Last night during Bush's State of The Union Speech, he called for more money to develop alternative sources of energy for independence form foreign oil.



Other than being too costly, it does not take into consideration the fact that the market will correct itself, provided politicians allow the energy companys to respond to the Supply/Demand equation, and cost effectiveness of energy development.

Here is a piece by the great Henry Hazlett, that is 25 years old. It is exactly on point, showing that State planning is inefficient, responds too slow, and is unable to forsee or respond to the quick moving market forces that it is attempting to steer.

It is a perfect waste of resources to attempt to have State Planning even have a chance of coming up to that of Free Enterprise.

Planning vs. The Free Market
By Henry Hazlitt

Henry Hazlitt, among so many notable accomplishments, is the author of the best-selling and recently revised Economics in One Lesson.

At the 1962 meeting of the Mont Pelerin Society in Knokke, Belgium, he delivered an address, “’Planning’ vs. the Free Market,” which appeared in The Freeman of December 1962. The issue continues to plague the people of many lands, and bears further study today.

When we discuss “economic planning,” we must be clear concerning what it is we are talking about. The real question being raised is not: plan or no plan? but whose plan?

Each of us, in his private capacity, is constantly planning for the future: what he will do the rest of today, the rest of the week, or on the weekend; what he will do this month or next year. Some of us are planning, though in a more general way, ten or twenty years ahead.

We are making these plans both in our capacity as consumers and as producers. Employees are either planning to stay where they are, or to shift from one job to another, or from one company to another, or from one city to another, or even from one career to another. Entrepreneurs are either planning to stay in one location or to move to another, to expand or contract their operations, to stop making a product for which they think demand is dying and to start making one for which they think demand is going to grow.

Now the people who call themselves “Economic Planners” either ignore or by implication deny all this. They talk as if the world of private enterprise, the free market, supply, demand, and competition, were a world of chaos and anarchy, in which nobody ever planned ahead or looked ahead, but merely drifted or staggered along. I once engaged in a television debate with an eminent Planner in a high official position who implied that without his forecasts and guidance American business would be “flying blind.” At best, the Planners imply, the world of private enterprise is one in which everybody works or plans at cross purposes or makes his plans solely in his “private” interest rather than in the “public” interest.

Now the Planner wants to substitute his own plan for the plans of everybody else. At best, he wants the government to lay down a Master Plan to which everybody else’s plan must be subordinated.

It Involves Compulsion

It is this aspect of Planning to which our attention should be directed: Planning always involves compulsion. This may be disguised in various ways. The government Planners will, of course, try to persuade people that the Master Plan has been drawn up for their own good, and that the only persons who are going to be coerced are those whose plans are “not in the public interest.”

The Planners will say, in the newly fashionable phraseology, that their plans are not “imperative,” but merely “indicative.” They will make a great parade of “democracy,” freedom, cooperation, and noncompulsion by “consulting all groups”-“Labor,” “Industry,” the Government, even “Consumers Representatives”—in drawing up the Master Plan and the specific “goals” or “targets.” Of course, if they could really succeed in giving everybody his proportionate weight and voice and freedom of choice, if everybody were allowed to pursue the plan of pro duction or consumption of specific goods and services that he had intended to pursue or would have pursued anyway, then the whole Plan would be useless and pointless, a complete waste of energy and time. The Plan would be meaningful only if it forced the production and consumption of different things or different quantities of things than a free market would have provided. In short, it would be meaningful only insofar as it put compulsion on somebody and forced some change in the pattern of production and consumption.

There are two excuses for this coercion. One is that the free market produces the wrong goods, and that only government Planning and direction could assure the production of the “right” ones. This is the thesis popularized by J. K. Galbraith. The other excuse is that the free market does not produce enough goods, and that only government Planning could speed things up. This is the thesis of the apostles of “economic growth.”

