When Faced with a Political Crisis, Stick it to Big Oil
05 May 2008
(OK, so maybe you think it is a stretch for me to write about the presidential campaign in a blog focused on corporate crisis management. But since the prolonged reputation crisis facing the oil and gas industry is addressed here, that’s my rationale for the following.)
So what does she do?
She carries on in the long tradition of politicians. When the going gets rough, blame the oil companies.
This time Sen. Clinton has called for a “holiday” for the federal gasoline tax, ostensibly to give drivers (particularly those in Indiana) some relief from skyrocketing prices at the pump. To offset the tax revenue losses she would hit the oil companies with a windfall profits tax.
There are so many problems with this idea, I wouldn’t know where to begin.
To start, a not-so-minor problem with the idea is that there really wouldn’t be much relief for drivers. I read one economist’s estimate that the savings per vehicle might be a couple of bucks per week. But even that might not last, as economists and energy experts predict the scheme would simply encourage drivers to drive – thus increasing demand and driving prices back up.
Then there’s the issue of the lost tax revenues, which would otherwise be spent on improving our transportation infrastructure.
Well, Senator Santa Claus suggests that a windfall profits tax be imposed on “big oil.” She says the revenues from the windfall profits tax would be directed toward encouraging investment in green energy technologies. So here we have a blue state liberal on the one hand challenging oil companies to invest more in cleaner and renewable energy technologies, and at the same time wanting to take away their means to do it. (And, by the way, I defy anyone to show me one of the “big oil” companies that ISN’T investment in renewable and other green energy technologies.) In short, Hillary will take money from the energy companies (who are already investment in green technology) and give it to someone else (Al Gore?) to do the same. As Maxwell Smart would say, “Very Interesting.“
And on the back end of this “holiday,” with Congress being what it is, there would be significant political pressure to extend the holiday indefinitely, which would in turn lead to a significant crisis for many urban areas which rely on the gasoline tax revenues to support mass transit and other transportation infrastructure projects.
Sen. Clinton dismisses criticism of her idea, labeling as “elites” those economists who have voiced disapproval. I guess being an “elite” in this land is no longer admirable. Well, I don’t know if these economists are elite, but it would be foolish to dismiss their point of view. (By the way, with degrees from Wellesley College and Yale Law School, Hillary would qualify as an “elite” where I come from.)
Of course there is also the practical side of this.
If Sen. Clinton believes her plan is actually achievable, then she’s either A) totally out of touch, or B) sniffing too many gasoline vapors.
There’s not a snowball’s chance in the Saudi desert of this plan becoming reality.
She and Sen. McCain seem to be the only supporters of it in the Senate (and thus are 49 votes short), and not a single member of the House leadership has stepped forward with an endorsement.
I suspect that Sen. Clinton actually knows this idea will never see the light of day, but also believes it can win her votes. (Which tells you something about the state of Big Oil’s reputation.)
So she’s not stupid or delusional, she’s just shameless.
That’s not leadership. It’s cynical pandering.
With Candidate Clinton, it’s not the 3am calls we need to worry about. Rather, it’s the lack of midday wisdom that frightens me.