Art/Photography Credit: Licensed Under Creative Commons

Greenbacking: An Interview with Cato’s Jerry Taylor

Tawdry Details:

0 Comments »

Print »

Subscribe »

Share on Facebook Digg it! Tweet it! Stumble it! Email it!

* All fields are required *

To
From
Subject

1. Send Email »

As summer has gone the way of the dinosaur, it has also gone the way of petroleum, and the price of gasoline has defied the seasonal dive it tends to take yearly. To be clear, the price of gasoline at Chicago’s Mobil stations rose ten cents in October and remains constant—after not fluctuating by a cent from June to September. Gas is too expensive, and electricity has followed suit; if the recession does not tire soon enough, Americans may start burning the wood of their floorboards to warm their toes during the winter. Meanwhile, like they always do when energy problems and their connected environmental issues arise, citizens are calling for governmental intervention, hoping that the new administration will be more receptive to their pleas.

Yet many foresighted analysts wag a cautionary finger at these citizens. Governmental regulation is, they say, somewhere between “ineffective” and “malicious.” Unquestionably, the American Mecca of free-market economics is the Cato Institute, located in Washington, DC. Striving to inform Americans of the effects of governmental intervention, often to many Americans’ distaste in the current political climate, Cato fervently seeks to widen the debate on public policy to include the more trenchant, long-term consequences of legislation.

I recently had the privilege of sitting down with Jerry Taylor, a Senior Fellow at the Cato Institute, to discuss the government’s role in the energy market. Taylor, one of the most influential critics of federal energy and environmental policy, is a frequent contributor to major news networks, appearing regularly on NBC, CNN, BBC, and Fox News; his op-eds on public policy have graced the pages of newspapers, journals, and magazines across the country. He is a member of the International Association for Energy Economics, and he has served on several Congressional advisory bodies, testifying on Capitol Hill at crucial junctures of political decision-making.

Igor Sadovyi: Hailed as a huge success by the Obama Administration, the “Cash for Clunkers” initiative led to a notable increase in automobile sales for automakers. Yet some are saying that the environmental effect, at which the program was targeted, was negligible. What is your opinion on “Cash for Clunkers,” and should we expect to see similar initiatives in the future?

Jerry Taylor: It was really a stupid policy, but a very popular one, meaning we’ll likely see more of these stupid yet popular policies. There’s a mountain of academic works that have slapped around “Cash for Clunkers” by quantifying costs and benefits, finding that this is one of the worst government programs in modern history. A lot of those tabulations are being done by non-ideological sources like the University of California Energy Institute, a place where you wouldn’t expect to find slash-and-burn campaigns against governmental policy.

IS: As American drivers continue to spend inordinate amounts of money on gasoline, questions are being raised regarding the levels of federal gasoline taxes. In the past, you have advocated for the abolition of these taxes. What, in your judgment, is fundamentally wrong with having federal gasoline taxes, and what would getting rid of them accomplish?

JT: They’re not correcting any externalities: Whatever problems you find without the tax will be around with the tax. If your issue lies with pollution from cars, then tax pollution; it’s more direct, and more effective. If you want to reduce dependency on foreign oil for reasons of national security, then you tax foreign-oil imports. You don’t tax gasoline; that gets nothing accomplished.

IS: What is your view on current and proposed cap-and-trade programs, on their benefits and their shortcomings?

JT: That’s a big question. The simple answer is that the cost associated with a cap-and-trade program outweighs the benefits. It is obvious if you just look at the benefits that occur from US gas emissions: If you try to run those emissions through climate models, you’ll find that temperatures are reduced by just a fraction of a degree Fahrenheit—nothing of consequence. The benefits are virtually immeasurable. The cost, depending upon whom you ask, is either small, medium or large. Any cost, be it small, medium, or large, is going to be greater than an unquantifiable benefit.

(0 Comments) | Join the Discussion »