Populism's Downside

Last week I posted my disgust at the Democrats sliding towards economic populism with regards to the nation's energy policy. While I was aghast at the House pushing through a bill that would punish the oil companies with an onerous tax if the market price of oil goes above a certain price, it pales in comparison to the ire I've developed(After reading the proposed legislation) after reading more details from this most recent review and outlook piece in the WSJ. Now while folks will argue that this bill has good intentions(At least that's what they want people to think) because it goes after "big oil" but in return it creates greater problems for the American people in the long run. All and all, the WSJ points out many factors of the bill that should be large blinking warning lights to the American people and members of the US Senate that this is a bad bill. Here's two components of the bill that caught my attention:

This bill is said to promote America's energy independence, but the biggest winner may be OPEC. This is a lengthy, complicated bill, but the central idea is simple: Raise taxes on domestic oil producers and then spend the money to subsidize ethanol, solar energy, windmills (so long as they're not on Cape Cod), and so on. But if you increase the cost of domestic oil production by $10 billion, you are ensuring that U.S. imports of OPEC oil will rise and domestic production will fall.

The bill also includes a "Strategic Energy Efficiency and Renewables Reserve" fund for alternative fuels. That sounds a lot like the Carter-era Synthetic Fuels Corporation -- one of the more notorious Washington boondoggles of all time, having spent $2.1 billion of tax dollars on alternative fuels before declaring bankruptcy. Today there is no under-investment by the private sector in alternative energy. The research firm New Energy Finance has found that between 2004 and 2006 investment in alternative energy doubled to $63 billion. Venture capital funding of green-energy technologies has quadrupled since 1998.

I'm all for helping the everyday person with lower energy prices but feel that passing the burden on the American people via higher taxes, restraints on domestic drilling, more red tape and driving us further into the arms of foreign producers(Less than friendly nations at that) isn't the way forward for greater energy independence.