pro-Hillary press has been. I'm not a huge Hillary fan but she's been taking a beating for years, and that ain't right.

Posted by: thersites on May 5, 2008 at 12:46 PM | PERMALINK

"Experts" may agree that the gas tax holidy was a bad idea. But it seems like the non-experts, like the working middle class, think that every little bit helps and so like the idea of a gas tax holiday - especially if the oil companies pay for it.

People like free money. Gee, that is a surprise. And this makes it a sound policy decision because...?

The press following Obama on this issue only serves to demonstrate how in the tank they are, still.

Got it. Unanimity among economists smacks of elitism. The press reporting on that unanimity is just more fawning over Obama. And what about Krugman?

"... John McCain has a really bad idea on gasoline, Hillary Clinton is emulating him (but with a twist that makes her plan pointless rather than evil), and Barack Obama, to his credit, says no."

That must be his silly man-crush on Obama talking.

Posted by: junebug on May 5, 2008 at 12:49 PM | PERMALINK

Last time I checked, tax, was 3 letter word. These days you'd think ALL taxes were a four-letter word, unmentionably bad.

Huh? We live in a society. Services are not free. The federal gas tax goes towards infrastructure. Everyone who drives on a public road helps pay for the upkeep if they buy gas/diesel.

The problem is too many people try and avoid paying thier fare share of taxes. It's the obscene tax-subsidies to/for oil giants that we need a holiday from!

At least folks are realizing the complexities of the issue, and the shallowness of the proponents of the "gas-tax holiday."

What's next? School taxes? (I know they're too high...we do need better ways of shifting the burden off of property owners).

Posted by: Tom Nicholson on May 5, 2008 at 12:50 PM | PERMALINK

Oh, optical weenie. Just stop. Seriously, it's sad and embarrassing.

Posted by: on May 5, 2008 at 12:53 PM | PERMALINK

"If you suspend the 18 cent per gallon gas tax, how much do you think the price of gas per gallon that people actually pay will go down?"

It won't go down; prices will go through the roof as the working middle class will be on holiday while Bush starts a war with Iran.

Posted by: AJB on May 5, 2008 at 12:54 PM | PERMALINK

TLM must live in an alternate universe to think that HRC has been treated kindly by the press. With friends like that, who needs enemies, etc.

A friend of mine is waiting for his $600 Bush rebate so that he can fill his car nine times at government expense. (Big car, a van full of kids+adopted kids.) How is a gas tax free day different????

Posted by: jen flowers on May 5, 2008 at 12:55 PM | PERMALINK

Thersites, Grape et al.,
I'm not saying that the oil companies will pay for this - only that the people think that it would be good if they did pay for it.
Personally I don't see the point of having a gas tax holiday (especially now that my shoes have been returned) - but listening to the comments of "ordinary" people interviewed on TV and the radio this weekend shows that there are a number who welcome it. That's my point.
And having pointy headed economists (even tho the majority of them are dems) doesn't help sway the opinions of those who welcome the gas tax holiday.

Posted by: optical weenie on May 5, 2008 at 1:00 PM | PERMALINK

That should read:

And having pointy headed economists PONTIFICATE on the issue (even tho the majority of them are dems) doesn't help sway the opinions of those who welcome the gas tax holiday.t should read:

Posted by: optical weenie on May 5, 2008 at 1:02 PM | PERMALINK

They forgot to call "expert" Lawrence Kudlow who thinks all tax breaks are a great idea?!

Posted by: pgl on May 5, 2008 at 1:19 PM | PERMALINK

Weenie,

Little typing trouble there. You been into my beer again?

Posted by: thersites on May 5, 2008 at 1:49 PM | PERMALINK

Hillary: People need some relief, I suggest a gas tax holiday.

Obama: A gas tax holiday does not address the long term problem with gas prices. Hillary is politics as usual. America needs a Prez who will tell the Truth.

Bradley helped the NYTimes and WaPo call Gore a liar, too. How'd that work out?

Posted by: david on May 5, 2008 at 1:51 PM | PERMALINK

Hillary: People need some relief, I suggest a gas tax holiday.

Obama: A gas tax holiday does not address the long term problem with gas prices. Hillary is politics as usual. America needs a Prez who will tell the Truth.

Bradley helped the NYTimes and WaPo call Gore a liar, too. How'd that work out?

Posted by: david on May 5, 2008 at 1:52 PM | PERMALINK

Bankers and financial types have to be behind all of the "tax cut" schemes worked out since Reagan. If you don't pay as much in taxes it leaves you with more money to spend on 'fees', 'interest' and mortgage payments on over valued real estate.

How much do you spend every year on these compared to taxes?

Posted by: slanted tom on May 5, 2008 at 2:37 PM | PERMALINK

I think the press needs to ask the experts at the Insitute of Expertology.

Posted by: John Sully on May 5, 2008 at 2:38 PM | PERMALINK

Substitute "CAP" for "AEI" and little Ezra makes more sense.

Posted by: Brian on May 5, 2008 at 2:39 PM | PERMALINK

Through my Hillary-colored glasses, I see wonks, experts and bloggers staring at sausage being made and ralphing all over themselves. Just look away, boys and girls, if you can't take it.

Adding to the general brilliance of Hillary's position is that if she is quizzed by the experts on it, she can build policy, on her feet - and on the spot,as usual, that would block the oil cos. from capitalizing on this cut, and promise an extension into the fall by billing them in yet another way.

Smart cookie.

Posted by: Casey Chapple on May 5, 2008 at 4:41 PM | PERMALINK

The only reason the press jumped on this was to bash Hillary. Note how it is all her idea on cable news. No one is asking McCain tough questions about it, grilling his advisors on how it is a bad idea, etc...

No this is a chance for Russert and pals to jump on Hillary without being accused of being sexist.

If Bush had proposed this in 2000 we would be told it was a great idea.

Posted by: Teresa on May 5, 2008 at 6:01 PM | PERMALINK

The only reason the press jumped on this was to bash Hillary. Note how it is all her idea on cable news. No one is asking McCain tough questions about it, grilling his advisors on how it is a bad idea, etc...

No this is a chance for Russert and pals to jump on Hillary without being accused of being sexist.

If Bush had proposed this in 2000 we would be told it was a great idea.

Posted by: Teresa on May 5, 2008 at 6:02 PM | PERMALINK

No one is asking McCain tough questions about it, grilling his advisors on how it is a bad idea, etc...

No one expects McCain to make sense on any policy issue. We expect more from Clinton.

Posted by: AJB on May 5, 2008 at 7:37 PM | PERMALINK

Estimates are that it would cost about $40,000 to equip the average American home with solar panels sufficient to provide it with all the electricity it uses.

Assuming 100,000,000 American homes, multiplied by $40,000--for $4,000,000,000,000 ($4 trillion) roughly the cost of the Iraq war according to Stiglitz), we could have completely converted to solar energy for our homes (and not pay another electric bill for another 30 years or so).

So how much more would it take to add additional panels to power a fleet of electric or hybrid cars?

Posted by: Nick on May 5, 2008 at 8:31 PM | PERMALINK

Nick,

Estimates are that it would cost about $40,000 to equip the average American home with solar panels sufficient to provide it with all the electricity it uses.

That sounds like good news. What happens at night?

Posted by: Tripp on May 6, 2008 at 10:58 AM | PERMALINK
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