Donald, I'm not suggesting that we replace all SUV's on the road with minivans....just that if everyone who had bought a SUV had instead bought a minivan, we'd have saved a shedload of oil (note that commenter John lederer busted my math, and I overstated the saings by a factor of 6 - so it's .5%, not 3% - a significant but less dramatic savings).

And I'll strongly disagree about the impact of marginal consumption cuts on pricing in a supply-constrained market. We're looking at a future of $50+ oil pretty much regardless of what we do. But there's a big difference between that and $75+ oil, and the difference in revenue to the oil states won't be trivial.

A.L.

The world economy should not depend on a cartel.

Europe must not depend on foreign dictators and mobsters.

Actually, I was wrong when I thought I was wrong...it looks like my calcs were correct .

A.L.

You cite the percentages of our oil that is imported from ME states as if this constitutes an argument against reducing our petroleum consumption, or that said reductions would be effective "soft" warfare against state sponsors of terror. This is not true.

Indeed, if the percentage is as low as you claim, that's even less excuse to try to reduce our consumption, because that's that much less we have to reduce in order to have a tangible effect on what we give to them.

Starving terrorists of their funding isn't the only way in which energy independence helps fight terrorism. One of the things that stays our hand in some cases and compels us to act in others is our dependence on ME oil--and before you argue the word "dependence", consider the effect that cutting off 16% of our supply would have on our economy as it stands now.

It is true that the prospect of replacing our entire petroleum infrastructure and economy with alternative sources of fuel is almost prohibitively daunting. But replacing 16% of it is not so daunting--and is within reach of even the most pessimistic evaluations of what alternative fuels and energy policies can achieve. Can you imagine no net benefit, in terms of foreign policy, to being able to tell Saudi Arabia that we don't need their business any more? Would it not be a net positive to no longer be compelled to action or inaction due to our dependence on a given source of petroleum?

Catsy. (#4)

Oil is fungible. Nobody sells oil to anyone. It's sold on the open market. It's bought on the open market.

There's no "telling the Saudis" anything. It doesn't work that way.

Donald:

I know it's unfair to bring numbers to a blogfight, but here are some you ought to ocnsider:

In 2002, the US used 97.6 * 10^15 BTU. China used 43.2, and India 14.3.

Assume for a moment that China and India - each of whose populations in increasing at slightly more than 1%/year - start using 5% more energy each year. That suggests that in eight years, they'll go from using a total of 57.2 (*10^15) BTU, to 84.4, for an increase of 27.3.

If the US consumption increases at about 1% per year, we'll go from 97.6 to 105.7 - an increase of 8.1. But if, instead, we were to cut our consumption by 2% per year, we'd end up using 83.1 - for a swing of 22.7, almost enough to make up for the monstrous growth in consumption in China and India. And certainly enough to have a significant impact on the markets for energy worldwide.

Those are huge impacts on world markets, and will in turn have huge impacts on the revenues available to the Saudis and Iranians. that's got to matter.

A.L.

Don,

Consider that you are dealing with issues of faith here. Logic, reason and evidence have nothing to do with it. Elected officials know that mentioning reality in this context will only get them killed, so they pander shamelessly.

The same thing applies to criminal sentencing in general, and drug enforcement in particular.

IMO the only thing which will change public attitudes on such things is being hurt terribly over a long period of time, i.e., a Great Depression type event. The chances of that in this context are slim and none.

But we absolutely should give people like Armed Liberal a hard time about the fungeability of oil. Convincing the left that their pants are unzipped, their heads are empty and that they smell bad is at least emotionally satisfying.

Tom, I'm giggling...but you obviously missed the econ classes while you were painting the seals.

Oil's absolutely fungible. And it's a classic oligopoly. And if you think that flattening worldwide demand won't have an impact on the oligarchs, you spent too much time smoking up with Bernie.

So when you bring some fact-based arguments to the knifefight, let me know...

A.L.

> Starving terrorists of their funding isn't the only way in which energy independence helps fight terrorism.

Energy independence won't starve terrorists of their funding.

Terrorism is relatively cheap. Any country with a functioning govt can pay for a fairly significant terror campaign out of petty cash.

Oil is fungible. There are 2 reasons the Saudis ever listen(ed) to us and neither of them has to do with threatening to not buy their oil. One, we protect(ed) them from nasty neighbors from the Soviets through Saddam and now Iran. Two, because this is where they spend their money, and if we cut off visas the ruling class would fall into a horrible depression (plus they couldnt educate their kids).

