Gassy Emissions At The Times

The NY Times gasoline price editorial today, "Pander At The Pump," is directed at the myriad panderers in Congress who seem to be falling all over each other in an effort to be seen as the "savior" on gas prices.  The Times problem is that they don't offer any rational solutions, and the only one they dismiss outright is the one that might ultimately help the most.  They also don't let any opportunity for Bush-bashing pass them by.

The battle to see which political party can out-pander the other on the subject of gasoline prices is embarrassing. If American consumers are having sticker shock at the pumps, it's because of a series of policy failures that stretch back decades. The last thing the country needs now is another irresponsible quick fix.

Agreed.  Unfortunately, when they talk about policy failures they are not talking about the lack of new refineries or drilling sites, like ANWR.

The editorial then dismisses as inconsequential both the Republicans' tax rebate proposal and the Democrats' temporary gas tax holiday.  And they are.  And the efforts to root out *horrors!* price-gouging are denigrated as mere photo-ops.  And they are.

The editors don't like the concept of "suspending environmental safeguards," calling it  lower prices "at the price of dirtier air."  But that's not quite what the President proposed.

The President Is Directing EPA Administrator Steve Johnson To Use All His Available Authority To Grant Waivers That Would Relieve Critical Fuel Supply Shortages - As He Did After Last Year's Hurricanes. Under Federal air quality laws, some areas of the country are required to use a fuel blend called reformulated gasoline. This year, we are undergoing a rapid transition in the primary ingredient in reformulated gas - from MTBE to ethanol. State and local officials in the Northeast and in Texas worry that supplies could run low. To ensure that there are not needless restrictions to get gasoline to the pump, the EPA should be able to meet the request of officials seeking to waive local fuel requirements on a temporary basis. (my emphasis) If Administrator Johnson finds he needs more authority to relieve the problem, the Administration will work with Congress to obtain the authority he needs.

The President Is Also Directing Administrator Johnson To Bring Together Governors To Form A New Task Force To Confront The Larger Problem Of Too Many Localized Fuel Blends (Boutique Fuels). America's uncoordinated and overly complex set of fuel mixes raises the risk of painful local price increases, even during only minor supply disruptions.

So the change is to return to using MTBE in reformulated gas in some areas, rather than ethanol, and not to discard the use of reformulated gas entirely.  And the boutique fuels do increase the cost of refining and make moving supplies to meet demand very challenging.  Continuing on:

The main problem is not environmental regulations or even rapacious oil companies. It certainly isn't the fact that the Arctic National Wildlife Refuge has been kept off limits for drilling. Americans' outsized demand for oil and gasoline pushes up prices, and now that the economies of huge countries like China and India have taken off, there will continue to be more competition for the world's available oil. There are policy solutions for the problem of excess demand, chief among them higher fuel economy standards. But more than five years into the Bush administration, there has been only a minuscule increase in mileage standards for S.U.V.'s and no increase for cars.

There are several problems with this paragraph.  The Times needs to explain why keeping ANWR off limits for drilling isn't part of the problem.  Politicians pontificate endlessly about our need for "energy independence" with less use of foreign oil.  Well, ANWR is an untapped source of domestic oil, and the Times brushes it off.

They do nail the fact that global demand is increasing as the huge economies of India and China are becoming more industrialized.  But their big solution is higher fuel standards for cars.  Let's leave aside the fact that it takes some time for increased fuel standards to show up in reduced usage, as people don't just run out to buy the more efficient car once the standard is raised.  Those newer cars cost more, as they are a) new and b) require more research and re-tooling to produce the higher standards.  This takes money from one pocket - gas prices - and puts it into the other pocket - car cost.  The visible station signs might show slightly lower prices, but the consumer likely won't feel it.

The editors find windfall profits taxes appealing, but those costs would only be passed onto the consumer as well.   Then the editors jump the shark:

But their problem is more than gasoline prices. It's their vulnerability to the price increases, which results from stagnating wages and a lack of savings. If the Bush administration had devoted as much political capital in the past five years to wage and job growth initiatives as it has to cutting taxes for the wealthy, these struggling families would be better able to weather higher prices at the pump.

Give.  Me.  A.  Break.  Let me point the Times to it's own page one story today.

Gas prices are rising, as are mortgage rates. House prices in many once-hot markets have started slipping. The American automobile industry shows no sign of recovery. And the paychecks of most workers have not even kept up with inflation over the last four years.

Yet the national economy continues to speed ahead, with families and businesses spending money at an impressive pace. Forecasters expect the Commerce Department to report this morning that the economy grew at a rate of around 5 percent in the first quarter, the biggest increase since 2003.

The industries leading the way are ones that have been receiving far less attention than cars or real estate, though they have been adding thousands of new workers each month. In the last year, hospitals, doctors' offices and other health care employers have created almost 300,000 jobs; restaurants have added 230,000; and local governments — including schools — have added 170,000.

A diversified fast-growing economy with broad-based job growth, and the Times is whining about "tax cuts for the wealthy."  Note to the Times: Those tax cuts?  They are "wage and job growth initiatives," and they worked, big time.

Politicians may pandering to the consumers with their current proposals for easing the "crunch," but at the Times they're pandering to an even smaller group - liberal Democrats.

4/28/06 1500: Speaking of flatulent reporting, Slapstick Politics takes apart that front page story on the growing economy and gives the Times a proper re-write, eliminating the ill wind. (hat tip: Ace)

4/28/06 1700: It's not only journalists who fail economics.  Some politicians could use a refresher it seems.