The “Five-Year Plans”

Let us take up the “Galbraith” thesis first. I put his name in quotation marks because the thesis long antedates his presentation of it. It is the basis of all the communist “Five-Year Plans” which are now aped by a score of socialist nations. While these Plans may consist in setting out some general “overall” percentage of production increase, their characteristic feature is rather a whole network of specific “targets” for specific industries: there is to be a 25 per cent increase in steel capacity, a 15 per cent increase in cement production, a 12 per cent increase in butter and milk output, and so forth.

There is always a strong bias in these Plans, especially in the communist countries, in favor of heavy industry, because it gives increased power to make war. In all the Plans, however, even in noncommunist countries, there is a strong bias in favor of industrialization, of heavy industry as against agriculture, in the belief that this necessarily increases real income faster and leads to greater national self-sufficiency. It is not an accident that such countries are constantly running into agricultural crises and food famines.

But the Plans also reflect either the implied or explicit moral judgments of the government Planners. The latter seldom plan for an increased production of cigarettes or whisky, or, in fact, for any so-called “luxury” item. The standards are always grim and puritanical. The word “austerity” makes a chronic appearance. Consumers are told that they must “tighten their belts” for a little longer. Sometimes, if the last Plan has not been too unsuccessful, there is a little relaxation: consumers can, perhaps, have a few more motor cars and hospitals and playgrounds. But there is almost never any provision for, say, more golf courses or even bowling alleys. In general, no form of expenditure is approved that cannot be universalized, or at least “majoritized.” And such so-called luxury expenditure is discouraged, even in a so-called “indicative” Plan, by not allowing access by promoters of such projects to bank credit or to the capital markets. At some point government coercion or compulsion comes into play.

Austerity Leads to Waste

This disapproval and coercion may rest on several grounds. Nearly all “austerity” programs stem from the belief, not that the person who wants to make a “luxury” expenditure cannot afford it, but that “the nation” cannot afford it. This involves the assumption that, if I set up a bowling alley or patronize one, I am somehow depriving my fellow citizens of more necessary goods or services. This would be true only on the assumption that the proper thing to do is to tax my so- called surplus income away from me and turn it over to others in the form of money, goods, or services. But if I am allowed to keep my “surplus” income, and am forbidden to spend it on bowling alleys or on imported wine and cheese, I will spend it on something else that is not forbidden. Thus when the British austerity program after World War II prevented an Englishman from consuming imported luxuries, on the ground that “the nation” could not afford the “foreign exchange” or the “unfavorable balance of payments,” officials were shocked to find that the money was being squandered on football pools or dog races. And there is no reason to suppose, in any case, that the “dollar shortage” or the “unfavorable balance of payments” was helped in the least. The austerity program, insofar as it was not enforced by higher income taxes, probably cut down potential exports as much as it did potential imports; and insofar as it was enforced by higher income taxes, it discouraged exports by restricting and discouraging production.

Bureaucratic Choice

But we come now to the specific Galbraith thesis, growing out of the agelong bureaucratic suspicion of luxury spending, that consumers generally do not know how to spend the income they have earned; that they buy whatever advertisers tell them to buy; that consumers are, in short, boobs and suckers, chronically wasting their money on trivialities, if not on absolute junk. The bulk of consumers also, if left to themselves, show atrocious taste, and crave cerise automobiles with ridiculous tailfins.

The natural conclusion from all this—and Galbraith does not hesitate to draw it—is that consumers ought to be deprived of freedom of choice, and that government bureaucrats, full of wisdom—of course, of a very unconventional wisdom—should make their consumptive choices for them. The consumers should be supplied, not with what they themselves want, but with what bureaucrats of exquisite taste and culture think is good for them. And the way to do this is to tax away from people all the income they have been foolish enough to earn above that required to meet their bare necessities, and turn it over to the bureaucrats to be spent in ways in which the latter think would really do people the most good—more and better roads and parks and play grounds and schools and television programs—all supplied, of course, by government.

