McCain's Energy Economics

I watched John McCain's acceptance speech last night on Fox News. In my opinion, it was a good speech. The portions dealing with his personal challenges involving combat and imprisonment were effective and poignant, as many pundits had demanded they should be.

One area, however, continues to puzzle me.

McCain gave nearly literal voice to Boone Pickens' energy non-plan and contentions on the danger of Ricardian trade flows involving imported oil. Fair enough. McCain highlighted the political and security risks of the now-well-circulated figure of $700B/year bill for America's oil imports.

However, what McCain declined to explain, as have Al Gore, Boone Pickens, and the Illinois freshman Senator, is the inflationary economic effect some of this in-sourcing of energy production will have on Americans.

First, McCain's generous promises for subsidies to renewable energy sources will merely continue an ongoing mistake. How long must we pretend solar and wind can be economically-viable options, while subsidizing the hell out of their provision?

Either they make economic sense, or they don't. If they don't, then for heaven sakes, John- and Al, Boone, and Barack- admit that you are going to stoke American energy-based inflation fires big time with these massive energy subsidies.

Second, McCain then uttered the by-now familiar, sacred Pickensian domestic energy sources of wind, solar, natural gas, offshore (but not ANWR) drilling, and 'clean coal.' Fine.

Why aren't they online already? Is it because of environmental and other regulatory roadblocks? Or are they uncompetitive with oil at current prices?

If it's the latter, John, why not give Americans your famous 'straight talk' about the inflation they will be feeling when you and the rest of the Federal government machinery crank up the production of expensive domestic energy sources?

I'm very uneasy with this headlong rush into domestic energy, without a clear, trustworthy analysis of just how much of a Ricardian price we will pay for choosing more expensive domestic energy over cheaper, if insecure and potentially destabilizing foreign energy sources.