Maslow is credited with the idea that when all one has is a hammer all problems look like a nail. This quote has come to mind often recently. I have been working hard to expand my toolbox to include more than just a hammer. It is disappointing that all around hammer and nail thinking continues to be so insidious.
A couple examples to this truism have been evident recently. The first is the fixation with tax cuts. They are the cure to all that ails society. Just cut more taxes and the forthcoming growth will cause budgets to fix themselves. The narrative of tax cuts being magic elixir for all of society’s woes has become so pervasive that most people believe that taxes are currently too high. The reality is that tax rates are the lowest they have been in many decades. The total wealth of the top 400 families in the US exceeds that to the bottom 50% combined. Politico’s have the nerve to suggest that higher taxes would be a hardship to the top earners while their marginal rates slip to all time lows.
Our dependence on fossil fuels, namely oil, is another hammer. The solution to increasing prices is to drill more or dump oil from the strategic reserve. This seems a simple solution on the surface, but it is short-sighted and does not consider just how little control any single country has on the price of a global commodity like oil. The simplistic view that oil production in the US can significantly impact oil markets is quaint. We long ago passed the point where production in the US is more than a blip to the total world supply. Political turmoil in oil producing regions, real or imagined, has far more impact on pricing. In addition, the growing world population and increased living standards in places like China and India have the greatest impact on world oil prices.
It is time to put those hammers back in the toolbox and try different tools. There is plenty of money to fund the workings of government and society. The vast majority of American’s have not enjoyed any growth in income. The upper income levels have enjoyed income growth and decreased taxation. The imbalance needs to be remedied and government properly funded.
We are going to be using fossil fuels for many years. That however, does not excuse us from the need to explore new ways to generate energy for use in transportation and powering our homes and businesses. Doing what we have always done, drill for oil, will not help create a better future. It keeps us tethered to a carbon powered world that does not have a bright future.
What new tools to you have? Are you ready to call the hammer users on the carpet for excessive hammering?