Ah, but reducing US oil consumption does have two effects which would be beneficial...

First, the price of oil is highly responsive to changes in demand. Sure, prices are currently inflated because of international tension, but they're also high because the amount being consumed is closer to the total production capacity. In short, OPEC doesn't have huge amounts of capacity in reserve to take up the slack. By cutting our own consumption, the slack is increased, lowering the worldwide price.

Second, if the US can eliminate its reliance on foreign oil (or at least reduce it to Canadian and Mexican sources), we gain a great deal of geopolitical freedom to maneuver. Currently, the Middle East's biggest political defense against the US is oil production; we can't afford to seriously interrupt the current supply, pretty much no matter what people are getting up to. If we reduced our oil consumption such that we didn't have to import oil from the Middle East, we'd be much better poised to deal with an emergency that required us to interrupt that supply. (Yes, yes, the world oil market is fungible. But the US certainly has the power to stop that in an emergency - oil tankers don't outrun destroyers, much less missiles.)

"...if you think that flattening worldwide demand..."

Trying to socially engineer markets hasn't had a great track record. Maybe this time it'll work. Probably not.

China and India have 2.5 billion people. Their economic growth rates are five percent or better. We have 15 percent of their population and half of their growth rate. We can do whatever we want, oil will still come out of the ground and billions will go into the hands of terrorists because of it.

Looks to me like spitting in the ocean. I mean, I guess if it had no impact but made you feel better, I'd be all for it. But you guys are talking about spending tens of billions on this little excursion.

I wonder if some folks don't want us to exist at all? I mean, we obviously take up space, food, and energy. Consuming is existance, no matter how you slice it. It amazes me that good-meaning folk somehow latch on to the things we need for life and proclaim them immoral or unwise. If it weren't oil, it'd be something else.

As for me, I think we should bring back hats. Used to be, everybody wore them. Now where are they? When we all wore hats, we didn't sit around talking about energy consumption, I can tell you that.

AL -
I'm not suggesting that we replace all SUV's on the road with minivans....just that if everyone who had bought a SUV had instead bought a minivan, we'd have saved a shedload of oil.

If If If.

Read what you wrote again and then tell me that you're presenting a reality-based argument.

If a frog had wings it wouldn't bump its butt every time it jumped. If I had been an Olympic medalist I would have had a different life.

If you weren't actually suggesting that people replace all (all) SUVs with minivans over a six-year period, then what is the point of "iffing" about it?

Why don't we try to "if" some things that are actually feasible economically, technologically and politically?

The reason most iffers don't do that is that they would have to address the points of Den Beste's I cited in "The Wrong Size Glass." But that seems too hard for them (most of them, anyway).

Next:
But if, instead, we were to cut our consumption by 2% per year, we'd end up using 83.1 - for a swing of 22.7, almost enough to make up for the monstrous growth in consumption in China and India.

Even if the Arab oil states' revenues stayed flat because of this, they'd still be swimming in as much money as oil. I say again: there is nothing we can do with our oil consumption that will have any significant effect on the petrodollars available to fund Islamist madrassas or terrorist groups.

The only thing that has a chance of affecting terrorist petro-funding is a serious drop in oil prices, say down to $40 per barrel. But remember that the Saudi princes were shoveling money to al Qaeda throughout the 1990s when oil was not even that high.

As others have pointed out, terrorism is cheap to do. The Arab oil barons who want to fund it will always have enough money to do it. A mere million dollars could fund truly devastating attacks on London or Washington.

But we're back to the scaling problem, because cutting our consumption by two percent per year while still growing our economy is a huge, huge challenge. We now use approx. 20 million barrels of oil per day. To cut two percent means we'd have to drop 400,000 barrels per day, every day of the year. And then next year we'd have to cut 392,000 more barrels every day.

In less than three years we'd have to cut a million bpd. And at the end of eight years, we'd have to cut consumption from 20m bpd to 17M bpd, a net decrease of 15 percent.

What are the technologically, politically and economically feasible means to do that while still growing the economy at an acceptable rate?

AL, with respect, if you can't answer that then you're just tossing out another magic bullet.

Terrorism is cheap, but what the Saudis do with large amounts of cash is quite harmful on another level, which is to buy regional influence and promote Wahhabism. Plus, its economy is a weak point; the Saudi brand of "family" socialism is quite expensive to maintain and will be more so with each new prince born.

"Trying to socially engineer markets hasn't had a great track record. Maybe this time it'll work. Probably not."