And here Galbraith resorts to a neat semantic trick. The goods and services for which people voluntarily spend their own money make up, in his vocabulary, the “private sector” of the economy, while the goods and services supplied to them by the government, out of the income it has seized from them in taxes, make up the “public sector.” Now the adjective “private” carries an aura of the selfish and exclusive, the inward-looking, whereas the adjective “public” carries an aura of the democratic, the shared, the generous, the patriotic, the outward-looking—in brief, the public-spirited. And as the tendency of the expanding welfare state has been, in fact, to take out of private hands and more and more take into its own hands provision of the goods and services that are considered to be most essential and most edifying—roads and water supply, schools and hospitals and scientific research, education, old-age insurance and medical care—the tendency must be increasingly to associate the word “public” with everything that is really necessary and laudable, leaving the “private sector” to be associated merely with the superfluities and capricious wants that are left over after everything that is really important has been taken care of.

If the distinction between the two “sectors” were put in more neutral terms—say, the “private sector” versus the “governmental sector,” the scales would not be so heavily weighted in favor of the latter. In fact, this more neutral vocabulary would raise in the mind of the hearer the question whether certain activities now assumed by the modern welfare state do legitimately or appropriately come within the governmental province. For Galbraith’s use of the word “sector,” “private” or “public,” cleverly carries the implication that the public “sector” is legitimately not only whatever the government has already taken over but a great deal besides. Galbraith’s whole point is that the “public sector” is “starved” in favor of a “private sector” overstuffed with super fluities and trash.

The Voluntary Way

The true distinction, and the appropriate vocabulary, however, would throw an entirely different light on the matter. What Galbraith calls the “private sector” of the economy is, in fact, the voluntary sector; and what he calls the “public sector” is, in fact, the coercive sector. The voluntary sector is made up of the goods and services for which people voluntarily spend the money they have earned. The coercive sector is made up of the goods and services that are provided, regardless of the wishes of the individual, out of the taxes that are seized from him. And as this sector grows at the expense of the voluntary sector, we come to the essence of the welfare state. In this state nobody pays for the education of his own children but everybody pays for the education of everybody else’s children. Nobody pays his own medical bills, but everybody pays everybody else’s medical bills. Nobody helps his own old parents, but everybody else’s old parents. Nobody provides for the contingency of his own unemployment, his own sickness, his own old age, but everybody provides for the unemployment, sickness, or old age of everybody else. The welfare state, as Bastiat put it with uncanny clairvoyance more than a century ago, is the great fiction by which everybody tries to live at the expense of everybody else.

This is not only a fiction; it is bound to be a failure. This is sure to be the outcome whenever effort is separated from reward. When people who earn more than the average have their “surplus,” or the greater part of it, seized from them in taxes, and when people who earn less than the average have the deficiency, or the greater part of it, turned over to them in handouts and doles, the production of all must sharply decline; for the energetic and able lose their incentive to produce more than the average, and the slothful and unskilled lose their incentive to ira-prove their condition.

The Growth Planners

I have spent so much time in analyzing the fallacies of the Galbraithian school of economic Planners that I have left myself little in which to analyze the fallacies of the Growth Planners. Many of their fallacies are the same; but there are some important differences.

The chief difference is that the Galbraithians believe that a free market economy produces too much (though, of course, they are the “wrong” goods), whereas the Growthmen believe that a free market economy does not produce nearly enough. I will not here deal with all the statistical errors, gaps, and fallacies in their arguments, though an analysis of these alone could occupy a fat book. I want to concentrate on their idea that some form of government direction or coercion can by some strange magic increase production above the level that can be achieved when everybody enjoys economic freedom.

For it seems to me self-evident that when people are free, production tends to be, if not maximized, at least optimized. This is because, in a system of free markets and private property, everybody’s reward tends to equal the value of his production. What he gets for his production (and is allowed to keep) is in fact what it is worth in the market. If he wants to double his income in a single year, he is free to try—and may succeed if he is able to double his production in a single year. If he is content with the income he has—or if he feels that he can only get more by excessive effort or risk—he is under no pressure to increase his output. In a free market everyone is free to maximize his satisfactions, whether these consist in more leisure or in more goods.

