by Cheryl Rofer
George Bush believes in tax cuts, the monetary kind, that is.
But he levied a number of taxes that I didn’t see clearly until the election. The relief of having a president in sight who ran his campaign highly competently, who speaks in in full sentences with English words and looks like he is thinking about what he is saying, who is managing his transition with immense political acumen, the relief of seeing that America can still produce politicians we can look up to, has cleared some of the fog that settled in my mind over the past eight years.
George Bush levied some exorbitant taxes on us, on our morale, on the way we think of ourselves as a nation. Poor morale removes productivity and creativity without giving anything back, so it is worse than a tax. Taxes can be used to add to the common good. There’s been plenty written about torture, preventive war, surveillance and detention of civilians, and Guantánamo, so that’s not what I want to concentrate on.
Another Bush tax occurred to me as I watched Charlie Rose interviewing a hedge fund manager and they talked about the failure of the rating services. Nothing new, but it came together with other things that have been bothering me.
I’ve complained about the lack of energy policy analysis (here and here, for example). What the rating agencies do (or were supposed to do) is analyze the financial positions of companies, municipalities and other organizations and the risks attached to the financial instruments they issue. Come to think of it, I realized, I’ve complained about the lack of a threat assessment to justify our nuclear arsenal, and that’s analysis, too.
George Bush taxed analysis almost out of existence. Although, just as Congress must pass tax bills to take in money, it required more than Bush to eliminate such a useful tool. But Bush was the leader. He proclaimed the sureness of his gut for making decisions. He promoted faith-based social programs out of his faith-based certainty. Dick Cheney aided and abetted with his one percent doctrine, which justified invading Iraq and providing flawed intelligence to Colin Powell, who seems to maintained a residual attachment to analysis as he pored over the CIA’s information before making his dutiful and not-nearly-analyzed-enough speech to the United Nations.
And so it came to pass that analysis seemed unnecessary, a waste of time. We don’t lack for facts. What we lack is a way of putting them into context. Partisans of various causes have always been happy to tout the facts that favor their point of view, so we hear from Vestas that wind power is number one in modern energy; from the coal lobby that 50% of our energy comes from coal, and more can come from clean coal; from Boone Pickens that American natural gas can become a major transportation fuel; and from the nuclear industry that split uranium atoms make no carbon dioxide.
But that is not analysis. Analysis gathers the relevant information and arranges it in various ways, eliminates the irrelevant, calculates bounds on likely situations, and figures out what more information is needed. Analysis tells us the likelihood of various outcomes, how to combine various ideas or technologies to form a system. It is the basis for any synthesis that will address real problems.
If we are to have a green revolution, if we are to end our dependence on petro-dictatorships, we must do some serious analysis. We must be able to figure out where the various forms of energy generation can do the most good for the best price. The market has proved inadequate to that task again and again. The fluctuations in the price of oil, from the seventies scarcity to today’s speculative frenzy, wreak havoc with alternative energy development and even the development of new sources of oil.
We need to see how wind, solar, biomass, nuclear fit together before we can make sound free-market decisions or conclude where the free market in energy needs to be regulated or, yes, taxed. We need the analysis to make the case to the voters and any thinking stockholders who may be still out there. Piecemeal legislation on regulations and tax policy and gut reactions have brought us to where we are.
Analysis apparently seemed unnecessary to the rating companies, whose business it allegedly was. We don’t know why or how this happened, and we can hope that some acute reporters are digging into these questions. But nobody was watching the store. Perhaps the prospect of giant profits fogged everyone’s mind. Or perhaps it was testosterone.
Indications are that Barack Obama is already developing a big tax cut in this area, in order to grow analytical capability. We can hope that the tax cut is shared across the population. The workings of his campaign and transition teams, and their ability to avoid uproar and drama, are encouraging. Their actions seem to be part of a larger strategy. We can’t be sure, but things are looking good for that tax cut.