Trying to regulate markets by controlling prices almost never works. But impacting prices by directly impacting supply and demand often works. in 1900 the city of New York attempted to spread out the population from Manhattan by building a subway system. It worked. In the 19th cent we tried to link the country together by subsidising (through land giveaways) transcontinental railroads. It worked. In the 1950s we tried to modernize our society by building the interstate highway system - it worked (though with some unintended effects)

"I wonder if some folks don't want us to exist at all? I mean, we obviously take up space, food, and energy. Consuming is existance, no matter how you slice it. It amazes me that good-meaning folk somehow latch on to the things we need for life and proclaim them immoral or unwise. If it weren't oil, it'd be something else."

ah, its those nasty back to the stone age Earth First enviro radicals. Thats whats got you bugged. I doubt very much if AL is one of them. Im certainly not one of them. Im all for mobility. While I think bikes and walking are great, and transit is a GOOD thing, i aint against the personal, powered 4 wheel vehicle. Though I wouldnt mind if they were smaller. And if they (esp the big ones) were more fuel efficient - hybrids maybe. And if it were easier to live with one per family, instead of two or three. I guess if Im not aiming for 3 SUVs per family, Im a long haired hippy back to nature type.

Hawk. I'm not sure I'm following you. But it's been a long week, so it's probably me.

The examples you cite do not seem to be cases of government managing the markets for some particular purpose. On the contrary: making individuals and goods more mobile actually creates new markets.

Who was it, Nixon? Didn't he try to freeze prices in the 1970s? I don't remember a lot of it, but it seemed to me like it was a disaster.

I agree that we'd all be better off working from our houses and driving much less. I'd love to see the day when we all have electric cars and home power stations. That day is coming, but "pushing" might make it actually take much longer, in my opinion.

A point that has went unoticed is that we are increasing our spending in alternative energies is a huge way --- every time the price of crude goes up, it creates a huge untapped profit potential. That brings a lot of new players into the party. High gasoline prices will do more to create new energy technologies than we could ever engineer. And the beauty of it is that the system is self-optimizing. As opposed to some static idea we might agree on but could become quickly outdated.

Terrorism is cheap: the <a href="http://www.cnn.com/2004/ALLPOLITICS/06/16/911.commission/index.html"9/11 attacks "cost an estimated $400,000 to $500,000... ."

As I said above, the cost of funding even disastrous terrorist attacks is not even a mosquito bite on the petrodollars available to do it.

Sorry, forgot to close the tag. Click here.

First, the price of oil is highly responsive to changes in demand.

Oil's absolutely fungible.

What all that means is that even if we become self-sufficient with respect to oil (i.e. we consume exactly as much as we produce) we'll still be dependent on the Gulf States because they produce so much as so low a cost.

There's some rather sloppy economic thinking here. If we're concerned about the money going to the middle east, say, the Sauds, there are two ways to reduce it. Buy less oil, or pay less for it. Oil demand may be inelastic to price, but oil price is certainly very dependent on percieved supply/ demand. Oil used to be 7 bucks a barrel, now it's 70; without buying a gallon more, we're giving 10 times as much money to people who don't like us. Much of the cost increase comes not from any increase in production costs, but from two factors: concern of the safety of tankers, especially in the Straits of Hormuz, and uncertainty in South America because of Venezuela and Bolivia's recent nationalisation shenanigans. These factors didn't reduce the supply of oil, they reduced the percieved future supply of oil, driving up today's prices. These factors only matter if we can't supply our own oil demands regionally. Smaller factors include reduced Iraqi oil production (it's coming up, slowly) and recovery from Katrina's effects on Gulf drilling.

Mr Sensing is arguably correct that there's no simple means for lowering national consumption. The answer then is lowering price. You do this by shifting the percieved supply/demand ratio. I'd argue the answer isn't trading SUV's for minivans (good advice, but irrelevant in this context) but announcing wide increases in offshore drilling. The announcements alone would drop price immediately, because this oil is a lot closer to home and less susceptible to foreign sabre-rattling. It won't solve our energy problem, but it will greatly reduce our foreign dependency problem. This cuts money to the Sauds, the Wahhabiists, and a wide variety of People Who Don't Like Us, including Chavez and his ilk.

> And if it were easier to live with one per family, instead of two or three. I guess if Im not aiming for 3 SUVs per family, Im a long haired hippy back to nature type.

There's no gas savings in moving from one SUV per family from 3 because the two sitting idle don't use any gas.

In fact, one way to reduce gas consumption is to INCREASE the number (and diversity) of vehicles per driver. That way, the most efficient vehicle for the job at hand can be used.