But along comes the Growth Planner. He finds by statistics (whose trustworthiness and accuracy he never doubts) that the economy has been growing, say, only 2.8 per cent a year. He concludes, in a flash of genius, that a growth rate of 5 per cent a year would be faster!

There is among the Growth Planners a profound mystical belief in the power of words. They declare that they “are not satisfied” with a growth rate of a mere 2.8 per cent a year; they demand a growth rate of 5 per cent a year. And once having spoken, they act as if half the job had already been done. If they did not assume this, it would be impossible to explain the deep earnestness with which they argue among themselves whether the growth rate “ought” to be 4 or 5 or 6 per cent. (The only thing they always agree on is that it ought to be greater than whatever it actually is.) Having decided on this magic overall figure, they then proceed either to set specific targets for specific goods (and here they are at one with the Russian Five-Year Planners) or to announce some general recipe for reaching the overall rate.

But why do they assume that setting their magic target rate will increase the rate of production over the existing one? And how is their growth rate supposed to apply as far as the individual is concerned? Is the man who is already making $50,000 a year to be coerced into working for an income of $52,500 next year? Is the man who is making only $5,000 a year to be forbidden to make more than $5,250 next year? If not, what is gained by making a specific “annual growth rate” a governmental “target”? Why not just permit or encourage everybody to do his best, or make his own decision, and let the average “growth” be whatever it turns out to be?

The way to get a maximum rate of “economic growth”—assuming this to be our aim—is to give maximum encouragement to production, employment, saving, and investment. And the way to do this is to maintain a free market and a sound currency. It is to encourage profits, which must in turn encourage both investment and employment. It is to refrain from oppressive taxation that siphons away the funds that would otherwise be available for investment. It is to allow free wage rates that permit and encourage full employment. It is to allow free interest rates, which would tend to maximize saving and investment.

The Wrong Policies

The way to slow down the rate of economic growth is, of course, precisely the opposite of this. It is to discourage production, employment, saving, and investment by incessant interventions, controls, threats, and harassment. It is to frown upon profits, to declare that they are excessive, to file constant antitrust suits, to control prices by law or by threats, to levy confiscatory taxes that discourage new investment and siphon off the funds that make investment possible, to hold down interest rates artificially to the point where real saving is discouraged and malinvestment encouraged, to deprive employers of genuine freedom of bargaining, to grant excessive immunities and privileges to labor unions so that their demands are chronically excessive and chronically threaten unemployment—and then to try to offset all these policies by government spending, deficits, and monetary inflation. But I have just described precisely the policies that most of the fanatical Growth-men advocate.

Their recipe for inducing growth always turns out to be—inflation. This does lead to the illusion of growth, which is measured in their statistics in monetary terms. What the Growthmen do not realize is that the magic of inflation is always a short-run magic, and quickly played out. It can work temporarily and under special conditions—when it causes prices to rise faster than wages and so restores or expands profit margins. But this can happen only in the early stages of an inflation which is not expected to continue. And it can happen even then only because of the temporary ac-quiescence or passivity of the labor union leaders. The consequences of this short- lived paradise are malinvestment, waste, a wanton redistribution of wealth and income, the growth of speculation and gambling, immorality and corruption, social resentment, discontent and upheaval, disillusion, bankruptcy, increased governmental controls, and eventual collapse. This year’s euphoria becomes next year’s hangover. Sound long-run growth is always retarded.

In Spite of “The Plan”

Before closing, I should like to deal with at least one statistical argument in favor of government Planning. This is that Planning has actually succeeded in promoting growth, and that this can be statistically proved. In reply I should like to quote from an article on economic planning in the Survey published by the Morgan Guaranty Trust Company of New York in its issue of June 1962:

I work with a Russian who moved here in the mid 90s. He was born and raised in Soviet Moscow. He is a socialist for sure. I always argue with him about the benefits of Capitalism vs. Socialism. He told me all about the Soviet Ministry of Planning and the more he told me the more I came to understand there was no possible way the Soviet Union could have kept pace with the Capitalist West. A central planning agency can, in no way, plan an economic future for a nation.

