Obama and the gas tax holiday

The gas tax holiday is a classic political pander: an idea that seems good only to those who don’t understand it. Barack Obama should give a high-profile public speech to explain exactly why the McClain-Clinton proposal is sucha bad idea. The arguments are simple and persuasive. If Obama cannot make them seem compelling, he is not the brilliant orator we all believe him to be.

Many of his supporters have been recommending that Barack Obama focus most of his attention on John McCain, arguing that further exchanges with Hillary Clinton lend credence to her dubious claim of still having a path to the nomination. The fact that both McCain and Clinton have now backed the same demonstrably insane summer gasoline tax holiday provides a perfect opportunity for Obama to take aim at McCain in a way that will also limit Clinton’s ability to profit from her proposal.

For reasons that Mark and Michael have clearly laid out in earlier posts, the McCain-Clinton proposal is a classic political pander &#8212 a proposal that sounds good to low-information voters, but whose effect would be to exacerbate the very problem it purports to solve. Obama, to his credit, has denounced the proposal. But in the furor over Jeremiah Wright, his response received little attention. In the meantime, Clinton’s ads touting her support for the tax holiday are probably winning votes. After all, that’s why politicians pander in the first place.

But this combination of events provides Obama with a golden opportunity to turn the issue to his advantage. He can do this by scheduling a high-profile public speech whose announced purpose is to explain why McCain’s gas tax holiday is a such bad idea. The arguments are simple and persuasive. If Obama cannot make them seem compelling, he is not the brilliant orator we all believe him to be. This speech would challenge McCain’s perceived strength as a straight-talker, because the proposal is the polar opposite of straight talk. After explaining why, Obama should challenge members of the press to find a single reputable energy expert or economist who believes otherwise. There aren’t any.

Author: Robert Frank

Robert H. Frank is the Henrietta Johnson Louis Professor of Management and Professor of Economics at Cornell's Johnson Graduate School of Management and the co-director of the Paduano Seminar in business ethics at NYU’s Stern School of Business. His “Economic View” column appears monthly in The New York Times. He is a Distinguished Senior Fellow at Demos. He received his B.S. in mathematics from Georgia Tech, then taught math and science for two years as a Peace Corps Volunteer in rural Nepal. He holds an M.A. in statistics and a Ph.D. in economics, both from the University of California at Berkeley. His papers have appeared in the American Economic Review, Econometrica, Journal of Political Economy, and other leading professional journals. His books, which include Choosing the Right Pond, Passions Within Reason, Microeconomics and Behavior, Principles of Economics (with Ben Bernanke), Luxury Fever, What Price the Moral High Ground?, Falling Behind, The Economic Naturalist, and The Darwin Economy, have been translated into 22 languages. The Winner-Take-All Society, co-authored with Philip Cook, received a Critic's Choice Award, was named a Notable Book of the Year by The New York Times, and was included in Business Week's list of the ten best books of 1995. He is a co-recipient of the 2004 Leontief Prize for Advancing the Frontiers of Economic Thought. He was awarded the Johnson School’s Stephen Russell Distinguished teaching award in 2004, 2010, and 2012, and its Apple Distinguished Teaching Award in 2005.