Washington Bureau

Economists: Gas tax cut won’t save money.  Voters: Whatever.

WAKE FOREST, NC – Energy economists think Sen. Hillary Clinton’s proposal to suspend the federal gas tax this summer will do nothing to lower gas prices.

Because oil supplies are so tight, The complex market forces that drive the international petroleum markets will likely send prices almost immediately back to pre-tax cut levels.

But the vast majority of voters aren’t energy economists. And those flocking to Clinton’s campaign events as she crosses North Carolina this weekend aren’t hearing the economic message, or choosing to ignore it.

At a get out the vote event in this growing bedroom community north of Raleigh this morning, her tax proposal drew by far the loudest cheers from the crowd.

“I think it’s imperative that we try to obtain some immediate relief, and what I’ve proposed would do just that. There’s a big disagreement in this campaign. You see it in the headlines, about where sen. Obama and I stand about the immediate crisis we face on the energy front,” she said. Obama opposes the move, agreeing with energy economists who think it will do little or nothing.

The message hit home with commuters like Tommy Barham. He commutes 45 minutes in traffic every day commuting from Wake Forest to his job in Raleigh. His gas bill has doubled to $500 over the last few years. Despite what economists say, he’s convinced it will help.

“The gas tax is a good start. We’ve got to do something for the working man driving to work every day,” he said.

--Sean Mussenden
  1. "Because oil supplies are so tight, The complex market forces that drive the international petroleum markets will likely send prices almost immediately back to pre-tax cut levels."

    This article is silly. Without the cut, the prices would be going even higher.

    And once the cut and the new tax on the oil companies is passed, then later it can be expanded and lengthened.
    Posted by on 05/03 at 11:20 PM
  2. Exactly, fsteele. As if by NOT cutting the gas tax will protect us from the oil companies continuing to raise prices.
    Posted by on 05/05 at 02:18 PM
  3. The alleged "energy economists" recently quoted in the news as opposing the gas on the basis that it won't save money are simply playing political games. Many people (even those who don't claim to be "experts") can see that speculation and withholding oil supplies have been a factor in rising oil prices.

    An article written in today's (May 6, 2008) edition of the Wall Street Journal says:

    "As energy prices surge -- oil briefly surpassed $120 a barrel Monday in New York -- U.S. regulators are poised to expand their oversight of oil companies and energy markets in ways that Congress once thought unnecessary.

    The Federal Trade Commission last week said it would delve into the workings of the oil industry, examining scenarios such as the withholding of supplies from the market, as it prepares to write rules banning market manipulation. Acting under authority granted in a 2007 energy law, the FTC's powers may be great enough to reach into the oil-trading markets, competing with the Commodity Futures Trading Commission, the traditional overseer of energy-trading markets... The effort to bolster regulators' powers comes as politicians are scrambling to demonstrate toughness in dealing with oil producers...

    For now, no one knows whether or to what extent speculation might be driving up prices. But with oil prices breaching $120 a barrel and closing Monday at a nominal record of $119.97 a barrel, Washington is more willing to challenge a free-market philosophy that has long reigned in the energy markets...

    This time, oil companies and energy-trading markets are under scrutiny. One hitch will be the extent to which FTC regulators are willing to venture into the CFTC's regulatory turf.

    'We are initially casting a wide net and seeking feedback on the types of manipulative activity we should consider prohibiting," said David Wales, deputy director of the FTC's bureau of competition. 'This does include possible market speculation in petroleum, but we also have to consider the expertise and potentially overlapping jurisdiction of other federal agencies.'"

    http://online.wsj.com/article/
    SB121003101775569127.html

    This article, and the actions planned by the FTC regulators, lends credence to Clinton's argument that the way to approach the problem of soaring oil prices is to send a clear message to the oil companies that we will scrutinize them and make them responsible for the "savings" being offered to consumers. Although, the amount each consumer will save, may be small, the symbolic effect of shifting the burden of this cost from consumer to oil company is in keeping with the direction we want to take as a country.
    Posted by on 05/06 at 06:27 AM
    4. Page 1 of 1 pages

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