Planners seem to forget that folks buy what satisfies ALL their needs, not what does the best job of satisfying some of them. For example, if they need to tow, they'll buy a vehicle that can tow, no matter what the virtues of a vehicle that can't.

I'd argue the answer isn't trading SUV's for minivans ... but announcing wide increases in offshore drilling. The announcements alone would drop price immediately...

It won't solve our energy problem, but it will greatly reduce our foreign dependency problem.

If by "solve" you mean achieve near or complete self-sufficiency in oil, then I agree, even much greater domestic production won't do that.But we'll still be much better off.

Donald, you and I are fundamentally in agreement. If we agree that oil prices are highly speculative, then the only reason prices are still so high is the percieved threats to supply (Iran's threat on Hormuz, South American instability) are still present. Iran has not actually shot at anyone, but the threat is there, and it drives up insurance on the ships, which drives up the cost to transport, which drives up the price per barrel. We can work to solve these problems (not politically viable right now, unfortunately) or we can work around them. Showing that we mean business, rather than fluffy talk about promoting hybrids and flex-fuels, will help. Announcing drilling (and then doing it) would have a short term effect that we mean business about reducing our foreign demand, which would reduce the percieved threat. It would also have a long term effect "in a long time" when those rigs come online, so we're not having this same discussion, say, three years from now with the same lousy options ahead of us.

I say it won't solve our energy problem because (and you and AL have both said this) our energy problem is far bigger than who we buy oil from. We have to reduce how much of our energy we get from oil, or we're just going to keep buying ourselves into these sticky situations. I'm not even going to touch the ecological concerns. The problem is so staggeringly large that not only is there no quick fix, there aren't even good complicated fixes to it.

"If by "solve" you mean achieve near or complete self-sufficiency in oil, then I agree, even much greater domestic production won't do that. But we'll still be much better off." - My thoughts exactly.

Donald -

2 fast points then I'm off for some Peruvian food...

1) Let me (again) say what I said - I never suggested that everyone with a SUV immediately line up to trade it in (which wouldn't work because someone else would buy them) either under government duress or otherwise. I said that a cost-free choice presented itself to a bunch of people who chose the wrong (from the energy POV) thing; had they chosen something else - i.e. if we changed the mix of cars in the fleet starting next month - we'd have a pretty significant impact on oil and energy consumption without hybrids, alt fuels, or anything else. It's an essentially free savings.

2) Individual acts of terrorism are cheap, but growing terrorists isn't. They are farm-raised, and the farms that raise them aren't cheap at all.

Throttle that back, and we'll have some significant impacts - and one way to do it is to reduce the free cash the Saudis and Iranians have lying around. Moving oil from $80 to $50 is a step in that direction.

A.L.

Don, you accurately point out the oil consumption trends in China and India. Bear in mind, though, that efficiency technologies developed in the US will also be applicable in other countries: for example, I believe China is already negotiating for GE's coal-gasification systems.

The flow will go the other way, too: solar and wind are likely to build scale initially in countries without full grid infrastructures, and eventually reach the point of being economical in more developed economies also.

I'd love to see...home power stations.

I must confess total bewilderment with this (very common) enthusiasm. Given that efficiency goes up with size of generating plant (really enormous steam turbines being much more efficient than any alternative) I can't see how home power stations would be anything but a disaster for efficiency.

Solar panels on roofs, maybe. But anything else is a total waste.

"I can't see how home power stations would be anything but a disaster for efficiency"...cogeneration. All combustion-based power production processes generate substantial waste heat. Unless you are in a dense urban area like NYC, it's hard to make use of that heat with centralized power stations, but relatively easy in an individual home or apartment building.

I'm with #11 and #14 on this one...

#19: What you may have missed is that while oil use has shown itself to be rather inelastic, what we are hoping to do is affect oil price, thus flow of capital into agents who will use that capital to harm the US and the west in general, not just by sponsoring terrorism but buying global influence and essentially tying the hands of the US wrt policy options.

A modest decrease in oil use (say 15% in the US) will cause there to be excessive production capacity of a few million b/d, and we would then expect oil to drop from the $75 region down to something significantly lower.

In the long run 15% is not enough... more will have to be done.

I'm just glad to see that the blogosphere, and the public in general, is starting to realize that resource-contention is one of the driving forces of international (as well as national) interactions, both negative (war) and positive (trade.)

David,

Are you suggesting the waste heat be used for home heating? That's a perfectly fine idea, but one with pretty serious problems.

