Herald Journal Columns
May 15, 2006, Herald Journal

Klobuchar doesn’t ‘get’ business


Amy Klobuchar, the presumptive DFL nominee for US Senate, has a plan to lower gas prices.

Her plan shows a lack of knowledge, though, on how businesses work.

The first plank in her plan to lower gas prices requires oil companies to provide 20 percent renewable fuels, according to an e-mail Klobuchar sent May 3 to Andy Aplikowski of the blog, Kennedy vs The Machine.

When the government requires a business to add to or change a product, it costs the business more, not less, to produce it. If it costs more to produce it, the business will charge the customer more for the product. As a result, it will raise the cost of gasoline at the pump, not lower it.

The second plank of Klobuchar’s plan is to improve fuel economy standards in vehicles. This would only work now if all consumers bought new cars immediately and those new cars already had been engineered with improvements in fuel economy. Otherwise, this would take decades to lower gas prices.

Her third plank has the government giving consumers a tax incentive to buy hybrid vehicles. This also requires all consumers to immediately buy new cars to get the incentive. There aren’t enough hybrid vehicles already manufactured, even if all consumers immediately had the money to buy them, for this to work. What planet does Klobuchar live on?

The fourth plank of Klobuchar’s plan is for the government to lead by example by replacing the federal fleet of cars through attrition. The fuel that federal cars use, however, is a drop in the ocean of fuel used in the United States. This will have no effect on gasoline prices now. It will be years before the public is aware government has replaced its fleet and that consumers should follow its example.

The fifth plank is a gas gouging penalty. Do you think the government will give consumers any of the money they take from oil companies in penalties? Get real, Amy.

Also, the oil companies will pass the cost of penalties on to consumers, the same way they do other business expenses. That’s not going to make the price of gasoline go down either.

The sixth plank is requiring oil companies research renewable energy sources. The cost of research also will be passed on to consumers. It won’t lower gasoline prices an iota now.

Klobuchar is the Hennepin County attorney, not a business person, so she probably doesn’t understand profit and loss, market forces and costs of production. We already have plenty of lawyers in Congress. Instead, let’s get someone who knows how businesses work.

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