Granted, Paul Krugman is a Hillary supporter, but it looks clear to me that Obama's campaign dishonestly used a quote in Krugman's op-ed as it relates to the federal gas tax. Michael Dobbs has an excerpt of the ad. To be fair, he says that both campaigns "have been stretching the facts" on this issue. I've come to expect fact-stretching from Hillary because it's been a common occurrence ever since Bill Clinton trotted out the lie in 1992 that we had the worst economy in fifty years. But Obama, on the other hand, promised a "new kind of politics", but I guess untruths are exempted from that pledge. Here's the ad:

Here's what Dobbs said:

The Obama ad quotes from a Paul Krugman column in the New York Times on April 28 to support the claim that Clinton's tax holiday will merely "boost the profits" of the oil company. The trouble is, Krugman was not attacking the Clinton plan in his column, he was critiquing a proposal by Republican candidate John McCain. While the two plans have a lot in common, they are different in one respect: Clinton has also called for a tax on the windfall profits of oil companies.

Krugman has criticized the Clinton plan on his blog. But the Princeton economist did not address the Clinton gas tax proposal in his newspaper column. The Obama camp is wrong to imply that he did.

Krugman's blog didn't say that Clinton's plan would boost oil industry profits. Rather, it would be "in one pocket, out the other" for oil companies, implying revenue(or profit) neutrality. Here's what Krugman said about the ad:

I did not say that the Clinton proposal would increase oil industry profits. If the ad implies that I did, it should be retracted.

The Clinton proposal is financed by an excess profits tax. At worst, it sends money in a circle. In practice, it would probably reduce oil industry profits at least slightly, since the rise in the pre-tax price of gasoline probably wouldn’t wipe out all of the tax cut.

I was very clear when I wrote about the Clinton proposal that while I didn’t think it was good policy, it was not the same as McCain’s, and relatively harmless. If the Obama people are suggesting otherwise, they’re being deliberately dishonest.

The Obama people do indeed suggest otherwise. It was a clever tactic by the Obama campaign, using a Hillary supporter's quotes to undermine Hillary. Too bad the quote was dishonestly applied. I've asked this before and I'll keep asking it: Why is Obama getting away with all these untruths?

For those of you keeping score at home on the untruths, there is this , then this , then this , then thisthis , then this , then this , and then this . Yow.

Factcheck.org has more on Obama's ad:

Barack Obama pushed back with an ad of his own, accusing Clinton of "political pandering" with "poll-driven gimmickry." The ad goes on to explain that Obama has a plan to tackle price gouging, tax windfall profits, invest in alternative energy and give a $1000 tax cut to "working families." But Obama's ad manages to squeeze in some misrepresentation and pandering of its own all while falsely implying that his plan is significantly different from Clinton’s.

The biggest distortion in Obama’s ad is his pledge to “give working families a permanent $1,000 tax cut to help with rising costs” of gas. It’s true that Obama is offering to offset payroll taxes on the first $8,100 of each family’s income. That credit could be worth as much as $1,000 per family. But Obama is wrong to imply that this cut is designed specifically to “help with rising costs” of energy. The proposal is part of a tax plan that Obama unveiled in September 2007. In fact, because Obama is proposing a tax credit, Americans wouldn’t see any money until they file their 2008 taxes – something that won’t happen until January 2009. Clinton is not proposing a similar broad-based tax cut, but she has called for a whole range of other middle-class tax cuts .

Obama also promises to "take on price gouging." The claim that oil companies are manipulating gas prices is popular on the campaign trail: Clinton has similarly called on the Federal Trade Commission (FTC) to investigate "market manipulation in wholesale oil prices" so that oil companies are not "ripping off consumers." But what Obama doesn't mention is that the FTC has conducted price-gouging investigations before, most notably in the wake of Hurricane Katrina. The FTC found "no instances of illegal market manipulation" and concluded that the price increases "were approximately what would be predicted by the standard supply-and-demand model of a market performing competitively."

That's not to say that market manipulation (or price-gouging) is impossible. And the FTC, as well as state attorneys general, may well be conducting further probes even as we write this (they're generally supposed to be confidential until they're completed). But most economists say that gasoline prices have more to do with market forces than with oil company shenanigans.

Obama's plans to tax on oil company windfall profits and invest $150 billion in alternative energy research are as advertised. What he doesn't mention is that Clinton's energy plan calls for spending an identical $150 billion in alternative energy research. One-third of the money would go into a $50 billion "Strategic Energy Fund," which would be funded by a "windfall profits fee" on oil companies. We've said before that there is very little in the way of substantive policy daylight between Clinton and Obama. The Washington Post found that the two senators voted the same way 93.8 percent of the time, and interest groups across the political spectrum awarded them similar scores.

In a nutshell, Clinton and Obama are offering nearly identical energy plans. Both imply that price gouging is partially responsible for rising prices without providing adequate proof that price gouging is actually occurring and both want oil companies to help fund research into alternative energy. And neither candidate has a short-term plan that will, in fact, help families cope with rising gas costs.