But getting back to oil:

I agree with you about the market correcting itself. Supply of oil is decreasing so prices are going up. Eventually it will cost relatively less for consumers to own hybrid vehicles and for automakers to produce them. They will get better as technology improves as well. However that will not reduce the acutal cost we pay for using oil. Anyone can do the math.

I think many city dwellers will turn to mass transit for commutes to and from work. There are ways we can help transit systems across the country improve so will people will atleast try them for the commute to and from work.

Whatever we do I don't think our government should do too much when trying to correct this problem. In fact I believe the less they do the better. That includes collecting less taxes by using strategic tax breaks for hybrid auto producers and drivers and tax incentives for mass transit users.

Mass transportation would work OK, I guess, for city dwellers, but for those of us that live in far-flung locations where cities are 50+ miles apart, it wouldn't help at all.

My main concern is that the rural folk, especially the elderly, would be hurt tremendously if oil prices contiues to rise. The majority would not have $$ to buy hybrids......at least that the rural elderly poor that I work for/with. Their health care is being provided for them to stay in their homes right now through rural home-health agencies, but if this service is diminished any further than Medicare/Medicaid has done by cutting costs for reimbursements and now higher gas prices, this growing population will end up in nursing homes with doubtful care being provided.

Many, many ramifications to this problem.

The elderly and poor in smaller cities and rural towns will be in worse shape. I agree with that. I think by then hybrid vehicles should be a lot more efficient and a lot more affordable but that won't help people who cannot afford a new car as it is. What should be done to help the less fortunate is something we should really think about.

Here is what one of my favorite Classic Liberals, James K Glassman, has to say about the President's pandering with concern to our "so called" being "addicted to Oil".

And he is "Right On" here. The President should be ashamed of himself.

Addicted to What?
By James K. Glassman : 02 Feb 2006

The first part of Tuesday's State of the Union -- on national security -- was tough, clear, principled, well reasoned. The second part was a laundry list, reminiscent of the worst of Bill Clinton. I was nodding off when I heard the President Bush say, "America is addicted to oil."

Addicted to oil! That woke me up.

America is no more addicted to oil than it is addicted to bread, to milk, to paper, to water, to computers or, in the immortal words of the late Robert Palmer, to love.

We use oil -- and other unmentioned but implied addictions like coal and natural gas -- to generate energy that powers our cars, heats our homes, lights our cities, runs our factories. By the standard of what they do for us, fossil fuels are pretty cheap. They provide enormous industrial leverage. But, at least in the short term, they are getting more expensive -- in part because demand is rising (mainly in other nations, like China and India, that want to have standards of living like ours) and in part because supply isn't keeping up.

Rather than concentrating on what the U.S. can do now to increase supply, the President instead decided to use a word that is straight out of the radical environmentalists' dictionary: "addicted." The implication is that our desire to use oil is something that is not just uncontrollable but also shameful. The message is that we must kick this disgusting habit.

Coming from President Bush, who spent most of his non-political adult career in the oil business -- Arbusto, Spectrum 7, Harken -- the word "addicted" is baffling. If Americans are addicts, then, to follow the metaphor, Bush himself was a drug dealer, a pusher, a kingpin.

But maybe I should cut Bush a break. It's just rhetoric, right?

In this case, no. The use of the word "addicted" is dangerous. It could end up hiking prices by reducing supply.

How? Bush has signaled a new attitude from the White House. If this president can't defend the working of our almost-free market, then who will? If I were in the oil business myself, I would be extremely worried by this speech. One of my responses would be to hold back on planned research and development and capital spending. The three largest U.S. energy companies alone are projected to make capital expenditures of $43 billion this year, up from $33 billion in 2005. But does that make sense if Washington is considering windfall profits taxes, subsidies to alternative fuels and regulatory policies whose guiding principle is that fossil fuels are evil?

