Tag: Barack Obama

Energy Error Continued

When Barack Obama emerged as a serious contender for the presidency, he offered a core menu of curing everything by increased federal intervention in health care, education, and energy. Whenever new problems arose that lessened the urgency of earlier concerns, Obama has crafted assertions that his original prescriptions will also resolve the new difficulties. In energy, this has involved extending his program to new, even more dubious projects. He also has a habit of incessantly repeating the same tired arguments in the vain hope that his skill at persuasion will win the day.

His March 30, 2011 energy speech and accompanying Blueprint are typical. About the only differences between these and his June 15, 2010 speech on energy were more bad ideas. He added to the panic-driven slowdown in offshore oil and gas drilling permits, now rationalized as a prudent response; a post-Japan crisis review of nuclear power; and another for new methods of producing natural gas. For no good reason, he argued that Brazilian oil development needed U.S. government support despite the long history that successful oil development in some of the most backward countries in the world has occurred without major U.S. government aid. (In fact, the aid offered was an Export-Import Bank loan and thus more an exercise in crony capitalism than a useful move.)

Otherwise Obama continued to display the central characteristic of his philosophy — that he and his advisers possess such superior insight that they can guide the average American to better decisions. This is precisely the Progressive error that has led to the present political mess and the cause of the dramatic 2010 shift in the composition of the U.S. House of Representatives. Whenever concerns arise that he has overreached, he claims that he was doing the sensible thing.

His Blueprint constitutes Exhibit A in the case against this interventionism. It is essentially a list of the many mandates that Obama has achieved or desires, ranging from high-speed rail to micromanaging the design of every new building in the United States. This list is dominated by the many provisions of the infamous stimulus bill that indiscriminately threw money at every favored area including energy. Obama seems to believe that seeing where the money went will counteract the outrage at ill-conceived, unnecessary, and counterproductive spending. At least to energy specialists, what actually appears is resounding proof that the voters were right — every idea is bad.

The speech also showcased Obama’s talent at making dubious assertions. Many have commented that he does not deserve the credit that he seems to claim for the rise in U.S. oil output. The very long lead times, which Democrats traditionally use to oppose expanded oil-and-gas leasing, imply that the rise was facilitated by actions in prior administrations. An even greater whopper was his intimation that the existence of many undeveloped leases suggests that no rush exists to lease and license more. The more obvious criticism is that his cumbersome licensing policy contributes to the inability to develop. Less apparent is the likelihood that many of those leases proved, after further examination, to be unattractive while more promising areas are being withheld from leasing.

He similarly selected the most misleading possible way to understate U.S. oil-production potential. He indicated correctly that the United States has only 2 percent of world “proved” reserves of oil. What he ignored is that proved reserves cover only already-known sources and wild methodological differences among countries in how this is calculated make cross-country comparisons dubious. (This situation was worsened by 1970s hysteria. The highly efficient existing U.S. system was replaced because it was run by the supposedly untrustworthy industry. The government created its own far more expensive and far less satisfactory system.) The more reliable measure of actual production shows an 8.5 percent U.S. share in 2009. Neither measure satisfactorily indicates what really matters — the potential efficiently to add production. Obama thus adds to his prior unjustifiable aim to reduce petroleum use by also misstating the petroleum potential. Substantial oil imports remain desirable for the U.S. because of the underlying economics. Nevertheless, the federal government has imposed undesirable restrictions on oil and gas production.

Friday Links

  • They passed the bill, and now we’re finding out what’s in it.
  • We’re finding out that the war in Libya could really be about protecting European interests.
  • In Atlas Shrugged, Ayn Rand described a world in which government both partly produced and partly subsidized goods; we’re finding out she wasn’t far off the mark.
  • We’re finding out that “American exceptionalism” is a cloak for military adventurism.
  • The longer America fights a war on drugs, the more we find out about how detrimental it is to our fiscal outlook:


What’s Wrong with Imported Oil?

