Accuracy in Media

When asked what it would be   like to live in an America where gas costs $6.40 a gallon, William Beach,  Director of Data Analysis for the Heritage Foundation, replied, “Well,  it’s like this. It’s like you just woke up in France.” This worst   case scenario seems all too imminent, with gas prices forecasted to   reach an average $6.40 a gallon by 2016. Contrary to popular opinion,  the price increases will stem from more than gas-guzzling corporations   or world supply shortages. Instead, it will be the willful creation   of the largest price gouger of all, the U.S. government.

Current energy legislation   such as H.R. 6 and S. 1419, among others, could add additional excise   taxes on both imported and domestically refined oil, which would dramatically   raise the cost of petroleum products in the United States irrespective   of outside market forces. The legislation also calls for higher corporate   average fuel economy (CAFÉ) standards and new energy efficiency standards   for home appliances.

These upcoming changes have   already sparked media interest, producing articles tacitly in favor   of the changes. Mike Spector, a writer for the Wall Street Journal,  recently wrote an article carried by the Washington Post Express, titled   “Gear Shift in Guzzling.” It discusses the merits of the European   auto industry and its applicability to American life. However, it does   not mention alternative perspectives on upcoming legislation and sidesteps   the question of whether such harsh taxes are appropriate, or why they   are occurring.

Throughout his process of communicating   what amounts to a favorable policy evaluation, Spector integrates several   false assumptions about energy policy into his article. Firstly, he   assumes that egregious tax hikes are necessary to persuade the public   to purchase fuel-efficient vehicles. Otherwise, he must face the question   of why hybrid car sales still only garner a 3% market share, and do   not seem to be sparking much consumer interest. This interventionist   approach is predicated on the assumption that government regulation   properly serves to correct the “market failure” of gas over-consumption   by artificially inflating public demand for hybrids, diesel engines,  and fuel-efficient vehicles.  In reality, government intervention   in the economy does not necessarily fix economic problems, so much as   shift negative outcomes into other economic sectors.

Not long ago, sources such   as CNN were pointing to $3-per-gallon gas as the magic mark at which   American fuel consumption would decline. This moment has come and gone,  and now the media are raising the estimates to $4.50 or more to accommodate   for the perplexing phenomenon of increased fuel consumption. The Energy   Information Administration estimates that domestic petroleum use will   grow 1.5%  this year.

It becomes readily apparent   that American demand for fuel is highly inelastic, and the costs of   additional excise taxes will be easily transferred onto consumers. These   high costs will not cause a significant reduction in fuel use; rather,  they will slow our economy by reducing demand for such things as clothing,  DVDs, theater, art, and other commodities. In addition to the economic   downturn—which could cost jobs—living costs will rise significantly.  According to the EIA, 89% of the nation’s non-fuel energy consumption   requires petroleum products. This means that the cost of plastic, synthetic   fabrics, and even food will increase at the very moment when people   need to tighten their belts and shift more money into their gas budgets.

Spector omits any mention of   possible economic decline in his article, listing instead two minor   costs of emulating Europe: smaller engines and decreased performance.  He never defines “decreased [vehicle] performance.” By oversimplifying   the costs of fuel-efficient cars, Spector virtually dismisses opposition   to the politically correct virtue of hybrid vehicles and other fuel-efficient   transportation. By defining the debate in simplistic terms—hybrid   cars good, gas-guzzling bad—Spector misses the point that larger vehicles   sacrifice some fuel efficiency in favor of a safer, sturdier frame.

Placing increasing numbers   of diesels and hybrids on the market should not be characterized as   a simplistic “upshot for U.S. consumers,” especially given the health   risks posed by diesel exhaust. These risks include increased asthma   attacks, allergies,  and even lung cancer. The EPA classifies diesel   exhaust as a “likely carcinogen,” and has recently established new,  low-sulfur requirements for diesel fuel in order to try to limit some   of this secondary pollution. Until the pollution released by diesel   engines has been minimized, diesel-reliant vehicles are unlikely to   form the new backbone of American transportation.

Dr. Bradley, President of the   Institute for Energy Research, notes that “the energy road to hell   is also paved with good intentions.” Perhaps an artificial spike in   petroleum prices, while well-intentioned, could create a virtual hell   for the American populace. After all, lower living standards, decreased   market competitiveness, and increased pollution seem like a rather high   price to pay for hybrid and diesel cars.




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