1) you need heat in winter. You need lots more electricity in the summer, for your air conditioner. Waste heat is still waste then.

2) GE claims almost 60% efficiency for its steam turbine plants. The best you can possibly do in a reasonable-sized home combustion-based plant is less than half that, probably more like 20% on average because of load variations. I suppose it depends on your relative need for heat and electricity, but it would shock me if the drop in efficiency when going to a little Honda generator all year long could be compensated by lowering your heating bill. Maybe you could run your generator only in winter? But that just means even more idle grid generation capacity in winter.

3) Don't get me started on emissions or the additional maintenance efforts this will require of individual homeowners.

This might work for big installations: say, a factory that wants electric power plus heat for drying something or winter warmth. But a generator for every suburban rambler? Big waste.

#27,

The problem with co-generation is summertime.

As I pointed out in another thread on this topic: the #1 place where it is possible to replace oil consumption with increased electrical output (coal, nukes, wind) is China.

They use a lot of oil for electrical generation because their electrical infrastructure (generators, transmission) is so poor.

Now how do you convince the rulers of China that investment in power plants will do them more good than spending on the PLA?

America gets 6X the GDP/unit of energy consumption than China does. Lots of low hanging fruit there.

As I also pinted out the real problem is not oil. It is bad government. Cutting oil consumption is not going to fix that. If we can fix that oil problems will tend to go away for a number of reasons.

AL,

Donald is right and you are wrong. Not only are you wrong. You are spectacularly, diametrically, unqevically wrong in every way. This isn't even a close call. Every benefit you claim for increased energy efficiency is simply unachievable.

Responding to the 3 points you made on the other thread:

From my point of view, there are three reasons energy is worth some serious investment:

1. Slow the rate of carbon emissions, in the off chance that they will have an impact on global warming.

http://www.envirotruth.org/news-cosmic.cfm

Climate change is completely dominated by naturally occuring phenomenon. The man-made contribution to climate change is at best trival. The US contribution to climate change is even more trivial. And the 3% savings are even more trivial. You're proposed benefit would make a trivial contribution to a trivial portion of a trivial problem. In other words, there is no measurable environmental benefit to your "solution."

2. Slow the rate of investment in jihad by the oil-rich Arab states, who have been the principal financiers of the spread of the core religious ideology that - when combined with alienation and anomie - leads to recruits who blow themselves and others up.

Donald already demolished this argument. There is no national security benefit to your claim.

3. Shelter our domestic energy infrastructure from disruption - whether through embargo, terrorism, or system disruption caused by error or chance.

This is a non-sequitur. How does a marginal reduction in demand protect supply? If our oil imports are reduced from 71.8% to 68.8%, we are just as vulnerable to supply disruptions. If you want to protect from supply disruption, you have to increase domestic supply, not reduce domestic demand. That means drilling for oil in the outer-contential shelf and ANWR, building domestic refineries, switching to coal and nuclear, and developing oil-shales and tar-sands. This is a supply side problem, not a demand side problem. There is no supply benefit to your claim.

Yes, energy efficiency has a part to play in our overall energy policy. But that should be purely an economic decision that should be made by consumers. Consumers must judge for themselves whether the costs of increased energy effieciency, or switching to alternative supplies are economically justified.

The world has plenty of energy supplies to satisfy the needs of mankind for centuries. The problem is that the cheapest and most convenient form (i.e. oil) is in politically unstable areas. The irony here is that the cost of energy is driven less by the marginal increase in demand produced by China and India, but rather by increased political risk caused in part by China's political maneurvering. And since China's economy is less able to absorb high energy costs, it is mostly hurting itself. What a bunch of maroons.

> Individual acts of terrorism are cheap, but growing terrorists isn't. They are farm-raised, and the farms that raise them aren't cheap at all.

Some "terrorist farms" are cheap and all are indistinguishable from "human being farms".

We could beggar all oil producing countries dominated by swarthy types (the US is still a major producer, it's just that it's an even bigger consumer) and there'd still be folks who wanted to kill us.

They want to kill us because they don't like how we live. Bankrupting them won't change that.

cogeneration...well, Honda seems to think they have something worthwhile: link

Since the electical output is only 1KW, it appears that this unit is mainly designed for heating and would run ony in the winter. The value of the electricity generated could be considered an offset to heating costs.

Wow, HA, been hitting the espresso machine?

