Obama’s Oil Speech: Old not Bold

Here is my reaction at the NYTimes:

President Obama lost his cool last week when – sounding like the old president – he said he was looking for some “ass to kick.” He didn’t regain any lost cool in Tuesday’s oil speech, which also made him sound like his predecessor: “Make no mistake: we will fight this spill with everything we’ve got for as long it takes,” he said, emphasizing “We will make BP pay….” Call it President’s Obama’s war on error.

Turning to energy, the president called for innovation and hard choices but offered little new or courageous thinking of his own. Instead, he went back to the same well he has drawn from repeatedly; blame the previous administration and their “failed philosophy.”

Whether justified or not, this refrain is getting old. Even the president’s appeals to America’s greatness sounded old. Can his speechwriters really do no better than 'remember when we won World War II and put a man on the moon?'

Most important, nowhere did the president mention two hard ideas that the public must accept if we are to move to a cleaner energy future: nuclear power and carbon taxes.

More here.

Comments

The "ass to kick" line was prompted by Lauer; when the President simply repeated Lauer's phrasing, it seems odd to say that he "lost his cool."

While I often don't agree with his policies, I sure liked the old cool-and-calm Obama more than I do the new CNN-style, let-it-all-out Obama. Comes off like he's sorta faking it, which makes it worse IMO.

When I was a kid, adults that were admired behaved calmly and in control when things got bad; you had no idea how they felt about it, but you did feel that the situation was under control (even if it wasn't).

But I guess these days, people want leaders who seem more like them and less like authority figures. I wonder when that shift happened exactly?

The efficiency-enhancing nature of Pigouvian taxes requires nearly perfect information on the marginal external cost at every market price at a given time. We already have heavy gasoline taxes. How much more is optimal? When does the tax begin to reduce social welfare?

The same problem befalls pollution permits. The initial quota will likely be inefficient and the initial allocation of permits is an enormous wealth-transfer mechanism.

I used to believe that both of these "solutions" were worthwhile. Then I remembered who would be implementing it.

Alex,

Think you'd enjoy Marc Eisner's reaction and summary of different takes here: http://pileusblog.wordpress.com/2010/06/15/the-speech/

DP Roberts, it's not true that Pigovian taxes require perfect information, any more than any other taxes. Best estimates are that the optimal tax on gas would be about $2/gallon, far more than what we pay now. Any movement in that direction would be efficiency-enhancing. Would you rather raise the revenue by taxing work and investment?

We tried harnessing the power of puppy breath and picutres of kittens and rainbows, and while these were very safe as sources of energy go, yield was disappointing.

The war on error. FTW.

@Erik:

>>>optimal tax on gas would be about $2/gallon<<< How do you come up with this? I am curious. Any references?

Look at it another way.

In WW II the Germans lost more soldiers and equipment to the Soviets than to all the other Allies combined.

does that take care of the objections?

He also made a temporary moratorium on new gulf drilling. New drilling relieves pressure on the oil, and helps make current spills less bad, so this seems to me a very bad idea.

Obama speech shows that no successful politician has the guts to propose a carbon tax. That is because the median voter (especially blue collar workers) will send him home. So greens you will have to do it on your own and IMO that is how it should be. I love when greens find solutions to problems that other greens insist there are no solutions to even after the solution is found.

BTW Look how little the Europeans have gotten for their Government spending and efforts. (NOTE: The Europeans used much less energy than us before the started to try to reduce.)

I believe that eventually a much cleaner technology with moderate costs will be found (some Politician will take credit for it for sure). In the mean time we will probably continue our slow evolution to cleaner and more efficient energy. (For the short run that looks like more natural gas and cleaner coal technology for electricity production.)

So get to work greens. Add insulation, build an earthship home, experiment with biochar, experiment with new ways to clean oil from the seas etc.

@Rahul

Perry, Walls and Harrington (2006) analyze the optimal Pigovian tax on gasoline and estimate it to be "over $2 per gallon." See http://bit.ly/bMxCVq

They go on to note that a broader tax on oil or carbon would be even more efficient.

"The 'pro' arguments for nuclear (technology is so safe now, no disasters in last X years) strike me as too similar to the pre-leak arguments for deep-water offshore drilling."

Well clearly the gulf oil spill means that means that any technology that is claimed to be safe is actually unsafe. We aren't actually capable of analyzing the types of risks or the nature of individual safety measures and if one group is wrong about one thing, completely different people must be wrong about other things.

What exactly was the "no disasters in X years" argument for oil drilling? Can you even go back a decade before finding one?

