One of the most infuriating policy debates revolves around the notion of energy independence. Democrats want it because oil is polluting our planet. Republicans want it because Middle Eastern oil is dangerous. President Obama mentioned it in his first Oval Office speech a few weeks back, giving a shout out to energy efficient windows. (What?) But as John Stewart shows us, Obama wasn’t the first to espouse energy independence and he won’t be the last. This clip, albeit a bit long, says it all.
Regardless, it’s a dumb idea writes The Independent Institute’s Robert Higgs:
Suppose a serious policy of “energy independence” were actually implemented, rather than being merely spewed out along with the rest of the political hot air. Would we be better off? Absolutely not. We would be vastly poorer because we would have to sacrifice a great deal more of the non-oil products we now produce and consume in order to acquire the petroleum products we demanded.
In a sense, every good or service we wish to consume raises the same question: make or buy? If we choose to make it ourselves, we must forgo the value of the goods we might have produced had we allocated our time, effort, and other resources in alternative ways—in the economist’s lingo, there’s an opportunity cost. If we choose to buy the desired good or service instead of making it ourselves, the value of the goods we could have enjoyed had we spent the money for them, rather than for the good actually purchased, represents the opportunity cost. So, whether we make or buy, there’s always an opportunity cost. Rational people answer the make-or-buy question by choosing the option with the lower opportunity cost.”
Energy independence may be a politically attractive thing to say, but only rarely does it lead to good policy. Energy independence is generally an excuse for more mandates, subsidies and regulations – three words libertarians love. I like Stewart’s policy better: F*ck it, let’s use oil.