Let's start:

There is, uncontrovertibly, a scientific controversy among the people who know what they are talking baout as to a) whether the current climate trends are outsinde the historic norm; and b) if they are outside the historic norm, whether there is a significant human-caused component to it. I'm neither convinced enough by the alarmists to advocate massive economic disaster in the hopes of staving off a possible Bad Thing, nor sangine enough based on the doubters to ignore it. There is some risk that we have to figure out how to manage. You want to ignore it (and by extension, so does Donald, because he can't see anything productive to do); great. We have a political process to make these kind of decisions - you line up all your folks, I'll line up all mine, and let's see how it comes out.

Next my post suggested that there were probably 10 3% solutions that were readily apparent - for an impact of 30%, which I'll hope even you agree would be significant.

I'll divert to Rev. Sensing, who suggests I'm delusional for thinking that people might just stop buying SUV's. First, SUV's have been advantaged by a bunch of policy decisions made by the government - to exclude them from passenger-car safety requirements, to exclude them from auto pollution requirements, to offer tax credits for their purchase - which were 180 degrees from what they should be and should have been. We can stop doing that with a stroke of President Bush's pen tomorrow.

Next, SUV's are - for all but a very small percentage of people who run ranch or construction crews - a fashion statement. As the Gap keeps learning, fashion is fickle, and we're starting to see the pro-SUV fashion change. I'd like to see us do everything in our power to make that change happen faster and harder.

Let's see, did you have any other claims lying around....I missed the part where Donald demolished the claim that terrorist finance depends in no small part on excess cash lying around in a few oil-rich states. Switching to Andy Freeman's claim that "terrorist farms" are indistinguishable from "human being farms", no that's not true. There's a large and dense infrastructure of religious/political education that has been set up over the last 20 years - financed by the Wahabbi and other Islamist sects - that seems to intersect pretty cleanly with people moing into terrorism. Because it's large, even though each node is relatively cheap, it has to cost a lot to maintain, and if each of the imams had to work for a living, they'd have less time to write, make videos, and recruit.

Next...

Marginal demand reductions do not, in and of themselves protect supply - except that they are the equivalent of a small 'generation' component at the consumer end. Which reduces the burden on the distribution network, and increased the free overhead of the network - making it harder to disrupt.

A.L.

#34 Armed Liberal,

You want to turn global warming from a scientific decision (you admit the science is unsettled) to a political one. Brains vs. muscle. How reasonable.

I propose that we at least wait til we fully recover from the Little Ice Age and also prove that "global warming" is not preventing another ice age. Wouldn't want to cover the planet with sheets of ice. Harder to farm under ice than under water.

In the mean time let all the believers act according to their beliefs. You might want to see that the Chinese and Indians get the word as well. Can't have them undoing all our good works.

AL,

We have a political process to make these kind of decisions - you line up all your folks, I'll line up all mine, and let's see how it comes out.
...
First, SUV's have been advantaged by a bunch of policy decisions made by the government

Hmmm. Been there, done that. Didn't work out too well last time, eh? First, government burdened the automakers with a bunch of regulations. Then, seeing the consequences, they exempted SUV's rather than bankrupt the automakers and send all those UAW members to the unemployment line.

The two opposing lines are not mine and yours. They are yours and yours. How are you going to get evironmentalists AND union members to agree? What is in this for the autoworkers?

I suggest to you the possibility that the solution is not to add layers of regulation on top of layers of regulation. Maybe you should consider the possibility that everybody would be better off by letting people buy the vehicles they want, and letting automakers produce vehicles they think people want. If consumers want fashion statements, let them pay for it. If consumers want fuel-effiecient vehicles, they can have those too. If the automakers make the wrong products and can't sell 'em, too bad.

Furthermore, if fashion is a sufficient reason for someone to want an SUV, who are you to deny them their preference? It is their own money after all. Let them spend it as they please and let the autoworkers that "liberals" claim to represent be the beneficiaries.Some rich guy's fashion preference in vehicles results in a huge transfer of wealth that finances excellent wage and benefits to some blue collar guy who would otherwise be stocking shelves at Walmart.

And if you want to talk about fashion preferences, isn't a hybrid vehicle also a fashion preference? Every analysis I've ever seen has shown that the fuel cost savings of hybrids doesn't even come close to covering the additional costs of the vehicle. Why should my tax dollars subsidize hybrids? Why am I forced to pay for someone else's fashion preference? There is no enironmental benefit. There is no national security benefit. There is no economic benefit - on the contrary there is economic harm as resources get misallocated. The only benefit is to the ego of some guy who wants to flaunt his self-righteous environmental correctness. I'd rather spend my money on my family or other purposes I think are worthy, thank you very much.