The inability of private industry to deal with an oil leak and aftermath of this magnitude certainly speaks volumes about their likely success in dealing with a nuclear incident! The United States is a land of clowns who believe either that freer markets or more government control will prevent or solve these problems. The fact is NEITHER works well in isolation. And none of the people complaining about Obama (or about Bush before him) could do the job any better. Environmental problems and social and economic problems are having network effects that multiply the negative externalities by a magnitude. One reason is because the world is getting crowded, but that is not the only reason. Technical innovation may fix some of it, but clearly there are even formal limits to individual (and therefore institutional) rationality. And we haven't ever seen a really difficult situation yet, though it is possible to imagine a few, while there are already lots of people who obviously couldn't think their way out of a paper bag.

That pigovian optimal tax will be on top of prices set by Soros/Brazil, ibn Al Saud, and whatever regimes are raping (this month) Mexico and Iraq.

It seems pigovistic college kids can afford additional $2 a gallon for gasoline and home heating oil, added electricity costs, etc. Just cut back on the weed, Man.

More GOP propaganda:

Hope and Change!!!

Gulf D-Day plus 59!!!!

"I blame Bush."

"I blame the GOP."

"The Spill to End All Spills!"

"Let's execrate BP and sue the pants off them."

"They told me if I voted for McCain, the environment would be destroyed."

Man on the moon; oil on the beach: “Because the Apollo program was based on a “can do† mentality, and the current administration is based on a “can talk† mentality.†

This isn't the Change for which I had been Hoping.

Let's have a GOP propaganda fest!

Carbon taxes.

How 2007.

Nuclear, yes. Carbon taxes, no.

(CO2 as a greenhouse gas is, well, purest bullshit. And apart from GHG concerns, a "carbon tax" is utterly baseless. I'm for replacing every coal plant in the US with nuclear, but because coal is filthy, not because of carbon.)

The War on Error?....The real error was Alex voting for this guy in the first place. ;)

The President's "war rhetoric" last night, I submit, had a Disconnect Quotient at least as high as what Michael Dukakis scored in the days after he and his helmeted head were seen bumping along in his tank.
As we approach Day 60 of (not "Obama's Katrina", not "Obama's 9/11") "Obama's Oil Slick": anyone want to begin making odds on whether Ken Salazar will still be Interior Secretary when Monday, 16 August dawns? I am no betting man but would not give Mr. Salazar more than a 50% of retaining his post. (I would also begin calling now for his immediate resignation, if the President can't find it in his heart to fire the ineffectual administrator of the Interior Department and the MMS.)
--in which case, President Obama might do well to begin practicing for a self-administered dropkick.

Excellent post bkarn!

Except:"but I always thought at a gut level that a shrewd, intelligent man sitting in the White House, and with both houses of Congress in his pocket, would be able to move mountains."

We really haven't tried it yet, have we?

As well and widely read as Tyler Cowen is, and his being an economist, I would think he could understand the economic principle Obama was laying out in his speech. It is called heavy investment in sacrifice, innovation, and production:

"The one answer I will not settle for is the idea that this challenge is somehow too big and too difficult to meet. You know, the same thing was said about our ability to produce enough planes and tanks in World War II."

The reason the Soviets were able to blunder their way to victory, because Stalin was a terrible military strategist, was the massive amount of military equipment, raw materials, and goods like food, the US delivered to Stalin. And to Britain. And to build a US Navy, Army, and Air Force.

Further more, the US developed many things that had never been done before, like the pressurized bomber which flew so high for so long and in so large numbers that it discovered and proved the existence of the jet stream. And radar, the uranium and plutonium bombs, machine automation, computers, and a list that goes on and on.

The principle is capitalism, not mercantilism. You know, capital increases the productivity of labor, and investment in research, development, and engineering results in new goods and services that didn't exist before.

It seems economists today think new stuff comes from China and capital is the money you use buying stock to drive up stock prices, just like an influx of cash drives up the price of gold.

Opps, sorry Tyler, I should have said Alex...

"the president called for innovation and hard choices but offered little new or courageous thinking of his own. Instead, he went back to the same well he has drawn from repeatedly; blame the previous administration and their “failed philosophy.† "

Let's see, for four decades the problem and solution have been the same, and no one is willing to believe in capitalism, and instead calls for the same old pillage and plunder.

So, other than ending the pillage and plunder and switching to capitalism, what new idea are you offering?

The House bill has the carbon tax in the form of cap and trade. Why cap and trade? Well, the economists who opposed regulation limiting pollution said to put a price on pollution, and the way to do it is with cap and trade.

Why do economist object to a tax on pollution? Because no one knows what the price should be to reduce pollution the level required. So, the solution is to have a market where the level is set and the polluters bid to find the optimal price to pollute.

Obama listens to arguments, and especially to economists and business people, and they call for a market solution, and cap and trade in the market solution, and a carbon tax is not a market solution.

