Econ 101: The CliffsNotes

A refresher course on economic principles for the right

Posted by Jason D Scorse (Guest Contributor) at 9:23 AM on 18 Jul 2008

Read more about: politics | economy | George Bush | fossil fuels | energy efficiency

The other day, President Bush, in response to a question as to why he has not pushed more for energy conservation, responded that the American people are smart enough to figure it out on their own. This prompted conservatives at the National Review to call for a "Dubya-Love Moment" in honor of what they perceived as the straight-talking truth!

It is truly amazing that a philosophical movement once filled with some of the smartest minds in economics now wears economic ignorance as a badge of honor.

So here's how to respond to those on the right who still don't get it that energy policy requires government intervention, and not just blind faith in markets:

People can't choose to take public transportation if it doesn't exist; we need government policy to make better public transit options.
One of the biggest obstacles to a national renewable energy platform is the lack of inter-state transmission lines in key areas; this requires government approval and investment.
The current price of fossil fuel energy is still too low; it does not include the costs of CO2 damage and the military costs of protecting pipelines; markets can't work right if prices are wrong and only government can correct the prices for fossil fuels.
Government is the biggest buyer of energy in the country so changes in government procurement policies have big impacts on energy markets.
Businesses may hesitate to invest in alternative energy if they think the price of fossil fuels be go back down and therefore undercut their investments in alternatives; by government providing a price floor for fossil fuels this risk can be mitigated.
It is also good to remind those who blindly think that the market always works that if we had followed the advice of environmentalists and economists decades ago, we would've been able to make a smooth transition to our energy future and the money for $4 gas would be going largely into U.S. coffers instead of the hands of our enemies; i.e. the lack of government energy policy has been a national security disaster.

And the list goes on and on. So please, if you encounter any people on the right who suffer from the "free-market derangement syndrome," please correct them and remind them that the right used to actually take Econ 101 seriously.

For story: Econ 101: The CliffsNotes
3 Comments | Post a Comment

Well said

And boy, do I share your frustration. Folks on the right - at least compared to the left - usually understand fundamental economic theory. But of late, they then ignore those little disclaimers in the Econ 101 textbooks that say "note that these conditions only apply in a competitive market without barriers to entry or exit, etc."

It's tantamount to telling women that if men had X-ray vision, we could see through their clothes. Therefore, they might as well just get naked since they're not hiding anything from us anyway. I've yet to meet a woman that line works on, but it is essentially the same line we're being fed by Dubya & Co., reframed as "if we had competitive markets, no barriers to exit nor subsidies to maintain the status quo, markets would allocate capital perfectly. Therefore, you might as well just accept that if your company isn't successful, it must be because your product sucks."

by Sean Casten at 9:59 AM on 18 Jul 2008

Conservative v. Right Wing

There's a huge difference between "conservative" and "right wing."

The former describes an ideology that resists change. Some of us enviros actually consider ourselves conservatives, as in "leave the natural landscape alone and don't change it." But where this usually applies is to social norms, and usually to sexual and religious ones.

Being right wing, on the other hand, means supporting those with money and power, as opposed to the left which supports the poor and working class. (Both wings have claims of support for the middle class.) The right posits that people are poor only because of individual failings, which supports the status quo that attains and retains wealth for the wealthy.

The point is that it is perfectly logical and consistent when the right -- Bush, Cheney, etc. -- oppose conservation, which is a conservative concept, not a right wing one. Conservation does not attain or retain any wealth for the wealthy; in fact, it would reduce their wealth, so the right will never support this.

by Wolverine at 11:28 AM on 20 Jul 2008

Good Policy > Blind Faith

Agreed.

Per your #2 "One of the biggest obstacles to a national renewable energy platform is the lack of inter-state transmission lines.." I would add the need for long-term renewable energy bills and mandates.

Our current flip-flopping over RE policy scares away investors who can't justify a 30 year investment with only 1 year of guaranteed government support. But perhaps more importantly, it shows that as a nation we are still hedging out bets and are not that serious about renewables. The day we put forth a 100% RPS bill (with a reasonable deadline, say 2040) is the day we seal the fate of oil barons, reclaim energy independence, and begin a clean future.

But that day hasn't arrived, see link below for the latest example of the senate dropping the ball on renewables -

http://www.greentechmedia.com/articles/senate-rejects-ren ...

by Neal Reardon at 2:00 PM on 01 Aug 2008

ADVERTISING POLICY

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