Back on the Soapbox and Talking Sense to the Senseless

Over the past 24 hours I have been engaged in a Facebook comment war with a friend of mine who posted this:

TF: More government oversight and most likely the end of off-shore drilling... obama's administration is a joke

I, of course, couldn't help but stick my nose where it didn't belong.

Spencer: Oh Heaven forfend! What ever shall we do! How DARE those Communists try to impose their rules on our oil companies! I mean, it's not like the oil companies photocopied the same "emergency response plan" and passed it around to placate a bogus regulatory authority. Okay, so BP's plan to deal with the PR fallout from a spill was longer than their plan to actually deal with the spill, but we'll be damned if those big spenders want to waste our money on protecting the environment! Much better to spend it on a laser plane!

And then it snowballed from there.

TF: This is going to get cleaned up inspite of the government, just like Katrina was dealt with inspite of the government. And you know darn well that Obama is glad over this opportunity to shut down oil drilling and press costly alternatives (most likely run by the govt) down the people's throats.

Spencer: This oil spill has gotten worse and worse because BP is trying to collect the oil rather than just stop the flow, because unless they can recover it they'll most likely go under. This will not get cleaned up without the government. And without the government stepping into the reparations process, thousands of people in the Gulf region will get screwed with their pants on. Again. And do you really believe that during a time of national crisis the President of the United States is happy because it means he'll have an excuse to pull one over on the American people? Hmmm... that kind of reminds me of someone... Who could it be? Oh yeah, it was George W. Bush after September 11th!

TF: O yeah, lets compare thousands of people dying in one of the most shocking days of american history to this...thats low. And stopping the flow is the aim. It is near impossible though as Obama even admitted. Its going to take a lot of minds to stop this. And no, BP will not go under by not recovering this oil. The only way they go under is if the current Congress and Administration strangle BP to death.

Spencer: I was not equating the two events, obviously they are not even in the same hemisphere. I was equating your accusation of how President Obama reacted to the spill to how President Bush reacted to the attacks. You say Obama wants to use it to force alternative energy down our throats, I say Bush used his crisis to lead us into an unneccessary and pointless war against a country that had no part in attacking us.

And with tens of thousands of barrels of oil leaking per day and the claims of Gulf residents mounting, there are serious questions as to BP's ability to remain solvent through this crisis.

TF: Questions including how can they pay all the workers that are currently now not working thanks to the "moratorium" on drilling for 6 months. Also, entering the war in 2001 was supported by an overwhelming majority. Obama's actions will have no such support and will have heavy scrutiny from the start

Spencer: I was never part of that majority, thankfully, and the Iraq war only had support because we were told there were WMDs. Anyway, I don't see what's so bad about the government taking steps to get us off of oil. I really don't think that that's a top priority right now, but I'm sure it will be one the immediate crisis is contained. Alternative energies are a chicken and egg problem. People can't adopt alternative fuels (by driving hydrogen or electric cars, for example) until automakers make those cars. Automakers won't make those cars until the infrastructure (fueling stations) is in place. But no energy companies will build the infrastructure until automakers make the cars. This is a perfect example of an economic situation where the market has not failed but the proper incentives are not there to spur new development. I think we can all agree that moving away from foreign oil (and eventually all oil) is in our long-term interest as a nation and a world. But until the proper incentives exist, there will not be much innovation when it comes to taking the concepts and engineering side projects that companies show off at trade shows and putting them on the road. It seems to me that there are two options: more tax breaks for alternative fuels, and increasing the gas tax to a point where demand for alternative fuels rises. Both of these, obviously, require the government getting involved in the market. Both of these would produce a positive outcome in which demand for alternative fuels rises and provides the right incentives for automakers and energy companies to invest in putting new technology on the road. So why is this such an issue, other than because some people just like driving Hummers and don't want to have to pay more to do it?

TF: Sorry, but an increased gas tax would not hurt those driving hummers, but those of us like you and me the most. Do you have an extra 40,000 or so dollars laying around to go buy a new hybrid or energy efficient car? I know I dont. Plus, I thought Obama wasn't going to increase taxes on the middle class? A gas tax would definitely hurt our economy even more.

Also, alternative energy sources can only work in some places, an only if it is the cost-effective choice. I do believe we talked earlier in the school year about how BP's solar company in frederick shutting down was basically a result of the fact that it could not produce a product that was economically viable to the public.

The Government is not the answer to all our problems. But the Obama Administration sure thinks that they are. We are in trouble

Spencer: You're making my point for me. Alternative energy has to be the cost-effective choice or else people won't demand it and companies won't invest in it. That is the point of tax breaks for hybrid cars and investments in alternative energy combined with an increased gas tax.

Gas will become economically unfeasible for the average person eventually. One day, oil will be so scarce that the price of gasoline will be through the roof and that $40,000 hybrid (Honda sells one for $20,000 though) will pay for itself in no time. Are we going to wait for that to happen? Because by then we'll have ravaged the environment and most likely waged several large-scale wars over oil. Or we can modify the conditions in the market now by making alternative energies more economically advantageous for automakers, energy companies, and consumers. I'll take the latter.

