The Corner

McCain’s Drilling Flip-Flop Is a Good First Step

Warts and all, John McCain’s flip-flop on offshore drilling is a very welcome development. When circumstances change, political leaders should change their policies. And $4 at the pump and $140 in the open market is certainly enough changing circumstances to warrant McCain’s constructive shift on offshore drilling. Regrettably, McCain still talks about the “pristine” ANWR patch. But he’s just not gonna move on that.

Obama, meanwhile, is repeating the tired old Democratic response that there’s no way offshore drilling will lower prices now. But he is wrong. And McCain has an opening here if he’d only stop his silly attacks on “reckless speculators.”

The Arizona senator doesn’t know anything about speculators or investors or commodity trading or any of that stuff. The reality is, should Congress overturn its offshore-drilling moratorium, those very same speculators are gonna start selling crude-oil futures contracts and price declines will filter backwards from the longer-term contracts to the cash market. In other words, what can be bought will be sold. If drilling expectations change on the hope that future oil supplies will rise, prices will adjust lower and it will happen fast.

This is what Obama doesn’t understand. It’s also what McCain doesn’t understand. Price changes are pulled forward in response to shifting oil-supply policies. Ironically, one of McCain’s senior economic advisors, Kevin Hassett of the AEI think-tank, has just written a column on this very subject. So I don’t know who McCain is talking to, but he ought to talk to Kevin Hassett, who is a very smart guy.

Regarding the investigation of commodity futures undertaken by the CFTC, acting chairman Walter Lukken has said they have not found a smoking gun. And this whole exercise in investigating traders reminds me of the nonsensical investigations of so-called price gouging, which for decades have come to nothing.

In addition, McCain should get off this “obscene profits” song about oil-company earnings. Obscene profits are the near cousin of the windfall profits tax. Once again that puts McCain on the liberal-Democratic side of the issue. What you don’t want is to deter oil drillers and producers from going into new fields offshore and onshore if Congress lets them.

One reason for all this is economic growth and jobs. A Wharton Econometrics study (hat tip to Mark Perry at Carpe Diem) shows that total employment at full production in ANWR would come to 735,000 new jobs created across the country, not just in Alaska. So not only would offshore drilling and ANWR and other domestic sources of energy reduce prices, they would also be huge job creators to spur the economy. This is something McCain should push.

Finally, President Bush made a very strong statement today to lift the moratorium on domestic and offshore production. In his statement he emphasized the oil-shale fields in the Green River Basin of Colorado, Utah, and Wyoming. There is the equivalent of 800 billion barrels of recoverable oil in this area, more than three-times larger than the proven oil reserves of Saudi Arabia.

Now get this: Bush charged that in last year’s budget bill Democrats inserted a provision blocking oil-shale leasing on federal lands. That’s unbelievable. McCain should pick up on that point, too. That oil shale could create another million jobs, bringing oil prices back down to about $75 a barrel and pushing gas pump prices way down as well.

Onshore, offshore, oil shale. The mantra here is drill, drill, drill. Oil, jobs, and the economy may determine this year’s election. Sen. McCain has made a very good start but he has much more work to do.

Larry Kudlow is the author of JFK and the Reagan Revolution: A Secret History of American Prosperity, written with Brian Domitrovic.

Most Popular

Elections

How Trump Should Approach the Final Debate

The so-called mainstream polls of the swing states show the race narrowing. If the trend continues at the current rate, President Trump could poll even in two weeks—in addition to the “other” polls that show him near there already. So Trump’s mission at the final debate on Thursday is to continue to ... Read More
Elections

How Trump Should Approach the Final Debate

The so-called mainstream polls of the swing states show the race narrowing. If the trend continues at the current rate, President Trump could poll even in two weeks—in addition to the “other” polls that show him near there already. So Trump’s mission at the final debate on Thursday is to continue to ... Read More
Politics & Policy

A Bizarre and Revealing Biden Interview

William Voegeli of the Claremont Review of Books brought up a strange Joe Biden interview from 1974 I hadn't seen before in which Biden emerges as arrogant and determined to make more money, one way or another. Biden also speaks of his first wife Neilia, who had died two years earlier, in unusually frank ways: ... Read More
Politics & Policy

A Bizarre and Revealing Biden Interview

William Voegeli of the Claremont Review of Books brought up a strange Joe Biden interview from 1974 I hadn't seen before in which Biden emerges as arrogant and determined to make more money, one way or another. Biden also speaks of his first wife Neilia, who had died two years earlier, in unusually frank ways: ... Read More

The Pollster Who Thinks Trump Is Ahead

The polling aggregator on the website RealClearPolitics shows the margin in polls led by Joe Biden in a blue font and the ones led by Donald Trump in red. For a while, the battleground states have tended to be uniformly blue, except for polls conducted by the Trafalgar Group. If you are a firm believer only in ... Read More

The Pollster Who Thinks Trump Is Ahead

The polling aggregator on the website RealClearPolitics shows the margin in polls led by Joe Biden in a blue font and the ones led by Donald Trump in red. For a while, the battleground states have tended to be uniformly blue, except for polls conducted by the Trafalgar Group. If you are a firm believer only in ... Read More
Media

Jeffrey Toobin and Our Public-Hate Ritual

Oh, Jeffrey Toobin — let him among us with a free hand cast the first stone. Toobin, a writer for The New Yorker and fixture on CNN, was participating in a role-playing exercise on a Zoom call with his magazine colleagues, wargaming election-night scenarios. Toobin was standing in for the courts when he ... Read More
Media

Jeffrey Toobin and Our Public-Hate Ritual

Oh, Jeffrey Toobin — let him among us with a free hand cast the first stone. Toobin, a writer for The New Yorker and fixture on CNN, was participating in a role-playing exercise on a Zoom call with his magazine colleagues, wargaming election-night scenarios. Toobin was standing in for the courts when he ... Read More
Elections

Biden Is Still Underperforming Hillary

On October 20, 2016: Hillary Clinton was up 6.8 in the RealClearPolitics average in Pennsylvania. Today, Biden is up 3.8. (that race only tightened to 2.1 in the last week of 2016.) Clinton was up twelve points in Michigan on that day. Biden is up 7.5 right now. Clinton was up 6.5 in Wisconsin. Biden is ... Read More
Elections

Biden Is Still Underperforming Hillary

On October 20, 2016: Hillary Clinton was up 6.8 in the RealClearPolitics average in Pennsylvania. Today, Biden is up 3.8. (that race only tightened to 2.1 in the last week of 2016.) Clinton was up twelve points in Michigan on that day. Biden is up 7.5 right now. Clinton was up 6.5 in Wisconsin. Biden is ... Read More