In a speech today at Georgetown University, President Obama called for a goal of cutting America’s oil imports by one-third within a decade. Like all efforts to wean Americans from big, bad imports, such a policy will mean we will all pay more than we need to for the energy that helps to power our economy.

I’ll leave it to my able Cato colleagues to dissect the president’s proposal in terms of energy policy, but in terms of trade policy, this is about as bad as it gets.

We Americans benefit tremendously from our relatively free trade in petroleum products. Like all forms of trade, the importation of oil produced abroad allows us to acquire it at a price far lower than we would pay if we had to rely more heavily on domestic oil supplies.

The money we save buying oil more cheaply on global markets allows our whole economy to operate more efficiently. Oil is the ultimate upstream input that virtually all U.S. producers use to make their final products, either in the product itself or for shipping. If U.S. manufacturers and other sectors are forced to pay sharply higher prices for petroleum products because of import restrictions, their final goods will cost more and will be less competitive in global markets. If households are forced to pay more for gasoline and heating oil, consumer will have less to spend on domestic goods and services.

The president talked in the speech about the goal of not being “dependent” on foreign suppliers, but most of our oil imports come from countries that are either friendly or at least not in any way an adversary. According to the U.S. Department of Commerce, one third of our oil imports in 2010 came from our two closest neighbors and NAFTA partners, Canada and Mexico. Another third came from the problematic providers in the Arab Middle East and Venezuela (none from Iran, less than one-third of 1 percent from Libya.) The rest came from places such as Nigeria, Angola, Colombia, Brazil, Russia, Ecuador and Great Britain.

Even if, by the force of government, we could reduce our imports by a third, there is no reason to expect that the reduction would be concentrated in the problematic providers. In fact, oil is generally cheaper to extract in the Middle East, so a blanket reduction would probably tilt our imports away from our friends and toward our real and potential adversaries.

In one speech, the president has managed to state a policy goal that is bad trade policy, bad security policy, and bad foreign policy.

Obama’s Little Evidence Problem

Last month I wrote a post on President Obama’s selective citation of evidence when debating which education programs to kill and which to keep. Well yesterday the administration struck again, issuing the following statement opposing a bill that would revive DC’s bleeding-out voucher program:

STATEMENT OF ADMINISTRATION POLICY

H.R. 471 – Scholarships for Opportunity and Results Act

(Rep. Boehner, R-Ohio, and 50 cosponsors)

While the Administration appreciates that H.R. 471 would provide Federal support for improving public schools in the District of Columbia (D.C.), including expanding and improving high-quality D.C. public charter schools, the Administration opposes the creation or expansion of private school voucher programs that are authorized by this bill.  The Federal Government should focus its attention and available resources on improving the quality of public schools for all students.  Private school vouchers are not an effective way to improve student achievement. The Administration strongly opposes expanding the D.C. Opportunity Scholarship Program and opening it to new students. Rigorous evaluation over several years demonstrates that the D.C. program has not yielded improved student achievement by its scholarship recipients compared to other students in D.C.  While the President’s FY 2012 Budget requests funding to improve D.C. public schools and expand high-quality public charter schools, the Administration opposes targeting resources to help a small number of individuals attend private schools rather than creating access to great public schools for every child.

So, as I wrote last month, while the Prez. has no problem calling for heaps of dollars for such proven failures as the 21st Century Community Learning Centers – $1.27 billion, to be exact – he won’t support $20 million for something that rigorous research actually works, quoting Andrew Coulson’s recent congressional testimony:

that students attending private schools thanks to this program have equal or better academic performance than their peers in the local public schools, and have significantly higher graduation rates. This, and very high levels of parental satisfaction, com[ing] at an average per pupil cost of around $7,000. By contrast, per pupil spending on k-12 public education in the nation’s capital was roughly $28,000 during the 2008-09 school year.

And such positive results, again in contrast to the President’s statement, are not an aberration for school choice. The highest-calibre research on choice has almost always found clear benefits stemming from it, and has never found negative outcomes.

