Monday, June 23, 2008

John McCain's energy plan: creative and practical.

John McCain proposed a truly brilliant incentive for developing a battery that could replace the internal combustion engine.

Johnny Mac starts with a pretty monumental prize (although, I’m sure the government would get most of it back in an income tax of some sort) but even at $300 mil such
an invention would save the United States government alone probably ten times that amount in the first couple of years.

Such a device would also revolutionize the American economy, almost overnight. Needless to say, the cost of gasoline for existing fossil fuel engines would fall to the floor. Imagine the economic boom if an American company obtained a patent on such an invention. Those Michigan jobs would return, would they not?

Americans have always achieved when given an incentive to do so. For generations the American economy rewarded the builder of the better mouse trap. The 1990s created a new economy that rewarded efficiency of service instead of superiority of product.

Senator McCain’s creative bonus plan is not a total solution to America’s energy problems but it certainly is a good start. The rest of the Republican plan Senator McCain offers includes such free market incentives as a $5,000 tax credit for every consumer that purchases a zero emissions car.

The Obama plan, of course, more tax and regulation with no predictable result other than the existence of the tax and regulation itself. What would simply prevent the the more heavily taxed and regulated energy producers from simply passing those costs on to the public? Nothing, you say. Ask Grey "out" Davis how tigher regulation of energy worked in his state.


RF said...

"Ask Grey "out" Davis how tigher regulation of energy worked in his state."

It was lack of regulation that caused the CA energy disaster. Total disregard for facts does not help your argument.

When it comes to energy, what McCain needs to explain is his stance on climate change. Is he serious about it or not? If he is, he needs to explain why he's for the drill everywhere approach. If he's serious about climate change, we need to focus our money and other resources on serious efficiency push and low or no-carbon fuels.

I have to say he's right about the importance of battery technology. But in the long term, serious commitment to basic energy R&D is key. We do have many other issues besides the battery to solve.

When it comes to the short term oil price issue, McCain is completely off the mark with his gas tax holiday. What is he going to say when he depletes our highway infrastructure fund and the next bridge collapses? Obama is right on the mark with his focus on investor speculation. Many analysts think up to $60-70 of current oil price is thanks to those lightly regulated/unregulated speculators.

Anonymous said...

"It was lack of regulation that caused the CA energy disaster. Total disregard for facts does not help your argument."

Ted has never let facts interfere with a good political strawman - why should today be any different?

noneed4thneed said...

I would comment, but I am busy tinkering around in my garage with a couple AA batteries, some duct tape, and a straw. I'm getting that $300 million, I know it!

Anonymous said...

Shit. Just write the damn check now to some Toyota flunky. When it comes to innovation those little yellow monkeys have owned our ass ever since we handed them theirs during WW II.

Art A Layman said...


I do have to question McCain's fiscal responsibility. A sum far, far less that $300 million would be sufficient motivation. Of course, he wouldn't have that cute little sound bite of, "for just a dollar a person".

Never let fiscal responsibility or common sense get in the way of a good sound bite.


You and I have attempted to educate sporie before on the Cal energy problems. Like any good conservative, facts and truth is not what it's about. Just as in law, it's all about winning.

The Real Sporer said...

Art/rf-guys, the world didn't start yesterday.

Not even the California liberals, ok, not the sane ones, agree with you.

Kalifornia had the most tightly regulated energy production and utilities in the country, for over twenty years.

While demand was sky rocketing the regulators/enviros prevented new production and prevented the kinds of gradual increases in cost that allow reasonable adjustments to be arise-like the population demanding new power stations and refineries.

EVentually, pretty much all of the local utilities went into Chapter 11 and the inevitable deregulation occured because California needed power and had to buy in it Texas and Mexico. By then, the relationship between demand and supply had become completely disconnected and prices began the rocket ship ride to Uranus.

Art A Layman said...


Americans have always achieved when given an incentive to do so. For generations the American economy rewarded the builder of the better mouse trap. The 1990s created a new economy that rewarded efficiency of service instead of superiority of product.

Throughout most of our history Americans achieved without any direct incentive other than perhaps potential rewards from the marketplace. It is one of our biggest economic/cultural problems today that everyone must be motivated to achieve excellence by some sort of over and above remuneration.

We pay CEOs, and other execs, rather large salaries to do a job. Then we have to offer them incentives to do the job that we were paying them a salary to do in the first place. We have even segued to signing bonuses for CEOs, what the hell is that all about?

We have to offer subsidies and tax incentives to corporations and other groups to direct their resources to invest for the common good. Then we end up with things like the "splash and dash" process with biodiesel fuel.