Instead of concentrating on increasing fossil-fuel supplies at home, the President used all of the energy section of his speech -- four paragraphs -- talking about such exotica as "revolutionary solar and wind technologies," "producing ethanol, not just from corn, but from wood chips and stalks, or switch grass," and "pollution-free cars that run on hydrogen." Of course, since these alternatives have no commercial viability, the government will have to subsidize them. The latest Carteresque concoction, announced in the speech: the "Advanced Energy Initiative."

Don't get me wrong. Alternatives are fine. No doubt they will substitute for current energy sources some day, when they become competitive on price -- without subsidies. But, as of 2004, wind, solar and geothermal accounted for less than one percent of energy consumption. Add hydroelectric and biomass (including ethanol) and you pick up another five or six percentage points. That's all. For there here and now, the best way to battle higher prices is to promote policies to boost supply.

There was no mention by the President, for example, of the importance of building new LNG terminals, which will allow the U.S. to import natural gas. This lack of terminals would have almost certainly been the source of blackouts if the winter had not been so mild. Bush might have talked about supporting legislation -- tied up by his former HUD secretary, Sen. Mel Martinez (R-Fla) -- that would share oil-leasing revenues with states, thus discouraging them from blocking offshore drilling. He could have talked about making it easier to explore at home, in Alaska, the Rocky Mountains and vast federal lands now off limits. He could have supported less burdensome regulations on building or expanding refineries.

And the President might have been straight with his audience instead of pandering with terms like "our dependence on Middle Eastern oil." The truth is that the United States will never become energy independent. Even if we were, disruptions in the Middle East (or Venezuela or Nigeria) would still boost the price of oil -- which is a global price since energy is a global commodity.

Also, it may surprise Americans to learn that, according to the most recent import statistics from the Department of Energy, the biggest petroleum exporter to the United States is Canada (at 70 million barrels in November 2005 vs. 41 million for Saudi Arabia, in a distant third place). Second is Mexico. Persian Gulf (including Saudi) oil amounted to about one-sixth of our imports and one-tenth of our total petroleum use last November.

The sad truth is that some of the big oil companies are themselves responsible for creating an environment where an oilman president can call the use of oil an addiction. In their advertising, they talk high-mindedly about "alternatives" to fossil fuels, as if they were on a moral crusade to replace the nasty stuff they make now. Why aren't they proud to say that, more and more efficiently, they are producing energy that makes people's lives better?

I suspect that some of these companies are simply being disingenuous. They're paying lip service to the chattering classes. So now is the President of the United States. The consequences could be dire.

I agree with the writer in saying Mr. President used the wrong word here. Americans aren't addicted to oil. Most of us use it because that is just how it has always been. It is just a commodity we use without really thinking. It is the norm. A few decades from now the culture will change but will generations a hundred years from now even care about how much oil was used in 1900-2050? Absolutely not. They will have their own norm.

You are right Brooklyn. To me, Bush has been like the actor who plays two characters at the same time. On one hand, he plays the origionalist who is determined to bring the country back to it's origional principles, promote national security, and envigorate the economy. Suddenly, he turns around exposing the other face of the actor, by promoting initiatives that increase the size and scope of the State. What is wrong with this fellow? If he is trying to emulate Reagan, he is certainly taking the wrong cues.

Here is what Robert Novak says about the four paragraphs he devoted to the "addicted to oil" section of the speech.


The Real Bush?

WASHINGTON -- While jumping up on cue to cheer during the speech and delivering rave reviews afterward in the Capitol's Statuary Hall, conservative members of Congress were deeply disappointed by George W. Bush Tuesday night. It was not merely that the president abandoned past domestic goals. He appeared to be moving toward bigger government.

