Energy Secretary Steven Chu, a winner of the Nobel physics prize and therefore in the mind of the public a certified genius, walks to work. At least part way. He engages in this strange activity because the gentleman does not own a car.
This is not especially eccentric. For example, yours truly also does not own a car, and has not owned one for twice seven years, a period of time that threatens to stretch even unto infinity. The difference between Secretary Chu and people like me is that I do not own a vehicle because of penury (and because I live in a metropolis where it is nuts to drive). Chu, a beneficiary of the bureaucracy, can afford a fleet of cars but chooses not to own because of religious reasons.
Chu walks (or rather is driven in a taxpayer-funded car) to “save the planet.” The danger that imperils the “planet”—a very large and historically robust astronomical object—is, according to Chu, gasoline. In 2008, Chu was asked about his animus regarding this miraculous substance, a driver of a large proportion of the world’s economy, and he said,
Somehow we have to figure out how to boost the price of gasoline to the levels of Europe.
Now the reason he said this is because he does not want people buying gasoline. He figures that if it is ridiculously expensive, as it is in Europe, that people will buy less of it. It is Chu’s economical theory that if people buy less of it, less of it will be used, and that therefore the planet will be “saved.”
It is also his view that if gasoline is prohibitively expensive, for all but the rich and for government bureaucrats who are driven wherever they wish to go and who never have to visit a gas station, innovation will be spurred and that “alternate fuel sources” will be developed.
There is a kind of logic at work here. But not of the kind found in textbooks. It is true, on average, that if a thing that is wanted is too costly, people will strain their gray matter to develop alternatives or workarounds. These replacements often, but not always, succeed. They also do not always meet needs in the time required.
But it is possible that by artificially increasing the price of gasoline—by taxing it, say, and adding the money to the Washingtonian beast—that some bright person will figure a way to replace that fuel by a new one. It does not of course follow that the new fuel will be “better for the planet” than the old fuel. It may even be, as seems likely, that gasoline is, among all alternatives, the best fuel.
At least the way the transportation system of the United States is now constructed. Most people in this grand country live far from everything: far from their jobs, far from grocery stores, far from their friends and relatives. Walking isn’t in it; driving is a necessity. It is thus exceedingly highly probable that abruptly increasing the price of gasoline to Chu-friendly levels will have the exact opposite effect as that intended.
That is, innovation will not be spurred because people will not be able to afford to do anything except pay for the fuel to drive them to work. The economy will suffer, as all evidence indicates it does when fuel prices rise “naturally.”
And that means that the money that comes from taxes (of all kinds) must decrease. The effect of that will be either larger deficits or increased taxation, or both, actions which further depress the economy. Even to the point of not having the funds to build “public transportation.” It should also be clear that the taxes raised on gasoline will decrease, even though the tax rate has been raised.
Well, so much is obvious, at least to average citizens. But not to Chu, who like many intelligent people, confuse their ability to know a lot about very little—Chu’s prize was for “for development of methods to cool and trap atoms with laser light”—into thinking they know a lot about everything. Even this would be okay, except that they conjoin this mistake with the additional belief that people who are not credentialed in knowing a lot about little, know nothing about anything.
Now that Mr Obama is up for re-election, and Chu’s earlier comments have been discovered, he has, in Washington speak, “backed away” from his economic vision and said that certainly he meant by saying that he wanted higher prices that he actually wanted lower prices.
Jay Carney, the president’s spokesman, finally forced to respond said, “I know that it’s part of the fun for folks to find these quotes and suggest that they have some deeper meaning.” I’m not sure what Carney means, because I find no humor in Chu’s words.
People in positions of power and authority who make public pronouncements like this should be required to produce a spreadsheet analysis of the dollar cost and dollar benefit of their idea. This would require real work and thought and thus reduce the number of such pronouncements vying for attention.
We didn’t arrive at this place where automobiles are (mostly) required for daily living. People chose to live in single family detached houses at greater than walking distance from retail shopping. People chose to own cars rather than use public transportation. People choose to drive big cars/trucks/SUVs/vans or small, inexpensive fuel efficient cars/scooters. People are free to live in expensive high-density neighborhoods in Chicago or New York and the more that choose to do so, the more expensive housing will become and the greater the burden of subsidized mass transit will be.