Obviously I can’t read the President’s mind – he might oppose the voucher program but otherwise love big education spending for philosophical reasons, or he might just be appeasing teachers’ unions – but one thing I do know is that a fair examination of the evidence simply cannot support killing DC vouchers while spending lavishly everywhere else.

The Legitimacy of the Libyan War

President Obama’s speech last evening offers a chance to assess the implications of the war in Libya.

President Obama is not the first president to order attacks on another nation without the authorization of Congress.  This case, however, seems different. Prior to the intervention, the President’s national security advisors had determined that the nation had no vital interest at stake in the Libyan civil war. Secretary of Defense Robert Gates has repeated that conclusion after the intervention began. For his part, President Obama emphasized in last night’s speech and before, that the war would preclude a “humanitarian catastrophe.” Why did that rationale win out over the realism of his advisors?

President Obama tends to see our nation and the world as divided between oppressors (victimizers) and the oppressed (victims).  In this view, politics should help the oppressed and do justice (i.e. harm) to the oppressor.  In Libya, this outlook provides a clear division between a oppressor (Qaddafi and his loyalists) and his victims (the rebels). Morality thus demands war against the oppressor on behalf of his victims.

But there is a problem with America acting alone. Many people in the Middle East and elsewhere see the United States not as a vindicator of the oppressed but rather as a oppressor.  Truth be told, more than few Americans share that view.

Those who share this view believe that the United States cannot act unilaterally to help the victims in Libya. This would be true even if Congress authorizes the war as required under Article I of the United States Constitution.  The authorization to go to war must come from someone else other than an American political official or institution.

Hence, President Obama sought international authorization for the war in Libya. True, he sought that authority for pragmatic reasons. A coalition meant shared burdens and (Obama believes) a quick way out of Libya. But the authorizations by the U.N. Security Council and earlier by the Arab League also could be seen as giving legitimacy to the enterprise. Those authorizations meant the United States could go to Libya as a true protector of the oppressed.

If you doubt any of this, examine closely what the President has said about the war. In his speech, the rebels become victims at the mercy of an oppressor. Congress gets a fleeting mention related to consultation about, rather than authorization of, war. True legitimacy for the war comes from a “U.N. mandate and international support.” In his letter to Congress announcing the war, the first sentence reads “at my direction, U.S. military forces commenced operations to assist an international effort authorized by the United Nations (U.N.) Security Council and undertaken with the support of European allies and Arab partners, to prevent a humanitarian catastrophe…” Here again the legitimacy for the war comes the United Nations, the European allies, and the Arab League. Congress has neither power to deny the president nor legitimacy to bestow on his work.

There is much to say about these reasons for war. Some people might see in Libya a civil war between two armed gangs. Lacking the frame of oppressor and victims, they will be less willing than the President to assume that the people in the territory called Libya wear either black or white hats. We may learn to our cost that our new allies are victims now and oppressors later.  If we take the President seriously, we will be obligated to make war against them, too.

We have now taken on a default obligation to help every victim and to punish every oppressor throughout the world. We have two constraints on fulfilling that obligation. The first, mentioned by the president, is costs. Eventually the financial markets may limit our efforts on behalf of victims. Second, and more important legally, a president must seek authorization for war from the United Nations, the European union, the Arab League or….well, anyone except the United States Congress.

It is not just that this president, like others before him, ignored Article I of the Constitution. Nor is this president the first to shun moral complexity in favor of a Manichean outlook. President Obama is the first, however, to assert that his broad powers to initiate war should be limited primarily by people who are outside the American social compact.  On this account, sotto voce, the Constitution is not just ignored. It is irrelevant.

Tuesday Links

  • Shifting America’s focus away from individual liberty is waging war on the future, not winning it.
  • U.N. “authorization” is the Emperor’s new fig leaf for war with Libya.
  • Why are we fighting Mexico’s drug war?
  • David Boaz remembers Geraldine Ferraro, who helped advance the war against gender discrimination in politics.
  • Chris Preble eulogizes the Weinberger/Powell doctrine against the backdrop of the Libyan war:


Tuesday Links