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Jewish World Review May 24, 2001 / 2 Sivan, 5761

Jack Kemp

Jack Kemp
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A supply-side energy plan

http://www.jewishworldreview.com --
SUCCESS in politics, as in governing, requires getting the big things right, and President George W. Bush succeeds in getting the big things right in his sweeping new energy plan. He understands that our energy challenge lies on the supply side, and he and Vice President Dick Cheney therefore move decisively on many fronts to free up energy production currently hamstrung by regulation, taxation and government interference at just about every level.

Bush and Cheney seek to remove barriers to putting new power plants on-line and strike the right balance between ecological values and surging energy demand. They understand that energy and the environment don't need to be at war with each other, whether in the Alaskan wilderness, on the Outer Continental Shelf or in siting new pipelines and transmission capacity. The controversy over oil exploration in Alaska concerns only 2,000 acres of a 19 million-acre reserve - about the size of Dulles Airport.

The key is to strike a balance, and for too long the scale has been weighted against increasing energy output and production. The fact is we are using energy with infinitely more efficiency than when I went to Congress in 1971, allowing us to do more with less. Per unit of production, we use 74 percent less energy than we would have used at 1972 levels. At the same time, we're well behind the curve in preparing for the future.

The administration seeks to reverse this trend by removing the obstacles to energy production while balancing production needs with environmental concerns. Exploration on public lands, expanding trade in energy, opening up ownership of transmission lines and spurring technological innovations that enable us to continue using energy more efficiently all are truly "green" approaches to the energy problem. So, in a way, is nuclear power, which Bush wants to revive as a viable source of new production by tackling safety, disposal and regulatory issues head-on.

The most important aspect of the president's energy plan may be its broad battery of initiatives that will both increase energy supply and reduce the energy intensity of each unit of economic growth. Wisely, both Bush and Cheney stress removing barriers to market forces in advancing these twin objectives.

Unfortunately, they also bow to political correctness by adding to the mix a bunch of subsidies and tax credits, i.e. "incentives" to conserve energy and produce more energy from what I call "boutique renewables" - wind, solar, biomass - all of which have failed to demonstrate market viability despite massive government subsidies since the so-called energy crises of the 1970s. Even worse, the plan calls for still more "appliance efficiency standards" that could price labor-saving devices beyond the means of needy households without producing any tangible benefit.

These gestures to hard-left environmentalists haven't bought the administration any friends on the left. The New York Times called the president's proposals "a nod to the conservationists whom Vice President Cheney has been belittling - the plan does little for efficiency or renewable energy." The Times, which relies heavily on fossil fuels to produce its products, calls the whole plan a concession to the fossil fuels industries: the same industries that have made huge contributions to our economy and well-being over the years.

The "Left Coasties" at the Times deny we have an energy crisis on our hands and claim we can conserve our way into energy solvency without throttling the economy. But if conservation and renewables were the key to energy abundance, California would be the showplace of the future, not the national embarrassment it has become where energy policy is concerned. Gov. Gray Davis may try to shift the blame to Washington all he wants, but no one's suggesting the rest of the nation emulate California!

As Kim Strassel pointed out in the Wall Street Journal, conservation per se does absolutely nothing to ease our energy problems. As she puts it, "Energy consumption hasn't gone down; rather, it has stubbornly risen by an average of about 1.7 percent a year since the early 1980s, despite the increasing weight of conservation policies."

Conservation, that is less waste in energy use, is indeed desirable, but it's a natural consequence of price mechanisms. When costs go up, as they've been doing lately, people are more prudent in using energy. As well as providing incentives for exploration and development, markets allocate capital efficiently while government misallocates costs.

The president has given us a bold and sound energy plan, not a perfect one. But for now, let's give the administration two thumbs up for resisting the trend Thomas Jefferson feared where liberty inevitably yields and government gains ground. To their great credit, Bush and Cheney have chosen to side with the forces of free markets, free enteprise and free people. Knowing the history of the 20th century, freedom works!


Jack Kemp is co-director of Empower America and Distinguished Fellow of the Competitive Enterprise Institute. Comment by clicking here.



Up

05/16/01: Getting Lincoln right
05/10/01: A good reason to borrow
05/01/01: Supreme Court makes racial profiling the law of the land
04/26/01: Campaign finance reform: silencing the lambs
04/17/01: Right wanted might in China case
04/12/01: How minority entrepreneurs can save the tax cut
04/04/01: Whose privacy is it?
03/29/01: A letter from Seoul
03/20/01: Ignore the double talk and double the tax cuts
03/13/01: Don't give up the bully pulpit on Social Security, Mr. President
03/06/01: Another attack on the economy
02/28/01: It's time to end deflation
02/21/01: Building blocks of humanity
02/15/01: Trumping the propaganda
02/06/01: The Gipper at 90
01/30/01: Kicking off a season of economic growth
01/24/01: The Bush tax agenda
01/17/01: Debating the Clinton legacy
01/10/01: No need for another Social Security commission
01/03/01: Truly a Golden Age, if we can keep it
12/27/00: The Grinch who turned off the holiday lights
12/20/00: Forging ahead
12/13/00: A new tax system for the 21st Century
12/07/00: Global government in retreat
11/30/00: An open letter to Fed Chairman Alan Greenspan
11/21/00: Don't forget the guy in charge
11/15/00: Civic virtue, civic vice
11/08/00: Memo to the president-elect
10/31/00: Scare tactics won't work
10/24/00: Prosperity in the balance
10/11/00: Al Gore's economics of fear
10/03/00: Al Gore IS debatable
09/27/00: Government should protect our online privacy
09/13/00: The most important issue
09/05/00: Defeating the Gore blitz
08/29/00: Workers of the world, rejoice
08/22/00: Just the facts, Mr. President
08/08/00: Reclaiming Lincoln's legacy
06/23/00: A renaissance for urban America?
06/16/00: Capital access can bridge 'digital divide'
06/08/00: Some friendly advice for Rick Lazio
05/26/00: Is the economy being saved or destroyed?
05/22/00: Immigration and the promise that is America
05/12/00: Stock market roulette or snobbery?
05/04/00: Is Rule of Law whatever we say it is?
05/01/00: Myths happen

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