This is really embarrassing. Barack Obama needs to be the Democratic nominee.
Steve Benen writes:
Clinton, on the attack, takes to the airwaves on ‘gas-tax holiday’ - The Carpetbagger Report: It’s one thing for a good presidential candidate to embrace a bad idea. It’s worse when the candidate knows it’s a bad idea. It’s worse still when the candidate attacks her rival for failing to embrace a bad idea. And it’s the worst when the candidate feels so strongly about the bad idea that she starts running television commercials about it.
And that, unfortunately, is exactly what we have in the case of Hillary Clinton and the “gas-tax holiday.” Her campaign unveiled a new TV ad yesterday in North Carolina and Indiana attacking Obama for not supporting a temporary suspension of the 18.4-cent federal gas tax....
I don’t doubt that Clinton’s focus groups found all of this quite compelling.... But Clinton’s proposal has no merit, and would probably do nothing but boost the profits of oil companies. Clinton... no doubt knows this.... It’s rather transparent demagoguery. Worse, it’s crude and cheap demagoguery.
Harvard economist Greg Mankiw noted yesterday, “I don’t know any prominent economist who favors this McCain-Clinton proposal. More common is the reaction of a friend of mine (a veteran of the Clinton administration) who calls the idea ‘ludicrous.’”
Paul Krugman, usually a rather enthusiastic Clinton supporter, explains:
Why doesn’t cutting the gas tax this summer make sense? It’s Econ 101 tax incidence theory: if the supply of a good is more or less unresponsive to the price, the price to consumers will always rise until the quantity demanded falls to match the quantity supplied. Cut taxes, and all that happens is that the pretax price rises by the same amount. The McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers.
Is the supply of gasoline really fixed? For this coming summer, it is. Refineries normally run flat out in the summer, the season of peak driving. Any elasticity in the supply comes earlier in the year, when refiners decide how much to put in inventories. The McCain/Clinton gas tax proposal comes too late for that. So it’s Econ 101: the tax cut really goes to the oil companies.
The Clinton twist is that she proposes paying for the revenue loss with an excess profits tax on oil companies. In one pocket, out the other. So it’s pointless, not evil. But it is pointless, and disappointing....
Good for Barack Obama for resisting this shameful pandering.
Alex Koppelman reminds me that “political campaigns are rarely about the actual merits of policy proposals.” That’s painfully true. Demagoguery works. Playing on voters’ fears and ignorance works. Confusing the public with bad ideas that sound good works. But I really don’t think Clinton wants to win this way. She’s smarter and better than cheap pandering.
Worse, all of this reinforces Obama’s argument that he’s more honest, principled, and willing to tell people the truth, even when they don’t want to hear it. Obama wants to present himself as a “different kind of politician,” and Clinton’s gas-tax attacks are making it easier for him to do so.
I’m absolutely certain that McCain and Clinton know full well this gimmick wouldn’t do anything to help consumers, and may actually make matters worse by encouraging consumption, pushing prices higher.
They know this, but are pushing the idea anyway, hoping, cynically, that it will pay political dividends anyway. What a shame.