Barack Obama is enjoying a resurgence in popularity since the assassination of Osama bin Laden. Yet this was happenstance. Could Obama’s legacy rest on him raising petrol taxes to reduce the America deficit? Asks Luke Cahill.
When Barack Obama was elected to the presidency, many compared him unfavourably to Jimmy Carter. There are some similarities to Carter’s four years in office. Like Obama, Carter’s election was as a result of a violent swing against the Republicans, after President Nixon’s actions and then President Ford for controversially pardoning his predecessor. Carter refused to appoint a Chief of Staff for his first two years, which crippled his early agenda, and meant he was always playing catch up. President Obama did not make some of the basic mistake that President Carter did. A better comparison is George H.W. Bush.
The first Bush president famously, by his own admission, never did “the vision thing”. For all of President Obama’s uplifting speeches, he is as pragmatic as George Bush Senior was; he allowed George Bush Junior’s tax cuts for the wealthiest Americans to remain on the statue book. President Bush received huge public support and approval ratings after the first Gulf War having driven Iraq out of Kuwait in 1991, just before the 1992 election. President Obama has had a comparable moment with the death of Osama bin Laden. Obama’s job approval numbers jumped to 52% after his death was announced on 1st May. Now, however, the gains he made have disappeared with his approval ratings currently at 41%.
George Bush Senior went on to lose the ‘92 election to Bill Clinton. Clinton captured the public mood with his famous phrase “It’s the economy stupid!”. Bush, who was elected after eight years of Ronald Reagan, was always a foreign policy president and had little interest in domestic issues. When the election came and the economy was the subject everyone was talked about, Bush and was outclassed and out charmed by Clinton. It is better to compare Obama to George Bush Senior, as the markets continue their free fall; it is becoming possible to see that Obama could be a one term president due to a poorly performing economy. If growth does not pick up and the unemployment numbers fall, the same fate that happened to 41 could befall 44.
So, if the economy does not improve and Obama is a one term president what can his historic legacy be? Many would point to the fact that America elected its first black man to head the executive branch. Others say that he presided over the death of bin Laden. Both of these however are down to timing. Obama shrewdly chose to run for president at the right time, and happened to be in office when bin Laden was killed. Michael Mandelbaum in his book The Frugal Superpower argues that the United States cannot afford to run the world to the level that it currently is. He rightly says that the US is under taxed in many areas, but points to one specific example that has reverberations far beyond the coffers of the US Treasury.
Might Obama, with nothing to lose be brave enough, to push for an increase in the federal tax on petrol? As it currently stands, the US motor gasoline consumption stands at roughly nine million bpd (barrels per day). The federal tax of a US gallon of regular grade petrol is 18c, with the retail price of a gallon at about $2.80. If this tax were raised it would have several important consequences.
Firstly, if petrol taxes were doubled it would, in a year raise, $177 billion. This would, with other measures, help reduce the deficit and help fund alternative energy research. The United States, with the best universities, laboratories and scientists in the world has the greatest possible chance of achieving this, more than any other nation. Secondly, raising taxes would have the immediate effect of making people think twice about using their cars in major cities. This would, in turn, force the planning and construction of adequate public transport systems in major cities that would be in enough demand to make them viable. Thirdly, the reduced demand would mean less money would go to those OPEC member countries whose interests clash with that of the United States, such as Saudi Arabia and Venezuela.
If these taxes could be raised as has been suggested, it could secure Obama’s legacy for the future and put the United States back on the path to fiscal rectitude. At the same time it would mean less US money would go to those nations that threaten world security. This would, in turn, help the United States save further by denying these regimes funds from the American purchase of their oil.
One thing stands in the way of Obama securing his legacy and making the world a safer place, the US Congress.