TF: So you will take the government basically fixing the market, which will screw over the millions of people currently earning a living because of oil, causing all of us to go get new energy efficient cars and overhauling any current houses currently relying on oil for heat (like mine)? I'm sorry, but all of this within at least the next 10 years is just not feasible, especially for the nearly 10% unemployed (or is it more, i havent seen the number recently) and our country which is still recovering.

The market will naturally turn towards renewable and efficient energy when the time is right (just as it is already doing with wind energy in florida). But the government should not be the ones to initiate such an overhaul unless they want to pay for all the costs associated. O wait, the government does not have any money because their money is yours and mine.

TF: It looks like we the people lose regardless

Spencer: Sometimes that's how it goes. We spend about $1.5 billion per day on crude oil. That's not an easy habit to kick.

TF: divided by how many people use it a day? For the next decade or so while we have it, that is the cheapest source of energy for the people. As it starts to run out, it will naturally be more cost effective to switch to other sources (which at that time, companies will have realized new sources of energy will definitely be the way to go and they will be ready and set up for the transition)

Spencer: I understand that but I don't see why we need to leave it alone and let oil run itself out when we can make changes to move away from it now. Global warming is a reality, political tensions over oil will only get worse as it gets more scarce, so why not start making other fuels more economically attractive now? We will have to endure the pain of higher fuel prices at some point. Yes, it will hurt the middle class more than the wealthy. But why not now? Why is it better to wait and let our environment get worse and remain beholden to countries run by people who want to kill us. Let's just suck it up, bite our collective lip, and pay an extra buck for a gallon of gas. We'll be better off for having done it.

TF: That extra dollar a gallon can be much better used for other things right now. I say we trust the market. Energy companies (old and most likely new ones) will know when oil is no longer a wise choice. If old companies dont create new sources down the road when oil prices will rise for good due to its scarcity, new companies will sprout upmarketting new forms of energy which will then be naturally the cost effective choice. Manipulating the market and telling the people it is for our own good is wrong. I am surprised you would be in support of such a thing.

Spencer: Unless you're an anarchist, you believe that on some level it is right for the government to manipulate the market and tell people it's for their own good. Child labor laws are a manipulation of the market. Those laws drive up prices by reducing competition in the labor market and removing a pool of unskilled workers who could be employed cheaply. But nobody has a problem with child labor laws. Most people support the existence of the minimum wage, the progressive tax code, social security, medicare, and the list goes on and on and on and on. Everything the government does manipulates the market in some way. There is nothing wrong with manipulating the market. We slayed that sacred cow long ago, and for good reason. The government is a part of the market just like we are. The market will shift us to alternative energy, but not before the world goes through an environmental and political crisis because of oil. We can stop that from happening by making changes that encourage the switch now rather than when we're standing on the brink of World War 3.

TF: Child labor laws go hand in hand with the law requiring children to go to school. This is a far greater manipulation by the govt then those things you just listed. As for World War 3, I would say that is very possible but not soley based on oil. Like i said, some new companies will spring up with clean renewable sources a year or two prior to such a war over oil, and those new companies will take over the energy market just like exxon and BP today.

Spencer: You think a higher gas tax would have a greater effect on the market than social security, medicare, and requiring a higher percentage of income to be taxed as income rises?

Anyway, we can keep doing what we're doing, wreaking havoc on the environment and hoping that the market fixes our dependence on oil before we go to war over it (I don't believe it will), or we can make the change now. And even if oil doesn't force us into a global war, it is, as I write this, funneling billions of dollars into the hands of countries like Iran, Iraq, Libya, Venezuela and Saudi Arabia. We are funding governments that fund terrorism and publicly denounce the United States because of our dependence on foreign oil.

TF: yes, a flat tax increase on gas definitely has a greater effect on the market that the tax brackets because everyone will be paying the same amount, and the middle and lower class will be hit way harder (although a flat tax isn't a bad thing, but on gas it is)

A flat tax increase on gas, like you said, would lead to new forms of energy eventually. However, the lower and middle classes would not have the money to go out and get the new forms of renewable energy, and the upper class would just go on and buy the gas with the tax not effecting them.

And last I checked, Venezuala, Saudie Arabia, and Libya don't really have the means to do much of anything. Iran, I am sure we are keeping close tabs on and we basically run Iraq and we won't pull out of there until we are sure they have a stable gov't set up.

And yes, the market will ultimately fix our dependance on oil at a much lower cost than Pres. Obama will try to shove down our throats

Spencer: 15 of the 9/11 hijackers were from Saudi Arabia, the second largest source of oil imported into the United States. Libya was responsible for the deaths of 270 people when Pan Am 103 blew up over Scotland. Venezuela, the fourth largest source of our oil, is fast becoming a communist dictatorship. So you may want to check again. Aren't Republicans always accusing Democrats of being soft on national defense? We're the ones saying that maybe it would be a good idea to stop sending money to people who are actively trying to kill us, especially considering that while we were doing that we then ran the national debt and budget deficit through the roof waging the so-called War on Terror when its quite possible that the threat of terrorism would be much less severe if we weren't funding the terrorists.

