Senator Jeff Bingaman’s request for the Congressional Business Office (CBO) to study the impact of reduced demand on our nation’s energy security proves that there really is such a thing as a stupid question. Ever ready to provide the fig leaf of legitimacy for any congressional absurdity, CBO decided to answer the request without even attempting to provide an analysis of the economic impacts the nation would incur as a result of socialized controls on energy consumption. Their product explains: “This report examines the ability of some commonly proposed policies to decrease those costs, but it does not evaluate the costs or benefits of implementing those policies or how well they would address other objectives” (p. v, Energy Security in the United States, May, 2012).
The specific market interventions analyzed to control consumption include higher taxes, increased public transportation, and government edicts regarding fuel efficiency. With the caveat in place that they will not examine the broad economic impacts of reduced consumption — consumption being a major factor of production for much of the nation’s goods and services — CBO concludes, almost comically, that reduced energy demand will make the nation less vulnerable to supply disruptions. In related news, the sun also rises. Senator Bingaman touts the unassailable scientific proof of his presupposition, “As many experts, and now the CBO, have repeatedly observed, every barrel of oil that we avoid using in the U.S. transportation sector makes our economy stronger, not to mention our personal pocketbooks, and less vulnerable to the volatility of the current marketplace.”
The only trouble is that the report does not show that decreased consumption makes our economy stronger. CBO was only addressing the obvious fact that those who consume less are less impacted by a market change. Did we really need a government study to tell us the obvious? Then again, Senator Bingaman has demonstrated of late his great need for remedial instruction in economics. Of course, taxpayers have a right to know how much money Senator Bingaman’s continuing education is costing them, and perhaps they should ask the good senator to compensate the federal treasury for this monumental exercise in futility.
As for whether increased supplies would also make us less vulnerable, the CBO turns somersaults to discount this benefit by assuming that foreign suppliers would make adjustments to reduce world supply and negate any price adjustment. Never mind whether the economic benefits to the nation in terms of jobs and government revenue are worth allowing capitalistic incentives to work. Bring on the taxes, fuel-efficiency mandates, and more government spending on infrastructure — perfectly timed to coincide with a bipartisan congressional committee’s efforts to iron out a multibillion-dollar transportation bill.
According to the CBO, the federal government must do all they can to keep oil prices from dropping. Otherwise, consumption will get dangerously high (p. 25) because wasteful consumers don’t have the good sense to cut back their energy usage. No, they require assistance from nanny-state bureaucrats to help them decide whether they need a car, a truck, or a heavily subsidized bus or train ride. Like health care, energy policy is far too important of a national concern to allow the consumers — and voters for that matter — determine what’s in their best interests.
Senator Bingaman (soon to be former Senator Bingaman) clearly wishes to tie his political legacy to solar-powered trolleys, and hopes that his lasting political bequest to the American people is a world free of oil. But common sense tells Americans that petroleum, an organic fuel, will power cars and trucks for the foreseeable future. Senator Bingaman and the CBO do us all a great disservice with reports that add nothing to the national debate, put not one additional American back to work, and in fact further weaken our great nation with threats of more government intervention in the energy market.