Barack Obama and the Oil Tax Increase: Never Let Prosperity Go to Waste

As you probably know, Barack Obama has responded to an unexpected (and, to him, unwelcome) relief to American consumers by proposing an oil tax increase. This is a learning opportunity for us, because it teaches us how politicians and other government workers think about prosperity.

Ever since Rahm Emanuel said it, tea party conservatives have known that proponents of big government “never let a crisis go to waste.” This isn’t a new realization and it isn’t an American or modern problem. The poet, John Donne (1572-1631), wrote about how the government always expands in emergencies and never contracts when the emergency is over. In his poem, “Love’s Growth,” he decided that the well-known phenomenon of perpetually growing government was useful for describing how his love would always grow.

“And though each spring do add to love new heat,
As princes do in times of action get
New taxes, and remit them not in peace,
No winter shall abate this spring’s increase.”

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“Times of action” refers to war emergencies. Emergencies give states (“princes”) an excuse to raise taxes and they never lower them again. John Donne expected his general reader to be familiar with this behavior. He didn’t consider it controversial. This has been going on for a long time—the government continually empowers itself through emergencies.

But Barack Obama’s proposal for an oil tax increase shows us that the government continually empowers itself by our times of increasingly brief prosperity. He thinks we won’t notice, or vigorously oppose, the oil tax increase of $10 a barrel, even though it could mean 22 cents extra a gallon at the gas station.

Back when the price of gas was so high, liberals were advocating energy taxes to support corrupt boondoggles like Solyndra “green energy.” And don’t take for granted that Republicans are our protectors from an oil tax increase. They may refuse Barack Obama’s tax on barrels of oil, but they have already proposed raising the federal gas tax. They now have cover to claim they are protecting us from the President’s oil tax increase and “merely” raising the federal gas tax a few cents for the sake of highways.

We have low gas prices because the free market rescued us from the power of politicians. By wars and regulations, the government kept gas prices high for the benefit of the powerful and regimes like Saudi Arabia. But those higher prices kicked development and entrepreneurial innovation into high gear. Free people doing their best to create and produce have caused a real blessing to reach the average American household. The collapse of gasoline prices is an economic boom.

And politicians see a new opportunity to rip us off. As they view it, they are making the best of a bad situation. When prosperity manages to burst through the bars to their cage for us they never let that prosperity go to waste.

So this is the lesson. The government uses emergencies to justify the expansion of its powers, and government use the wealth of the people to justify the expansion of its powers. It’s like the reported (mythical?) coin tosses decided between Hillary Clinton and Bernie Sanders. Heads, the government wins; tails, the people lose.

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