I would love to walk to work in downtown Chicago from my (multi) million dollar condo — but only if I could easily escape by helicopter on weekends to a country place in Wisconsin or Michigan. My compromise is to drive a few miles to work from a modest house in a nice suburb with good schools and convenient shopping.
Our first big gasoline price shock came in the 1970s with the Arab Oil Embargo — high prices and long lines. People have had four decades to eschew suburban life in favor of high density gasoline free city living and have not. We have voted on energy policy by our actions and with our checkbooks. Washington pols should look out their windows at wealthy suburbs in Loudoun, Fairfax, Howard and Montgomery counties to see where and how Americans really want to live.
I have a bet going with a friend that gasoline will have reached $3 / Liter by the end of 2013. It’s a bet I can’t lose. Either Im right and get to rub it in, or I’m wrong and get to keep driving.
“It should also be clear that the taxes raised on gasoline will decrease, even though the tax rate has been raised.”
This statement is not true. Replacing “will” with “may” or “will likely” — or some other qualifier of uncertainty — makes it true.
I’d like to be sitting at the foot of Chu’s bed when he wakes up for a workday. I suspect he’d be humourless. tedious and not very smart.
His home would be pathetic.
Bully for him. So what?
Dr. Briggs,
In this post you’ve implied (though not specifically claimed) that you have expertise in economics, geophysics, tax policy, and urban planning. I infer from your site and your past writings (though I don’t know) that your doctorate was earned in some statistical or mathematical subject area.
So, how are you not guilty of the fault of which you accuse Dr. Chu (that of imagining that his expertise in a very limited area makes him qualified to speak with authority on matters unrelated or, at best, tangentially related to his area of demonstrated expertise)?
Well, what do you expect from a PHD? Years ago I worked in the antenna section of a major corporation and designed microwave antennas. Ther wasn’t any anlytical method to design microwave feed horns, just some rules of thumb. When we produced a new design it was tested on the antenna range to see how it performed, and if it didn’t do well you would tweak the design and try again. This was very time consuming and expensive so we needed a method to predict the performance before fabricating the feed horn. The antenna section hired a new PHD and set him to work on the problem. Eventually he came up with an equation to calculate the radiation pattern of the feed horn. It was a horrible integral equation which nobody knew how to solve. We made jokes about the PHD solving our problem with an unsolveable equation.
The morale of this story is, don’t expect a PHD to come up with a useful practical solution to your problem just because he’s real smart.
Why should Chu walk tax-free on sidewalks built with other people’s money, chiefly gas taxes?
Easy solution: Federal excise taxes on shoes. And bicycles, skateboards, strollers, etc. Or how about toll sidewalks?
BTW, guess who provides the funds to build hiking trails in our National Forests? If you guessed hikers (haha), you are way off, dude.
Rob,
Not only that, but my Italian meatballs are the envy of the city.
Dr. Briggs,
Have you demonstrated the superiority of your Italian meatballs in a double blind experiment and consequent low p value?
If not, and if I happen to be in town, I’ll volunteer to be a participant.
Hi petrol prices in Europe is not lost money for the car driver. It is a major part of the government budget. Lower petrol tax means more tax elsewhere for the same level of service. It has many advantages as a tax. It is easy enough to collect. The taxed can adjust their behavour to minimise thier exposure. It buffers the economy from massives shifts in crude prices.
We want folks to run smaller cars for air quality reasons, our roads are small and not easily widened, small cars are safer when they hit people, and other small cars. We can adjust car purchase taxes, road cost, and petrol to get the urban environment we want.
I am not arguing you can go from low price to high price rapidly. Lifestyles and city layout reflect traffic patterns reflect gas price. It is a reasonable policy which you may chose not to follow. Some costs need to factor in is the additional costs to have more hugh roads, jams, noise and air pollution.
Rob,
The p-values could not be lower than the silliness of your first comment and the vapidity of your second. Or is it the vapidity of your first and silliness of your second. In either case the p-values would be lower, since you must have a large sample size for both through years of practice.
Deebee,
So you’re saying that the silliness level and the vapidity level of my first and second comments are extremely low?
Thank you.
We would all be so much better off if these genius could recognize that everything is subject to the Constructal Law http://www.constructal.org/.
Economies, collective behaviors, technologies, biological organisms, industries….
Sigh.