Obama embraces the failed policies of the past

Michael Gerson:

High oil prices, like a walk under the summer moon, can drive normally rational people to do foolish things they later regret. For Barack Obama, it is a fling with a windfall profits tax on American oil companies -- one of the most thoroughly discredited economic policies of the past few decades. A 2006 Congressional Research Service report found that Jimmy Carter's version of the tax generated less than one-fourth of expected government revenue while depressing domestic oil output between 1.2 percent and 8 percent and increasing dependence on imported oil between 3 percent and 13 percent.

It is typical of a tired economic liberalism to look at the global energy crisis and see American companies as the problem -- even if punishing them leads to greater dependence on foreign oil. But it is also naive to believe this dependence will be addressed by the normal working of energy markets.

Those markets are producing what one economist calls the "greatest wealth transfer the world has ever known." In a single year, the revenue of oil- and natural gas-producing Persian Gulf states have nearly doubled -- giving nations in the region hundreds of billions of surplus dollars to play with. Recent Saudi promises to increase oil production may help ease prices. It is also the profitable accommodation of an addiction.

...

His embrace of the discredited windfall profit tax is like his embrace of higher taxes on capital gains even though it reduces revenue. Obama has to be the most economic and history challenged presidential candidate in recent memory. He looks at the tax code as an opportunity to punish achievement so that he can use the proceeds to reward failure. He in effect doubles up the wrong side of encouraging progress and prosperity.

He is also willing to continue the wealth transfer to the Middle East rather than encourage domestic production. It idiocy of his energy policy is blatant enough that voters should be able to see it and reject it if they can get over their anger about Bush being right about the surge.