As it turns out, the New York Times has done what Clinton couldn't: find an economist who supports the holiday.
Bryan Calpan wrote an op-ed in the Times on his support of the holiday. The only catch is he agrees with all the rest of his profession that the holiday won't give much relief to Americans and is bad policy.
Quickly in the article it becomes clear that Caplan shares McCain and Clinton's contempt for the average voter, though Caplan combines this with an equal contempt for policy-makers.
[V]oters don’t want to hear this; they want politicians to “do something!” During our last big energy crisis, in the 1970s, “something” turned out to be a salad of populist nonsense: price controls, rationing, windfall profits taxes, arcane loopholes and lots of lawsuits. That political response turned an inconvenience into a disaster.
The fact that Caplan has such a low opinion of US citizens and government alike shouldn't surprise us. He is the author of The Myth of the Rational Voter: Why Democracies Choose Bad Policies, which Louis Menand wrote a very interesting review of. Essentially, Caplan argues that the average voter is woefully misinformed (true), and that government's make bad policy because of this fact. As Louis Menand notes in his review "Caplan thinks that the best cure is less democracy. He doesn’t quite say that the world ought to be run by economists, but he comes pretty close."
His proposal on the gas-tax is in this vein. We should enact this bad policy, he reasons, in order to fool the populace into thinking we are caring for their interest in cheap gasoline. This is the argument Machiavelli would have made on the subject were he alive today.
He also has a second reason: he likes the idea of the oil companies pocketing the money (no joke).
Second, even a “giveaway” to the oil industry sets a positive course for the future. During the last crisis, the industry was a scapegoat for scarcity. Politicians scrambled to stop oil companies from profiting from the crisis, even though temporarily high profits end shortages by giving businesses an incentive to figure out how to increase output.
It’s naïve to think that the oil companies have forgotten the ’70s. They know there’s a decent chance that economic populism will return. In fact, it already has: Senator Clinton’s full proposal is to combine her tax holiday with a ’70s-style windfall profits tax.
In this light, that oil companies might pocket most of the tax cut could easily be a good thing. It helps cancel out the negative legacy of the last energy crisis: public hysteria will occasionally work in your favor. This makes the energy companies less likely to hunker down on their profits and more likely to do what they didn’t do enough of in the 1970s: search for ways to increase production.
I disagree: even if it was correct that the subsidy would lead to more drilling (which I'm not clear on), that would lead putting off finding a long term solution to the problem.
Even if a subsidy to the oil companies were a good idea, it should be sold as such, not as a give-back to your average American. This very much reminds of how Bush claimed his tax-cuts were relief for the middle class when they in fact shifted the tax burden downward. This seems similarly sinister: a giveaway to corporations disguised as a handout to regular Americans. Sickening.
When Hillary Clinton disparaged the economic profession, she argued that they support policies that are good for the elites and bad for normal Americans. At least in this one case, she was right.
(Posted by Ewan)