CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Tuesday, July 01, 2008
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
Previous Posts
- We Can Lower Gas Prices Now: Drill, Drill, Drill
- Obama Wants Tiger-Size Tax Bite
- Ebay Updates
- Adjusted for Increases in Income & Fuel Efficiency...
- From 2 Hrs. to 30 Minutes: Moscow's Airport Train
- Facts About Non-Producing Leases
- Paul Krugman Has Two Words: Iron Ore
- WSJ: Some Remedial Education on Idle Leases
- Record High Gas Prices? We're Still Not Even Close
- What Can Onions Teach Us About Oil Prices?
17 Comments:
I don't understand why Democrats are up in arms about high gas prices.
They are the ones proposing carbon taxes and cap-and-trade legislation - both of which are designed to raise the price of energy in order to discourage [and thereby lower] consumption.
The market is simply doing for the Democrats what they have publicly expressed support for.
So what's all the fuss about?
I would think that Democrat politicians would be celebrating high gasoline prices.
Dr Perry,
I have a question. The economic argument against the McCain/Hillary gas tax holdiay proposal is that the supply of gasoline is very inelastic in the short run and therefore relatively fixed, so that the incedence of the tax relief would largely fall on producers and not provide any substancial relief at the pump (in the short run anyway). This seems to make sence to me, and this is the economic concensus amongst those in the profession. So if this is true (which i tend to believe it is), why is it the spreads in varrying state taxes seem to be largely carried over the the consumer at the pump? Is this just because gas that would be sold in a higher tax state is displaced to a lower tax state as producers try to remove the tax incedence that would land on them? If this is true, wouldnt a national tax holdiat then displace some gasoline from other countries to US markets via the same dynamic? What are your thoughts?
Thanks.
bob wright said...
I don't understand why Democrats are up in arms about high gas prices.
Bob, it is simple. Most Democrat and Republican politicians are mentally ill and so are their most fervent supporters. The underlying personality disorders and co-morbidities do vary from politician to politician however some behaviors are similar.
If the Democrats had raised taxes it would have been promoted as a green movement to save the earth for our grandchildren (you'll get by eating pie in the sky...) kind of thing. No apparent benefit now but the sacrifice we endure today will make it better for future Americans. The equally mentally ill (and most vocal) followers would have embraced the change and suffered quite happily for the "greater" and future "good."
In spite of the accuracy and humor of the post observing the mental illness associated with politics, I think the answer is more easy to discern. Politicians pander. Yep. They don't care about it all one way or another unless there is a vote or it's equivalent in power to be garnered.
"In spite of the accuracy and humor of the post observing the mental illness associated with politics, I think the answer is more easy to discern. Politicians pander"...
Good point paul...
Hmmm, I think this is an example of the mentally ill pandering to the mentally ill...:-)
juandos,
In the video clip you link to, Harry Reid says that we need to stop using fossil fuels because it puts carbon into the air and makes us sick.
I think he should lead by example.
A good first step would be for him to just stop talking. This would significantly reduce the amount of carbon being put into the air. I know his talking makes me sick.
"A good first step would be for him to just stop talking. This would significantly reduce the amount of carbon being put into the air. I know his talking makes me sick.'...
I like that suggestion too bob wright because Reid's blabbering makes me want to hurl...
There is one other potential alternative though when it comes to alternative energy, how about a couple of those windmills placed in both Houses of Congress so that something that might actually be useful comes out of Congress?...:-)
Juandos,
Unfortunately, the return on capital investment with wind power would not justify the use. Glad the sound on my computer is on the fritz. Listening to Harry Reid is one of life's more annoying experiences but it could be worse. He could be running for president.
Greg Mankiw has been running postings about the gas tax for over a year. Like Bob says pandering to the public with policies aimed at targetting evil corporations seems to sell with a largely economically challenged public. Windfall profits, oil speculators, cap & trade...all approaches which fail to deal with the problem but can garner a few votes.
If we actually look at the trying to reduce carbon dioxide, the task would require radical changes in every aspect of our lives. Whether it is doable, whether it is economically catastrophic, whether it would actually help remediate climate change are questions never raised much less discussed.
Considering the economic consequences of actually doing something, perhaps we are lucky that politicians are completely and totally ineffectual.
I think it was Will Rogers who said:
"Aren't you glad you don't get all the government you pay for?"
The following is from an article by Bret Stephens in today's WSJ:
"In May, German climate modelers reported in the journal Nature that global warming is due for a decade-long vacation. But be not not-afraid, added the modelers: The inexorable march to apocalypse resumes in 2020.
This last item is, of course, a forecast, not an empirical observation. But it raises a useful question: If even slight global cooling remains evidence of global warming, what isn't evidence of global warming? What we have here is a nonfalsifiable hypothesis, logically indistinguishable from claims for the existence of God. This doesn't mean God doesn't exist, or that global warming isn't happening. It does mean it isn't science.
So let's stop fussing about the interpretation of ice core samples from the South Pole and temperature readings in the troposphere. The real place where discussions of global warming belong is in the realm of belief, ..."
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I just want you to know I love you guys. Not you leftist jerks, but you other guys. You know who I mean. Thanks.
Just as an aside, FL has high taxes because it's perceived as a tax on the strong Tourist market here. They figure that the tourists buy a lot of the gas here, so it puts money into the coffers for a low payout.
FL, I'd note, is one of the few states remaining with no State Income Tax, and next to no chance of one being implemented, as there is actually an entry in the State Constitution forbidding it.
Anon 954:
You forget that "increased taxes" would have gone into the hands of the benificent Federal government to be handed out as largess.
Now the increase is going into the hands of the eeeeevil oil companies (in reality, yes, to the oil-producing nations such as Venezuela and Saudi Arabia, which the USA is determined never to join), instead. Hence, they are frothing at the mouth over the rise in prices.
It's supposed to promote social redistribution, and the fact that it does, but not To The Correct People is the problem.
> There is one other potential alternative though when it comes to alternative energy, how about a couple of those windmills placed in both Houses of Congress so that something that might actually be useful comes out of Congress?...:-)
Just think of the power generation possibilities of a couple of air turbines placed into the roof of the Capitol building, driven by all the bloviated hot air.
Perhaps we're onto a real solution for the energy crisis. A true perpetual energy engine.
As long as we've drifted pretty much OT --
As I've probably mentioned before, two good sources for opposing opinions about each day's GW news are:
GreenieWatch:
This site is in favour of things that ARE good for the environment. Most Greenie causes are, however, at best red-herrings and are more motivated by a hatred of people than anything else.
Still Waiting For Greenhouse:
A Lukewarm View of Global Warming
P.S. There is a picture displayed prominently on the Daly site. Go ahead and look at the article about it, and read the full background. The picture alone details one of the more obviously falsifiable proposals inherent to GW, a rise in sea level.
Note that both have been designated as, of course, "official shills" for the anti-enviro movement... LOL.
I decided to bookmark this blog today to increase the number of different views and sources of information available to me in order to figure out what's true and false in this vast United States. However, I will refrain from reading the comments. Not just because I'm a liberal and I don't particularly enjoy being stereotyped or reading suicide suggestions towards other human beings, politician or not. The level of discourse in this particular thread seemed to go downhill after the first couple of posts.
However, I like the blog posts so far.
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