Washington politicians live in an alternate universe

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The hysteria in Washington over gasoline prices restores my faith in the two-party system.

I always had faith that both parties were run by idiots. And this proves it.

Leaders of both the Democrat and Republican parties have been holding media events over the past few days trying to convince the American people that they, and they alone, have the magic formula that will both cut gasoline prices and reduce dependence on foreign oil.

Great idea. Except for one minor detail: The lower gasoline prices go, the more gasoline Americans will consume. And the more gasoline we consume, the more oil we have to import.

America today produces just a fraction of the oil it consumes, and that is not going to change no matter how much we drill. President Bush was on TV the other day touting the wonders of opening the Arctic National Wildlife Refuge to oil drilling.

“If ANWR had been law a decade ago,” Bush said, “America would be producing about a million additional barrels of oil a day, and that would increase our current level of domestic supply by 20 percent.”

Sounds lovely, but even if ANWR oil started flowing tomorrow, domestic oil production would still fill only about a third of our needs, a federal study shows. So how will we make up the difference? Alternative fuels, Bush said.

“I set a goal to replace oil from around the world,” Bush said to applause from the agribusiness crowd. “The best way and the fastest way to do so is to expand the use of ethanol.”

The audience clapped but only because the chairs were filled with agribusiness executives. If the seats had been filled with economists, they would have laughed. If ethanol could be produced more cheaply than gasoline, we’d be using it already. Neither ethanol nor hydrogen nor any of these so-called “alternative fuels” is an alternative to $3-a-gallon gasoline, which is cheap by international standards.

But you can hardly blame Bush for sucking up to the agribusiness crowd. The Democrats also spent the past few days promising to turn every corn farmer into an energy baron. And the Democrats also demagogued the price issue. One of the worst offenders was U.S. Sen. Bob Menendez, D-N.J. He sent out a press release demanding to know why Americans are now paying about $2.92 a gallon for gasoline when just one year ago a gallon of gasoline cost a mere $2.22.

What could account for that 32 percent price hike at the pump since last year? Hmm, perhaps it’s the 50 percent increase in crude-oil prices over the same period. With crude oil prices at an all-time high of $75 a barrel, only a politician could feign ignorance about why gasoline prices are also going up.

Menendez said the prices reflect “an act of greed” by Big Oil. But Tom Kloza of Oil Price Information Service in Lakewood, N.J., broke down the price for me. The crude oil in a gallon of gasoline costs about $1.70, Kloza said. State and federal taxes add an average of 46 cents. Refining adds 54 cents. In other words, that gallon of gasoline would cost you $2.70 even if the oil companies didn’t have to ship it, market it and sell it. But they do.

Don’t worry. Menendez has a solution. He wants to suspend the federal gasoline tax of 18.4 cents a gallon for 60 days. Many Republicans also back this idea. But it’s idiotic. If we start cutting the gasoline tax every time prices go up, drivers will never have to economize. They can keep buying those giant gasoline guzzlers that make Detroit executives and al-Qaida terrorists happy.

“When you step back from it, part of the answer has to be to cut down on consumption,” Kloza said. “No one has made the argument that our consumption is underwriting the terrorists in some of the most godforsaken places in the world.”

Well, no one in Washington anyway. I have never heard a single American politician tell the truth about energy independence. And the truth is, we already know how to achieve it: Tax the hell out of gasoline and build lots of nuclear power plants.

But the Democrats hate nukes. And the Republicans hate taxes – even though conservative economists agree that the gasoline tax is the most desirable of all taxes. And neither party wants to be the first to tell the public that cheap gasoline is too expensive for the American economy.

“The answer to this is to ask the public to recognize that we as a country are somewhat piggish on the consuming side,” Kloza said. “Part of the solution has to be consuming less, but there’s no political capital to be made from that.”

Well, not in Washington anyway.

Paul Mulshine is a columnist for The Star-Ledger of Newark, N.J.

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