Public Policy: Energy in the Executive.(Brief Article)

Would that every nation were blessed with such an "energy crisis." Yes, California has a serious problem that, given a combination of circumstances, could also affect other parts of the country. But consider the big picture. Electricity rates nationwide have, according to the Mirant National Power Index, dropped from last year. New power plants are being built at a rapid clip. On the futures market, the price of gasoline is actually declining. Perversely, it may still make political sense for the Bush White House to talk up this supposed "crisis," because once everyone realizes that it doesn't exist, the administration can declare it solved-thanks, of course, to its comprehensive energy plan!

The hyperbolic attacks on the Bush plan by environmentalists (as an attempt to poison the air and kill the caribou) shouldn't trick conservatives into an exaggerated sense of its merit. The basic thrust of the administration's thinking on energy is sound: A growing economy requires more energy, which in turn entails more production. But the Bush plan itself is a political document, meant to placate corporate interests, environmentalists, and everyone in between, and so is festooned with an embarrassment of subsidies and incentives that will, at best, prove an irrelevance.

As Jerry Taylor writes elsewhere in this issue, the phantom energy crisis is already healing itself. Power plants are being built at a rate that outpaces Dick Cheney's benchmark of one plant a week. Altogether, almost 100,000 new daily megawatts of electricity capacity are scheduled to be available nationwide by next year. This is twice the amount of electricity that California now uses on an average day. While Cheney has been sitting with his advisers around a White House conference table, investors and entrepreneurs have been digging, building, and refining his energy problem into oblivion. By the time all the Bush plan's tax credits have kicked in, there may well be an energy glut. All of this is thanks to the most efficient energy plan known to man: market pricing.

This points to the negative, but nonetheless significant, advantage of the Bush ...