And yes, a rise in the price of gas hurts the poor more than the rich. But even if we leave this to the free market, eventually the price of gas will rise due to its scarcity and that rise will still hurt the poor more than the rich. There is no way around the fact that when prices rise it hurts the poor more. So the only question is, do they have to endure it now or later? Considering that enduring it now means helping to slow global warming, creating millions of jobs inside the country creating and building new energy plants, technology, and infrastructure, and making the country safer by cutting off the flow of money to terrorist organizations and rogue nations, I say do it now.

TF: We can go round and round. The fact is, you say do it now. I say let it happen because it will work out eventually. You say increase gov't intervention, I say it should stop now because the gov't will only keep gettting more and more involved with private industry.

The amount of gov't involvement is already too much for my liking, but it will only continue to get bigger. Who knows what other crisis will occur down the road. Are we just going to turn to the gov't for the answers for everything? The American people are smart, we can figure things out for ourselves. That is why come November, there is definitely going to be a shift toward the people slowly starting to take some control back. The gov't was originally set up for national defense and regulate the currency. Now? It has a hand in everything. It's time to ease back the influence of gov't and it can only start when the people say enough is enough. It certainly won't happen with the gov't stepping in for every single "crisis", and then totally blowing an industry (oil) out of the economy for one freak accident.

How many oil rigs do we have? A heck of a lot. How long have we been drilling for? A long time. I'd say we are lucky to have only one accident of this size. But now saying that all the oil drilling has to stop because of one accident is totally overblowing the problem. It was an accident, but you dont shut down everything for 6 months. Did we shut the country down after 9/11 for 6 months? We didnt even shut down for a day. And anyone would say that 9/11 dwarfs this.

My point is simply that this was an accident, granted BP shouldnt of cut corners in trying to go faster, but I am sure they won't let it happen again because the definitely don't want to pay out the billions of dollars in claims the gov't is making them pay (which I don't see how they can be made to do this legally in the first place).

Spencer: It's legal because companies are liable for damage just like people are. If I crash my car through your front door, I have to pay for it. So when BP takes away thousands of people's livelihoods, they have to pay them lost wages and damages. It's the whole point of civil law. The only question is whether the spill warrants criminal charges as well, which would be criminal negligence in this case.

And to be honest I just don't understand the idea that all government is bad. Government is a prerequisite for a civilized society. Taxes are the price we pay for that civilized society. Government is not the solution to all of our problems, but it can help in many ways. The free market had senior citizens starving to death. The government created Social Security. The free market created the richest men the world had ever seen (Rockefeller, Carnegie, Morgan). The government created the progressive tax code. The free market gave us the great depression. The government gave us the Federal Reserve.

The market is a powerful thing. But all that a market system means is that people control the means of production, set prices, and are free to choose from the options available to them. Taxes don't make a market less free, nor does government spending. They are just a part of the market. Just like how Warren Buffett has the power to move the stock market, the government has the power to move the economy. The unfettered free market often gives us outcomes that the majority of people do not want, which is natural given that it is a Darwin-esque system. Naturally, all of the wealth in a completely free market tends to accumulate in the hands of the few. It is when the market produces undesirable outcomes that the government's role becomes important. Because of its powers to tax and spend, the government has the power to influence the market and produce the outcomes that the majority of people want.

The free market system is like a supercharged 454 motor. That's why it produces better outcomes than communism, because central planning is so inefficient that it's more like a go-kart motor. But if you have an engine that powerful without steering and brakes, you usually end up crashing. That's the role of the government.

TF: Can you not see that the government is taking an increasing role in society? Where will the line be drawn? I would love to see the gulf coast states governors stand up and take control of this situation just like Arizona has done with immigration. I just want to know how far you are willing to letthe government go until you say enough. Will it already be too big by then to do anything? I say enough now and we need to start drawing the boundaries of federal govt again. After all, it always boils down to federalism and states rights.

Spencer: You can't just draw some arbitrary line. You look at each situation and look at the choices and the outcomes and decide what the best option is, just like with everything else. And I know you agree with me. You and I just have different ideas of what the government should and shouldn't do. I think the government should protect consumers frompredatory lenders and force oil companies to clean up their spills and prevent frivolous lending practices and lax oversight from plunging the country into a recession. You think that they should ignore all of that because personal choice is important. That is, of course, unless the choice has to do with who you marry or what you can do to your own body or what your children learn in school. Republicans don't believe in small government. Libertarians do. You guys just have your priorities all screwed up.

TF: Lol. oook. lets just see what kind of shape we are in after obama and his cronies cycle through. i garuntee we will be worse off than with bush. That is why real change is coming, not that fake change obama preached like a want to be MLK.