Why are "liberals" always so eager to spend someone else's money to subsidize things that fail in the marketplace? Are "liberals" so omnipotent that they know better what is best for people than the millions of consumers, producers and distributors making billions of decisions that make a market? Can you even recognize the monumental level of false arrogance this requires?

There's a large and dense infrastructure of religious/political education that has been set up over the last 20 years - financed by the Wahabbi and other Islamist sects - that seems to intersect pretty cleanly with people moing into terrorism.

This is true. But this was all financed during a period when oil prices were between $20-$30 bucks a barrel.

http://inflationdata.com/inflation/images/charts/Oil/Historical_Oil_Prices_Chart.htm

I suggest to you the possibility that if your 3% or 30% solution is ever realized, and oil prices return to $20 a barrel that the Jihad will get worse. What else are the Arab countries gonna do with all those males when they can't create conditions where they can make a living? I don't subscribe to this theory myself, but there is a plausible case to be made that the incitement to Jihad we've seen in the Arab world over the last 20 years is a distraction from the economic disaster in that part of the world. Maybe your "solution" would just make things worse.

HA, while your opponents may not be correct, there's one obvious flaw in your argument. Some of the costs of owning an SUV are externalized. For instance, we are now engaged in a trillion-dollar war that probably wouldn't exist if Iraq didn't have oil. So you see, I'm paying for the SUV drivers' fashion preference. But I'm lucky. I'm only paying money. Others pay with their lives.

First, government burdened the automakers with a bunch of regulations. Then, seeing the consequences, they exempted SUV's rather than bankrupt the automakers and send all those UAW members to the unemployment line.

And yet those automakers are sliding into bankruptcy anyway. What to do, what to do....

The two opposing lines are not mine and yours. They are yours and yours. How are you going to get evironmentalists AND union members to agree? What is in this for the autoworkers?

It would be fine for Honda autoworkers in the USA. So one side wants to marginally improve our oil import problem, and the other side wants to subsidise bloated inefficient automakers and the UAW. Are you sure you don't have a dog in this fight?

I suggest to you the possibility that the solution is not to add layers of regulation on top of layers of regulation. Maybe you should consider the possibility that everybody would be better off by letting people buy the vehicles they want, and letting automakers produce vehicles they think people want.

I think that's a good idea in general. Maybe everybody would be better off if people could buy the designer drugs they want, and let private chemists produce drugs they think people want.

Maybe everybody would be better off if anybody could marry anybody they wanted, and let churches produce the marriage ceremonies they think people want.

Maybe everybody would be better off if anybody could burn the flags they want and let flag manufacturers produce the flags they think people want.

Maybe everybody would be better off by letting people buy the nukes they want and let nuke-makers produce the nukes they think people want.

You think?

Well, no, the public interest is important too, not just buyers and sellers. But our government doesn't do a great job of serving the public interest. Somehow it tends to turn into buyers and sellers of influence. One sign of this is the sugar industry. Our sugar industry is an environmental disaster. And it can't begin to compete with foreign sources. Despite the subsidies but in line with the price supports, it's lost a whole lot of market share to high-fructose corn syrup. I've never heard any rational justification for those market interventions, only that they have a great lobby. If we can't do the right thing in this small example, where the general public is hurt in obvious ways to benefit an industry and a few workers who by rights should all be doing something else, why would we think the government can do the right thing about anything else?

I don't see a solution, but it's a problem worth solving. Government has responsibility for looking out for the public interest. That's their job, and they do it badly. It's tempting to say nobody should ever look out for the public interest since the government does it badly, but we all know that doesn't work either. How could we find a workable system?

Meanwhile, independent of the rights and wrongs of it, it will proceed as AL suggests. One side lines up its folk, the other side lines up their folks and see who loses more.

Every analysis I've ever seen has shown that the fuel cost savings of hybrids doesn't even come close to covering the additional costs of the vehicle.

Won't that depend on how high gas prices go? Who knows whether they'll be good or not? But then, if the intention is to shift costs away from oil and toward other things, they might be good even if the costs are currently higher. Spend $1 on american coal to save 50 cents in imported oil -- it could be a good deal. The economics would reflect it if we dropped some of the things we do to subsidise oil, but we don't have the political leadership to do that. See, once you have a bloated bureaucracy that's already distorted the economy in thousands of ways, it doesn't work to say we'll be better off if we leave it undistorted in one particular way. Sad to say, some of the effect of government distortion is to partly counteract the effect of other government distortion. It's hard to tell whether a particular change is good are bad. Kind of like the global warming argument where we can't tell whether human action is causing a big change in one direction or preventing one in the other direction.

