Don't Listen To Dick Morris

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In today's New York Post, Dick Morris reads the most recent polling tea leaves, and recommends  that the way for President Bush to regain his popularity in the face of $3.00 per gallon gasoline is to "declare the equivalent of the bomb—building Manhattan Project and embark on a crash course to switch us from gasoline to alcohol— and hydrogen—based fuels."  What a bunch of economic, and political, poppycock.

The heart of Morris' argument is that the high price of gasoline is the most important issue of the day —— more important than Iraq or immigration —— and that the federal government can solve this problem with a massive research and development program in "alternative fuels."  The difficulty for Morris, of course, is that there is no evidence that alternative fuels will be cheaper energy sources than gasoline.  On the contrary, there is sound economic reason to believe that they will be much more expensive.

Quite simply, if alternative fuels were a viable substitute for gasoline, there would be huge entrepreneurial opportunities in this area —— i.e., big bucks to be made —— which would call out the best business and scientific minds in America.  Yes, there are scientists in many institutions today who are conducting research in this area.  But, like biogenetic engineering, the field is in its infancy and few, if any, profits are available for ordinary investors.  Hence, only subsidized —— i.e., money—losing —— research currently is taking place in this field.

Nevertheless, Morris proposes an enormous, government—mandated transfer of wealth from taxpayers to the "alternative fuels" industry.  But if alternative fuels were economically viable —— if they could meet our energy needs at a cost equal to or less than gasoline —— then the free market already would be leading investors into this area —— without the need for government spending programs, and the waste and corruption that inevitably go along with them.  But the marketplace has not, as yet, shown that "alternative fuels" are, in fact, a viable source of energy.  The upshot is that alternative fuels would be more expensive than gasoline, not less.  So they would cost more, not less, than gasoline per mile driven.  Hardly the solution to high gas prices.       

Not only does Morris not understand the economics of alternative fuels, his political instincts on this issue are off as well.  Leave aside his lazy reliance on polling data (as always) supposedly showing that gasoline prices are of greater concern to the country than Iraq or immigration, which is an implausible proposition on its face.  The notion that the American public would support a multi—billion dollar spending spree on unproven energy technologies is preposterous.  Certain factions of the Left might support such a program, but the average American would resent having more of his money taken by the government and spent on an immature, unproven field —— all based on wishful thinking rather than real science.

What America needs is less, not more, government involvement in the domestic energy industry.  We are in the energy bind we are in today precisely because government at all levels has restricted the ability of domestic energy producers to develop additional sources of energy, whether petroleum, coal, or nuclear.  These are the only available large—scale sources of energy with which to run our large, complex society. 

I agree with Morris that greater energy independence should be a central component of both our national security and economic development policies.  But "alternative fuels" simply are not the answer, and spending billions of dollars of taxpayer money in this area would only enrich the special interests.  It would do nothing for the American people, and it certainly would not improve President Bush's popularity.

Steven M. Warshawsky   11 22 06

In today's New York Post, Dick Morris reads the most recent polling tea leaves, and recommends  that the way for President Bush to regain his popularity in the face of $3.00 per gallon gasoline is to "declare the equivalent of the bomb—building Manhattan Project and embark on a crash course to switch us from gasoline to alcohol— and hydrogen—based fuels."  What a bunch of economic, and political, poppycock.

The heart of Morris' argument is that the high price of gasoline is the most important issue of the day —— more important than Iraq or immigration —— and that the federal government can solve this problem with a massive research and development program in "alternative fuels."  The difficulty for Morris, of course, is that there is no evidence that alternative fuels will be cheaper energy sources than gasoline.  On the contrary, there is sound economic reason to believe that they will be much more expensive.

Quite simply, if alternative fuels were a viable substitute for gasoline, there would be huge entrepreneurial opportunities in this area —— i.e., big bucks to be made —— which would call out the best business and scientific minds in America.  Yes, there are scientists in many institutions today who are conducting research in this area.  But, like biogenetic engineering, the field is in its infancy and few, if any, profits are available for ordinary investors.  Hence, only subsidized —— i.e., money—losing —— research currently is taking place in this field.

Nevertheless, Morris proposes an enormous, government—mandated transfer of wealth from taxpayers to the "alternative fuels" industry.  But if alternative fuels were economically viable —— if they could meet our energy needs at a cost equal to or less than gasoline —— then the free market already would be leading investors into this area —— without the need for government spending programs, and the waste and corruption that inevitably go along with them.  But the marketplace has not, as yet, shown that "alternative fuels" are, in fact, a viable source of energy.  The upshot is that alternative fuels would be more expensive than gasoline, not less.  So they would cost more, not less, than gasoline per mile driven.  Hardly the solution to high gas prices.       

Not only does Morris not understand the economics of alternative fuels, his political instincts on this issue are off as well.  Leave aside his lazy reliance on polling data (as always) supposedly showing that gasoline prices are of greater concern to the country than Iraq or immigration, which is an implausible proposition on its face.  The notion that the American public would support a multi—billion dollar spending spree on unproven energy technologies is preposterous.  Certain factions of the Left might support such a program, but the average American would resent having more of his money taken by the government and spent on an immature, unproven field —— all based on wishful thinking rather than real science.

What America needs is less, not more, government involvement in the domestic energy industry.  We are in the energy bind we are in today precisely because government at all levels has restricted the ability of domestic energy producers to develop additional sources of energy, whether petroleum, coal, or nuclear.  These are the only available large—scale sources of energy with which to run our large, complex society. 

I agree with Morris that greater energy independence should be a central component of both our national security and economic development policies.  But "alternative fuels" simply are not the answer, and spending billions of dollars of taxpayer money in this area would only enrich the special interests.  It would do nothing for the American people, and it certainly would not improve President Bush's popularity.

Steven M. Warshawsky   11 22 06