Friday, April 24, 2009

We just keep on getting what "we" voted for.

Yesterday Energy Secretary Steven Chu testified before the House Committee on Energy Commerce. When pressed by Rep. Cliff Stearns (R-FL) on statements Chu made last year about the desirability of high gas prices, Chu admitted his ideas were “silly”.

Transcript from the House Energy and Commerce Committee:

REP. CLIFF STEARNS, R-Fla.: Last September you made a statement that somehow we have to figure out how to boost the price of gasoline to the levels in Europe, which at the time exceeded $8 a gallon. As Secretary of Energy, will you speak for or against any measures that would raise the price of gasoline?

SEC. CHU: As Secretary of Energy, I think especially now in today’s economic climate it would be completely unwise to want to increase the price of gasoline. And so we are looking forward to reducing the price of transportation in the American family. And this is done by encouraging fuel-efficient cars; this is done by developing alternative forms of fuel like biofuels that can lead to a separate source, an independent source of transportation fuel.

REP. STEARNS: But you can’t honestly believe that you want the American people to pay for gasoline at the prices, the level in Europe?

SEC. CHU: No, we don’t.

REP. STEARNS: No. But somehow, your statement, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,” doesn’t that sound a little bit silly in retrospect for you to say that?


Embarrassing, I'd say.


Mike West said...

What an idiot!

vwatt said...

No doubt about it, Chu is a little short on common sense but hopefully his academic smarts will enable him to get an energy poicy going. The exerpt posted below should be of interest to those with curent or future college expenses. Thanks to Obama , college is going to get a little less expensive-the money will go to the kids instead of the banks who will invest the money in derivatives and then "let" us bail them out. Sometimes I wonder why Nelson doesn't switch parties- a Democrat from Nebraska is basically the same as a moderate Republican from Texas(if you can find one):

It might not be the most glamorous bill, but it's the one that Sen. Ben Nelson (D-Neb.) has vowed to die on. President Obama, however, isn't going to give him that chance.

Nelson is perhaps the Senate's fiercest protector of subsidies for student lending institutions, which, not coincidentally, are an engine of job growth in Nebraska. He has vowed to block any effort to reduce those subsidies. And given that Democrats have 58 members and generally need 60 to break a GOP filibuster, he can enforce his will on his colleagues.

An agreement struck between the president and House and Senate negotiators won't give Nelson that chance. A process known as "reconciliation" allows budgetary measures to be moved through the Senate with a simple majority, rather than 60. Multiple congressional sources say that congressional Democrats have decided to use reconciliation to go after student-lending subsidies, specifically to get around Nelson.

The Nebraska Democrat has become the bane of liberal bloggers and other progressive activists for his insistence on pushing legislation in a more conservative direction. Nelson's critics will no doubt relish the decision to make his threat of a 'no' vote meaningless.

Nelson spokesman Jake Thompson said that Nelson was not the only target of the reconciliation move and that other members of Congress represented constituents who would also be on the losing end of the reform. He noted that NelNet, the Nebraska student lending institution, employs 1,000 people and those jobs would all be at risk of being shipped to Washington, DC.

"He remains opposed. Whatever strategy he might pursue to exercise that opposition, we're not at that point yet," he said. "Maybe we can work something out."

UPDATE: An important comment from a reader e-mail:

"I think the public needs to know exactly what the current student loan program does and why it is such a giveaway to the banks. I think people don´t know, probably because most of the news coverage is about whether or not a bill will pass rather than what it means.

Simply, the current system forces all student loans to be made through banks. The banks charge a medium range of interest--not terribly high, but not terribly low, either. The government GUARANTEES the loans so there is absolutely no risk for the banks.

During Clinton´s term, the student loan plan allowed universities to offer much lower loans by borrowing directly from the government. Students did not have to go through a bank and this shaved 2 or 3 percentage points off the cost of the loan. Neither did it cost the government anything since the money was repaid. But when the Bushies came in, they forced all loans to go through banks, jacking up the interest rates and guaranteeing a profit with no risk for the banks. The government still backed all the loans."

It is a classic example of how lobbying creates direct subsidies for businesses who win their lobbying efforts.