And the House bill includes the same old tired statements Obama has repeated over and over - we need to invest in everything, including nuclear, and drilling for more oil and gas.

Nixon laid out the problem and solution. Carter laid out the problem and solution. And between Nixon and Carter and the actions of Congress, US oil consumption fell for six years, and over and above the off-shoring of energy intensive industry like steel making from iron ore, the energy efficiency has increased doing the things Nixon and Carter laid out in the 70s.

What I can't figure out when some says, "no new ideas" when a chronic problem is addressed with the solution rather clear but opposed by a very vocal minority that convince the less informed that essentially

In a time of high unemployment with 1o million people in need of jobs, we can't afford the massive employment required to address the decades old energy problem because we need to create jobs so people can afford to buy and pay for energy inefficient goods and services. So the solution we need is the government getting out of the way and handing out oil leases with no royalty requirements and other subsidizes and government paying for pollution cleanup so that gas is cheap enough to create jobs.

Wars are won at the margin.

never in a billion years!!!!!!!!

!!!!!!!!!!!!!!!!!!!!!!!!!

@ mulp

"The reason the Soviets were able to blunder their way to victory, because Stalin was a terrible military strategist, was the massive amount of military equipment, raw materials, and goods like food, the US delivered to Stalin."
Compare that "massive amount" with an output of soviet industry during the course of the war and think again. Lend-lease was essential when USSR had to hold off germans long enough to relocate factories and plug the holes in defense.

looking forward to update your blog !!

American always love oil. All American are same. They always look for oil. They do anything for oil. Obama is also from them.

Regarding public acceptance of nuclear - I would put it more as "public understanding of nuclear so they can make their own rational decisions."

Having worked in the US energy sector for over 20 years, I'm concerned about the vast knowledge gap in the public and the press and academia regarding the real world problems in producing cheap electric power. Achieving a better understanding of our energy present will surely help us develop a better energy future. For a free, realistic portrait of this generation of US nuclear plants, I suggest my "Rad Decision: A Novel of Nuclear Power." It is written as a thriller to avoid reader boredom - and that seems to be working, judging from the comments I've received at the website. Why not hear what someone in the bowels of the industry has to say? It is free online, or it's in paperback. See http://RadDecision.blogspot.com

“I got to about page four and I was hooked, I couldn’t put it down.
†¦ It was very easy to read, the characters were well described, and they were vibrant.†

- DAVID LEVY, noted science author and Parade Magazine contributor. You can hear David Levy's interview with the author of Rad Decision at http://www.letstalkstars.com/recent_2010.htm

"I'd like to see Rad Decision widely read"
- STEWART BRAND, founder of The Whole Earth Catalog.

Benny,

You may have missed what I wrote at the NYTimes:

"Nuclear power is among the cleanest sources of energy, power plants can be built when and where needed and *the combination of nuclear-generated electricity and hydrogen* can serve virtually all of our energy needs."

I didn't have time to go into this in depth but hydrogen and electricity are a great combination because one can be transformed into the other: from electricity plus water to hydrogen and from hydrogen to electricity with a fuel cell. Nuclear power works especially well with hydrogen because the power plant can convert water to hydrogen in the off-peak hours.

"Nuclear power is among the cleanest sources of energy, power plants can be built when and where needed and *the combination of nuclear-generated electricity and hydrogen* can serve virtually all of our energy needs."

Nuclear power, according to this website, is MORE expensive than coal:
http://www.nucleartourist.com/basics/costs.htm

Coal, you remember, is about half of the US power total:
http://en.wikipedia.org/wiki/Power_station

So replacing cheap electricity with more expensive electricity will result in no more oil spills? You certainly did not make the case that making electricity more expensive will cause people to adopt the Chimera of hydrogen fuel cell cars.

Good news,in here we will troduce

If you want to posses a fashionable style as them,it is absolutely worth for you to choose a right ghd hair. Our GHD hair straightener are specially designed according to local Australia conditions.
ghd hair straightener are able to provide the perfect solution to people's needs,it's even easier to create perfect curls,waves or flicks,as well as the perfect straight.The
ghd australia has been one of the most popular and leading straighteners of the
ghd straighteners cheap as its wide plates brings control and versatility for those with longer,thicker,afro Caribbean hair.the one that owns the glossy appearance and unique design,make your this season full of surprise,The GHD IV Salon Styler has been one of the most popular and leading straighteners of the ghd straightener as its wide plates brings control and versatility for those with longer,thicker,afro Caribbean hair.we provide you with various types of the ghd shop for you to share,Cheap and More Discount for you whenever you Buy in our store.Come on and enjoy the product around hair straightener!

Comments for this post are closed