The consensus on the Right was that President Bush's fifth State of the Union Address was his worst. Republican congressmen agreed privately that he was most effective at the beginning with his familiar message of why U.S. forces cannot abandon Iraq. The problem for these lawmakers was the rest of the 51-minute presentation, which was filled with unpleasant surprises........................

However, what bothered conservatives most about Tuesday night's performance was not what the president failed to do but what he actually did. The pre-speech public relations drumbeat had promised the president would deliver a new energy initiative to Americans angry about the price of gasoline. Indeed, Bush deplored that "America is addicted to oil, which is often imported from unstable parts of the world" and promised to end "our dependence on Middle Eastern oil." It was how he would accomplish this that stunned conservatives.

The president proposed that the government preside over a wide array of non-petroleum energy options. That has all the characteristics of an "industrial policy," with the federal government picking winners and losers. While violating the Republican Party's free market philosophy, this is a course with a lengthy pedigree of failure all over the world.

Jerry Taylor, Senior Fellow of the CATO Institute, has this to say about the President's comments on energy and the SOTU address.

Comments on the State of the Union address

Tuesday 31 January 2006

Jerry Taylor, Cato senior fellow:

"The President offered bracing new rhetoric about where he would like to take energy policy in the coming year, but he suggested little more than a bit more money for the same old programs that have failed in the past. In short, it reminds me of the metaphor about 'old wine in new bottles.'

"Regarding the rhetoric, it’s odd that the President would complain that America is 'addicted to oil.' Another way of putting it is that American consumers are attracted to the lowest cost sources of energy to meet their energy needs. It's a bit distressing to call that sensible inclination an 'addiction.'

"As far as the new subsidies for coal, wind, solar, nuclear, and ethanol energy are concerned, if those technologies have economic merit, no subsidy is necessary. If they don't, then no subsidy will provide it. Those subsidies have failed to produce economic energy in the past and there is little reason to expect that they will do so in the future.

"Nor is it the government's job to design automobiles. Although government funded R&D projects to redesign the internal combustion engine are nothing new, they have never amounted to anything. For instance, while the Clinton Administration was engaged in a similar undertaking called 'The Partnership for a New Generation of Vehicles' and producing nothing of consequence, Japanese auto companies -- without significant government help -- were busy designing the hybrid powered engines that are now all the rage within the auto industry. When government ties to pick winners, it usually finds itself stuck with losers and often sets the entire domestic industry back.

"Finally, achieving the President's goal of reducing Middle Eastern oil imports by 75 percent would be economically meaningless. A supply disruption in the Middle East would increase the price of crude everywhere in the world no matter where or how it is produced.

"There is nothing really new in this speech as it pertains to energy except more money for old programs -- the political equivalent of the triumph of hope over experience."

Another thing I don't understand is why reducing our need for Middle Eastern oil needs to be persued. What consumers need is affordable and more efficient hybrid vehicles and safe nuclear energy to reduce our need for oil no matter what nation is the source. The market will deliver this in time when oil becomes more expensive.

Local government needs to allow mass transit systems to become marketized. Competition will lead to better mass transit systems. The firms managing the transit systems could then utilize an important business tool: advertising.

Federal government could use a higher percentage of money already due to go to highway improvement and building to improve transit systems.

The entire thing simply gets to be a big Cluster Foxtrot, when you get politicians and bureaucrats involved in anything. The are constantly making new rules to combat the last set of rules that did not work, that were also passed and written to combat the rules before it that also did not work.

Simplicity is the only thing that ever has a chance of working effectively, yet it does not help perpetuate their "species". After all any group is successful when it multiplies.

What I find so frustrating is that most people, including the President, constantly talk about weening ourselves form foreign, or Middle East oil. What does that possibly mean? Since we are buying and selling oil on a world market, it would not matter where we got our oil, be it from Iran OR locally. the price is set on the world "spot" market,and the only added cost is due to quality of oil, and delivery costs.

People simply are beyond understanding this. Amazing! Who cares where it comes from. It still has a set price.

it is just like the fallacy of the "so called" trade defecit. But I won't get started on that here.

