Amid the economic meltdown and limited clarifications of how mainstream economics really works, here comes President Obama with a shocking proposal — to eliminate many federal subsidies to Big Oil. After the shouting dies down, this announcement could serve to focus and clarify the dialog about private versus public transportation in the United States. I hope it will elevate the topic above the impenetrable, gluey morass of politics to the realm of finances and economics wherein lie the true disparities.

Historically, much debate on transportation has been predicated on incomplete and false information. The resultant hysterical, political duality poisoned the debate and created a salubrious environment for the oil and the car biz who along with their sycophants in congress are responsible for a transportation sector sold as much on sex and egos (watch some television auto ads) as moving people. Were the curious to take the time to uncover and familiarize themselves with the facts, the correct information would go far to dissipate much of the decades-long argument.

Among the banquet of the oil business’s concealed externalities, the appetizer would have to be infrastructure costs, a matter that ignites most of the shouting. The most persistent and frequently cited myth of our autophilic world is that user fees, tolls and gasoline taxes cover the cost of roads. The facts show* that user fees cover only half the costs of infrastructure, about $75 billion annually (in 1998 dollars), leaving somewhere between $36 and $112 billion to be secured from you, Joe Taxpayer — whether you drive or not.

Besides state and federal allowances, credits, deferrals, under taxations, write offs for oil extraction, production, research and development; numerous social, environmental and health liabilities, subsidized parking, revenue lost via travel delays la-de-dah. the most unconscionable and immediate costs are those associated with protection for the cheap crude oil the industry dotes on, much of it situated in inhospitable regions where the Pentagon seems to reside more or less permanently at a cost somewhere between $55 to $100 billion per year. This ignores the impossible to factor loss of military and civilian lives, all the more egregious in light of substantial (but costlier) reserves closer to home. People pay with their lives to prop up the profits EXXON, Mobil, Shell et al. make off the cheaper overseas stuff.

The paradoxes and inconsistencies to those who support free markets should be obvious. The externalities that make the oil/car hydra seem like a deal costs US taxpayers between $600 billion and $1 trillion or so per year, largess were it extended to flesh and blood persons rather than the corporate paper and money sort would have howls of “socialism” ringing from every corner. Socialism is socialism and that is precisely what exists. Were the price of fuel not so heavily subsidized by the costs buried deep and invisible in your income tax bill, you would be paying somewhere between 5 and 15 dollars a gallon, a fiscal reality the average driver caught a taste of during Wall Street’s commodity craze last year — or on a trip to Europe. Suddenly, overnight, people began riding bicycles and public transportation, moves that continue to grow even though the price of a gallon of gasoline has declined.

Granted, the auto-led low-density development sprawl model created a demographic and a (formerly) robust economy, a powerful nation built on subsidized oil. That changes nothing in the clear, icy world of economic ideology. What is, is. The glaring truth behind the shouting and pose is that this system has evolved into some sort of privatized, through-the-looking-glass version of the Soviet Union, just as far removed from a “free market,” just as synthetic and subject to catastrophic failure. Were the US to overnight completely abandon the heavily subsidized trap the people stupidly allowed themselves to be led into, the rise in the price of gasoline would paralyze those parts of the nation with no alternatives and likely foment some limited, localized civil unrest. 5 bucks a gallon has starkly different meanings in New York City or North Dakota.

Authentic free market types should work toward reducing corporate socialism, a proposal I do not oppose, but we live in the world we live in and it isn’t going to go away — completely. But, heck, a trillion plus a year is mad money, the equivalent to our annual defense budget including entitlements or ten years of improved heath care. Let’s try some “fair markets,” then we can talk about free.

Although 180 million or so drive cars, the rest don’t, yet are paying for those who do. How about let’s shunt a tiny percentage of big oil’s breaks to mass transit. Who’ll miss a couple of hundred billion? Isn’t it only fair that we non-drivers get some of the gravy train?  The price of oil rise will rise accordingly and the shift in the market will probably foment a partial shift to public transportation. The United States will be cleaner, safer and less subject to the whims of foreign potentates. Once the citizens wise up to this faux “free market” (aka globalization) shell game, then we can maybe explore moving a skooch closer to the real thing.

It’s time to acknowledge the myth of the free market and the pointlessness of any arguments for or against. As with religion, there are no means to settle a dispute when there exists no body of proof. In the case of religion the only evidence of God(s) are the words of humans. Similarly, with Free Markets there is no purpose discussing the successes or failures of something that exists solely in the visions of deluded idealists and economists. There they are destined to remain for as long as nations and people, natural and other, grope for the sorts of temporary advantages evidenced by fuel subsidies and the many other examples of government largess.

* The Real Price of Gasoline, report no.3. International Center for Technology Assessment, November, 1998.



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2 responses to “Petroarchy

  1. Beef

    “Although 180 million or so drive cars, the rest don’t, yet are paying for those who do.”

    Do you really believe that people who don’t drive receive zero benefit from public roads and efficient tranportation? Where would you ride a bicycle? Where would the buses go? How would you get food and supplies to the high density, highly regimented human storage compunds that the smarxist growth types dream about? Drivers acually pay twice; once with fuel taxes and then again through the general fund. It’s the cyclists and bus riders that are freeloading and the system.

    People buy and drive cars because the ability to travel where you want when you want is incredibly empowering and liberating. It’s all about freedom, and that many people seem threatened by that is, quite frankly, their problem and not mine

  2. Binks

    Hey Beef (Nice)

    It seems that you may not have read attentively or simply can’t read. Never was the mention made of roads being a negative, only that non-drivers have to pay for all of them. Remember (that reading part again) the sighs stating bicycles being illegal on the most expensive of them, our extravagant limited access highway system? It is only proper drivers should pay more.
    One of the primary points was that EVERYONE pays for roads via taxes — as well as the fat behests to the petroleum corporations.
    I smell (and pay) for your your freedom, bud. Free to be hooked to car payments, repairs, insurance, vehicle taxes, fuel, tires on and on and on, ad nauseum ’till you’re sick. Ahhh, the sweet smell of almost burned fuel. Far from being threatened by your childlike autolation, it’s more like amusment, coupled with a measure of incredulity of your narrow lock-step, j
    ja ja, vision. Best of luck.

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