A few more words on my former Detroit News colleague, Shikha Dalmia of the Reason Foundation, and her article debunking the “energy independence” myth — a must read in this presidential-election year. Indeed, it hard to remember an election in which the daily discourse was so divorced from economic reality. On energy independence, on global warming, on declaring Wall Street greed and deregulation the cause of the financial crisis, etc. — both the Obama and McCain campaigns have trafficked in political sloganeering that is profoundly misleading.
Democratic demagoguery on trade and markets is a given, but the GOP — allegedly the bastion of “sensible” business types — has now also embraced the Left’s populist rhetoric. After all, it was George W. Bush, not Nancy Pelosi, who coined the term “America’s addiction to oil” that now poisons our energy debate.
Bush lunged at the phrase to shield himself from Democratic accusations that his Iraq policy was about oil. But embracing the liberal lexicon did nothing to win over opponents who already hated him, and only put GOPers on a slippery slope to embracing state subsidies for uncompetitive technologies that make no sense without the false premise of energy independence.
As a result, pols like Sarah Palin are compelled to deliver absurd stump speeches such as the one she delivered in Toledo this week (as reported by AP).
“Palin says the recent drop in oil and gas prices shouldn’t prevent the development of alternative energy sources.” (Huh? If new products are too expensive for the market to bear, then, logically, no company will develop them.)
“Palin also called for the development of clean-coal technology.” (What does she know that engineers and MBAs don’t? There is not a viable commercial clean-coal plant in America today. The technology is not price competitive.)
By embracing unrealistic alternatives that the market has rejected, Democrats and Republicans inevitably wind up at the same conclusion: More government intervention to pursue the mirage of energy independence.
And that, Reason’s Dalmia writes, means the world’s richest nation is setting itself up to relearn the lessons of the Third World. “In their zeal for economic self-sufficiency, (developing nations) embraced something called the import-substitution approach half a century ago,” says Dalmia. “The upshot, however, was neither self-sufficiency nor prosperity. Rather, import-substitution raised production costs, making Third World goods uncompetitive in the global markets and prohibitively expensive at home, consigning these countries to decades and decades of economic stagnation that has not yet been fully reversed. Delinking America from global energy markets will wreak similar economic havoc.”
Do we really need to relearn those lessons?
Possessed by Third World envy, Washington pols have been beating a path to inferior systems on the energy front — including a wave of delegations to Brazil seeking wisdom from its statist ethanol policies.
Words, like ideas, have consequences — as Chris Horner notes below: narratives matter — and the reckless populist sloganeering of the 2008 campaign will be haunting us for some time to come.