I'm just amazed at the total intellectual laziness on the part of citizens, and especially politicians AND the MSM, who are supposed to inform us correctly.

I'll get off my soapbox now.

People should really read more about our trade deficit before they assume it is a bad thing.

You're right! I think it is about time for me to start new threads on the "so called" trade defecit, AND again define Fascism, since this it is perhaps the most misunderstood two concepts out there.

Aparantly the WSJ agrees with my opinion here.

Yes, We're Addicted--To Economic Growth
By Thomas Bray

I admit it. I am addicted to oil. Parson Bush has found me out.

But I have something else to confess. I am addicted to food as well. I eat every day, often three times a day. I am addicted to houses; my wife and I own two of them. I am addicted to water; I drink it all the time, even swim in it.

Of course America is addicted to oil, in the sense that it uses a lot of the stuff. But as Bush also pointed out, the American economy is the envy of the world. There is a close connection between the two things. North Korea doesn’t use much oil, but would you want to live there? What Americans are addicted to is economic growth.

Let’s get real, folks. Currently there is no alternative to oil, as much as the Sierra Club might like us to believe otherwise. America has lots of coal, but among other things coal requires lots of coal mines – and we have seen lately what can happen in a coal mine. America has lots of wind and sunshine, but what little power it provides only exists courtesy of fat subsidies that enlarge the national debt. Nuclear power? Not in my back yard!

True, more than half of our petroleum supply is imported, often from highly volatile places. But that is nothing new. America’s “dependence” on foreign oil goes back half a century. It has been increasing in recent decades, thanks in part to the refusal of the environmental lobby to allow any drilling in the United States.

Yes, there is probably an entrepreneur out there who will come up with a better idea. But it won’t happen because government is throwing billions at the problem. Government already has thrown billions at ethanol, but that has more to do with subsidizing corn farmers than seriously reducing dependence on oil. Even Greens are dubious about ethanol, which would require plowing up millions of acres to make a dent in petroleum use – or else require us to forego our addiction to food.

And how does isolating ourselves from unstable parts of the world square with Bush’s impassioned jeremiad, in the same speech, against the false temptations of isolationism and protectionism? Yes, some dysfunctional junta or other, say Iran or Russia, might be tempted to play the oil card. But not for long: the oil producers need the revenue just as badly as we need the oil.

Bush may find that his rhetoric comes with a steep price. If oil is an addiction, then we must be forced to deprive ourselves of it. The left is thrilled. Already there have been calls from Democrats for a “Manhattan Project” for alternative fuels. The Sierra Club’s Carl Pope gleefully declared that “the old energy game is up” and asserted that there is no longer any excuse for failing to clamp rigid controls on global warming emissions.

At the very least there will be calls for draconian increases in fuel economy in automobiles and/or sharply higher taxes on gasoline, as if the oil price increases of the last year weren’t sufficient. Will a President who has declared oil an “addiction” be in a position to resist? And what greater tool is there for the long-desired central planning of the economy than placing Washington bureaucrats in charge of energy use?

The era of big government is over, declared Bill Clinton in his 1996 State of the Union address. The era of big government is just beginning, declared Bush last week. What may be over, thanks to Bush’s addiction to rhetoric, is this president’s ability to pursue a growth agenda.

I'm not entirely 'Anti-Bush', but when he visited us here in Sacramento California, he blow off our sinking, fooded houses when he turned down any money for repairing and rebuilding the wannabee levees we have here. Here houses are flooding, entire valleys are in danger of flooding, and the levees don't work -- period. Why? What's his agenda for the 5th largest economic producer in the world? hhhmmmm....

Here Arny's got the obvious forthought to take action, and our Pres. has his eye focused on "Pie in the sky" alternative energies. That's a private sector focus, only for him to direct and market; Not the taxpayers responsibilty to pay. Who makes the money in the end? USA? or fat cats like exxon's 400million dollar retiree's...!


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