The List: Obama’s 10 Worst Ideas

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Taxing Oil Companies Extra

What he said: “I’ll make oil companies like Exxon pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs and other bills.” —Speech in Raleigh, N.C., June 9, 2008

Why it’s a bad idea: He’s attacking the symptom, not the disease. It’s certainly hard to defend oil companies making record profits while consumers are struggling to fill their tanks, but Big Oil has very little control over day-to-day gas prices, which are set by global supply and demand and, of course, OPEC. By discouraging oil companies from making big profits, such a tax could potentially discourage them from making investments in new refineries and finding new oil sources, resulting in fewer jobs and even higher prices at the pump. Jimmy Carter tried this in 1980, and it only increased U.S. dependence on foreign oil. Singling out one particular industry for punishment because it is politically unpopular doesn’t make much economic sense, either.

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Opening the Strategic Petroleum Reserve

What he said: “We should sell 70 million barrels of oil from our Strategic Petroleum Reserve for less-expensive crude, which in the past has lowered gas prices within two weeks.” —Speech in Lansing, Mich., Aug. 4, 2008

Why it’s a bad idea: Obama was right in July when he said that the strategic oil reserve “has to be reserved for a genuine emergency.” Selling oil from the 700 million barrel reserve would increase domestic supply and could drive down prices in the short term, but encouraging consumers to use more oil isn’t going to fix anything. And depleting the reserve would leave the United States vulnerable to a supply disruption caused by a natural disaster or further unrest in the Middle East. Obama swapped common sense for this dangerous boondoggle in August after McCain started to hammer him on offshore drilling. So much for tough truths.