Love of country and patriotism used to be the battle cry for recruiting military personnel, of course there was that little thing called "The Draft", but today we have to offer all kinds of incentives to get recruits.

We even have folks who will offer bonuses to "hit" men if they handle the "hit" with extra special professionalism.

Ain't the free market great?

The one thing you can say for many lawyers, the trial lawyers, they often take cases on a contingency basis. If they win the case they win big bucks, usually, and if they lose they get nothing or just a bare minimum fee to cover out of pocket expenses. Now that's incentive!

Art A Layman said...


By then, the relationship between demand and supply had become completely disconnected and prices began the rocket ship ride to Uranus.

Helped along significantly by greedy, price manipulating Enron, acting as a Klingon.

De-regulated vital industries would be great if we could count on the integrity of industry. Alas, capitalism knows no morals.

RF said...

I’m also wondering how exactly we would determine who deserves the prize. Creating a battery with certain characteristics is not exactly as clear cut as who finishes first across the finish line. I’m afraid we would spend another $300 million in litigation.

Anonymous said...

Black Obama plans to create a new tax to fund his $300 million dollar fantasy to find some alternative energy that only exists in the figments of democrats imagination.

Republicans believe we can drill our way out. Democrats believe they can tax our way out.

Oil is a renewable energy source. It's not finite. God didn't give us a finite oil source. It renews. It regenerates. Dust to dust - ashes to ashes.

We will always need oil. We need to drill on our own land and stop having other countries do it for us. That is wrong and selfish.

Anonymous said...

The democrats announced this morning that they want to "take" the oil from Iraq for 100 years since they "owe" us.


Wasn't it democrats who kept accusing Bush of going to war for the oil?

Now, the democrats show their true colors. They think Iraq is our own personal oil pit.


Art A Layman said...

hey sporie:

Just a little facts update since you seem to hold Gray Davis most responsible for California's energy problems.

From 1983 to the present, a period of 25 years, the Dems held the office of Governor just 4 of those years, the aforementioned Mr. Davis.

Surely you can't expect we Dems to overcome all the problems we inherit from you Reps in just 4 short years, the last of which was spent fighting for his political life.

Art A Layman said...


Sorry, oil is just one more of those cruel jokes that God likes to play on us. Most likely the only place where oil is infinite is Hell where it's needed to keep the home fires burning.

vlad the impaler said...

"I am very angry, frankly, at the oil companies not only because of the obscene profits they've made but at their failure to invest in alternate energy to help us eliminate our dependence on foreign oil. They're making huge profits and that happens, but not to say, 'We're in this so we can over time eliminate America's dependence on foreign oil,' I think is an abrogation of their responsibilities as citizens."
[John McCain]

Let's compare profit margins:


Someone needs to tell McCain to shut the hell up.

Art A Layman said...


Profit margins are Net Profits/Gross Revenues. Since the federal, state and local per gallon taxes are excise taxes, they are included in gross revenues and then subtracted as costs of production.

Since those taxes are truly more like "trust" taxes, actually imposed on the consumer, ie, withholding, SS, they are not really a part of the actual sales and should not be included in gross revenues. I have not been able to find how much those taxes are in total for Exxon but they are big numbers.

Now the effect of that accounting treatment, and it is acceptable accounting treatment, is to inflate gross revenues with profits remaining where they would be in either case. If we deduct those taxes from gross revenues then profit margins go up.

In 1999 Exxon's profit margin was 4.4%, much more in line with their historic margins. From 1999 to 2007 Exxon's sales rose by 115% but their profits rose by 413%. See anything wrong with that picture?

vlad the impaler said...


are you listening McCain? said...

Art A Layman said...


Please try and avoid posts that pique my interest. It takes away valuable time from my masturbating.

Art A Layman said...


Though you appear quite proficient in posting numbers, your ability to understand numbers could use a little work.

vlad the impaler said...

Their profit margin rose as well. If a profit margin rises, profits increase. Exxon's profit margin is less than Google or Apple. I don't see the liberals complaining about those two.

Despite the beliefs of McCain and Obama, the government does not have the right to tell a corporation how much they can make.

Art A Layman said...


Reading a problem too?

Comparing Exxon's profit margin to Apple or Google or GM, for that matter, is apples to oranges unless you use the real revenue number.

There is not a business management team in the world, running a capital intensive industry, that can turn a doubling of sales into a quadrupling of profits in 8 years, unless they're piggybacking on increased prices with no offsetting increase in costs, and dealing in a market which is almost totally inelastic in pricing.

Actually the government has every right to do that; it's called taxes!