The President Who Knows What Works, Then Does the Opposite

UPDATE 2:04pm: The Republican Policy Committee has released an article showing that releasing more oil from the reserves will cost taxpayers $1.5 billion. A $1.5 billion cost…in order to lower gas prices a few cents for a couple of days. Is it worth it?

Maybe President Obama is not as clueless as he usually appears. Despite his policies, he does seem to understand how business and the economy works. The danger in his leadership comes from his desire to try and change the country into his utopian vision; to try and change what actually works to fit to what he wishes would work.

The President and his big-government allies wish that cars ran on sunshine and electricity (which is overwhelmingly generated by coal, go figure) right now instead of gasoline. They wish that raising taxes on job creators would bring in more money to the government. But when you listen to them speak and when you look at their policies, you learn that they actually do know what actually works in the economy, they just choose to do the opposite in order to try and force the country to work the way they want it to. This is evidenced in the President’s energy and tax reform proposals.

Energy

Last year, when oil prices spiked, President Obama released some oil from the Strategic Petroleum Reserve (SPR). Now his administration is considering doing the same. The SPR is only supposed to be used in an emergency. High gas prices threatening the President’s re-election may be an emergency to him, but it’s not an actual emergency that requires him to tap into our oil reserves. Now, Iran blockading the Strait of Hormuz, that may be enough of an emergency.

What the potential of an SPR release shows is that President Obama knows that an increased supply of oil will lower prices. Unfortunately, his energy policy doesn’t include an increased supply:

“…anybody who tells you that we can drill our way out of this problem doesn’t know what they’re talking about, or just isn’t telling you the truth.”

That might be the most adolescent shut down of opposition we’ve ever seen in politics: if anyone suggests a different approach, they’re stupid or lying. Apparently, everyone who believes that increasing the supply of oil would lower gas prices, are idiots and liars.

Except that increased oil supply would lower prices…and President Obama knows it.

The President likes to point out that oil production is up, however, this is only on private lands. With the massive growth in places like Brazil, China, and India, this increase in production is not enough. The federal government owns land that could provide a wealth of oil and gas – enough to drive down prices. But the President and his Administration have pursued policies that limit such exploration. In fact, oil and gas production on federal land is down 40%!

Not only that, but the United States has more recoverable oil than the rest of the non-north American world combined. The notion that we’re running out of oil is absurd.

The President knows this, but he’d prefer cars run on “green” energy…right now! Forget the fact that alternative energy vehicles cost far more than the average American can afford, especially in the Obama economy. And forget that the production of these vehicles pollute the earth more than traditional vehicles. Oh, and forget the fact that these vehicles don’t perform as well and are not as safe as traditional vehicles…we should all be driving them…right now.

The President claims he wants an “all of the above” strategy. It’s clear that his strategy does not include an increased supply in oil while we wait for alternative energy to be more affordable and efficient. We’ve been “investing” in alternative energy since the Carter administration, and while gasoline-powered vehicles have become more fuel-efficient, alternative energy vehicles are still too expensive and not worth the money.

The President knows this.  He knows the bad economy makes it difficult to afford these vehicles. And he knows that increasing the supply of oil would drive down the price. He just chooses to ignore all that because he thinks that while Americans can barely afford their bills, we’ll build ourselves out of this economic slump by spending more money on alternative energy cars.

Taxes

Last week, President Obama released his corporate tax reform plan. The plan calls for lowering the corporate tax rate from 35% to 28%. After that, the plan follows the President’s vision of the country: industries he favors get additional tax breaks, and industries he doesn’t like get tax hikes. Of course, it’s all in the name of fairness, right?

But hidden in his tax plan, the President makes a startling admission: he knows that lowering taxes will lead to increased hiring and production. How do we know this? Because the President wants to lower taxes on manufacturing and “green” energy companies in order to get them moving again. If the President knows that lowering tax rates will lead to more jobs and economic growth, why does he want to raise taxes on other companies?

Two reasons.

The first, the President wants the economy to improve by November. He knows that tax cuts for the industries that fuel his campaign will lead to more jobs in those sectors and therefore more votes. Manufacturing (unions) and “green” energy (environmentalists) will bring in mega votes. His campaign has been running on a theme of “fairness,” and how oil companies and the rich receive unfair benefits that should be taken away. The thing about “fairness,” is that favoring one industry over another creates more unfairness.

The second reason is more devious. Lowering the rates for some will lead to more jobs, production and therefore more tax revenue from those sectors of the economy. Raising taxes on other sectors will hurt those sectors and ultimately destroy jobs and reduce the amount of revenue coming in from those sectors because they are less profitable. It intentionally obscures the cause of resulting revenue shifts, enabling the President to claim that the increased revenues came because of the increased taxes on certain industries. The press will willingly accept this claim, and Americans will never be shown the differences in revenue collection from the two different sectors.

In both policy cases, the President inadvertently admitted to the American people that he knows what will actually work – and then he does something different. If he were truly looking for an “all of the above” strategy or “fairness,” then he would open up federal lands for oil production (instead of just claiming he will…some day), and remove loopholes, deductions and credits for all industries, not just the ones he doesn’t like.

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