So anyway, whether hybrids are cost-effective depends on how high gas prices go and how much inflation we get. Neither of them are predictable to the point you can say definitely it's a bad idea.

Why should my tax dollars subsidize hybrids?

If it happens, it will be because the lobbyists for hybrides become effective than the lobbyists for SUVs. The way I heard about the current subsidies, they'll have hardly any effect on the hybrids that get good mileage, but will mostly abusidise the Ford and GM hybrids that have nothing else in their favor. I guess that's an indication who has the lobbying clout at the moment.

Why are "liberals" always so eager to spend someone else's money to subsidize things that fail in the marketplace?

It isn't just liberals, it's everybody who wants laws that affect the marketplace. That is, everybody who takes a stand about legislation.

Can you even recognize the monumental level of false arrogance this requires?

I sure can. but there are many millions of people with that arrogance, everybody who thinks they know what laws are best. It gives me a little humility in my arrogance. How much difference will my opinion make, in such a vast sea of bullshit?

J Thomas,

And yet those automakers are sliding into bankruptcy anyway. What to do, what to do....

I know not what course others make take, but as for me, I purchased a Chevy Uplander minivan. How much sacrifice can one man be expected to make for his country?

It would be fine for Honda autoworkers in the USA.

Good point. However, I was listening to state-subsidized NPR a few weeks ago and Robert Reich was on complaining about the fact that while overall levels of employment in the auto industry have been consistent for decades, the jobs have shifted from unionized domestic manufacturers to non-unionized foreign manufacturers. This has resulted in a significant decline in the levels of wages and benefits for auto workers.

So one side wants to marginally improve our oil import problem, and the other side wants to subsidise bloated inefficient automakers and the UAW. Are you sure you don't have a dog in this fight?

Actually, I don't. In fact, I'd like to end the fight. I want both sides to take their dogs, go home and get the government and politics out of private sector economic decisions. In your own words, here's why:

See, once you have a bloated bureaucracy that's already distorted the economy in thousands of ways, it doesn't work to say we'll be better off if we leave it undistorted in one particular way. Sad to say, some of the effect of government distortion is to partly counteract the effect of other government distortion.

This is precisely the problem. That way lies serfdom. The economy is far too complex to be micromanaged by government. Every government intervention in the economy distorts the free market in unanticipated ways.

Here's something to ponder. I wonder what the opportunity costs of the New Deal and Great Society programs have been? How much wealthier would America be, and how much better of would even our poorest citizens be if the resources siphoned out of the private sector into government had instead continued to experience private sector rates of return compounded over 40-70 years?

I think that's a good idea in general. Maybe everybody would be better off if people could buy the designer drugs they want, and let private chemists produce drugs they think people want.

Fine by me. If people want to poison themselves that is their problem.

Maybe everybody would be better off if anybody could marry anybody they wanted, and let churches produce the marriage ceremonies they think people want.

OK by me too. If gay couples want to have private marriage ceremonies, and if churches want to provide them, then that's great. But that is the situation we already have today. The issue is whether the state will grant to gay-couples the special legal status that straight-couples have in society. I would argue against it because gay-marriage serves no purpose. The institution of marriage evolved as the optimal environment for child-rearing. This is irrelevent with respect to gay marriage. And extending state-recognized marital status to gay couples would be far too disruptive to justify. State recognition of gay marriage would upend familiy law, custody law, property law, and religious freedom in countless ways.

Maybe everybody would be better off if anybody could burn the flags they want and let flag manufacturers produce the flags they think people want.

Fine by me too.

Maybe everybody would be better off by letting people buy the nukes they want and let nuke-makers produce the nukes they think people want.

You lost me in this one.

Won't that depend on how high gas prices go?

Absolutely. And when that occurs, it will make sense to buy hybrids. And the automakers (either foreign or domestic is OK by me) will produce them profitably without subsidy. And if gas prices go back to $1.50, any subsidies will have been wasted.

You shouldn't assume that gas prices will always go up. They could collapse again just as they did in the 90's for the same reasons they did back then. I remember when oil was at $10 a barrel, the Economist had an article predicting the price would go to $5 a barrel.

http://www.casi.org.uk/discuss/1999/msg00181.html

It gives me a little humility in my arrogance. How much difference will my opinion make, in such a vast sea of bullshit?

LOL!