Economists Slam Clinton-McCain gas tax holiday plan

There are plenty of examples of pandering with handouts to be sure, but one doesn't need, necessarily, to be populist to pander either. The highly successful propaganda campaign to repeal the inheritance tax as some kind of ghoulish "death tax" on middle income Americans was a classic example of pandering.... and lying.

I'm against the estate tax because I think we shouldn't tax someone every year of their life and then tax them when they die. I understand why it's there, to stop the establishment of an aristocracy, it's just a philosophical difference.

When it comes to populism now, I think of todays politicians like John Edwards and GW Bush, which is very much pandering.

Ulairi wrote:
There are plenty of examples of pandering with handouts to be sure, but one doesn't need, necessarily, to be populist to pander either. The highly successful propaganda campaign to repeal the inheritance tax as some kind of ghoulish "death tax" on middle income Americans was a classic example of pandering.... and lying.

I'm against the estate tax because I think we shouldn't tax someone every year of their life and then tax them when they die. I understand why it's there, to stop the establishment of an aristocracy, it's just a philosophical difference.

When it comes to populism now, I think of todays politicians like John Edwards and GW Bush, which is very much pandering.

I don't want this to turn into a discussion on the Estate Tax and will gladly take that discussion to a different thread if you like. That said, you have to admit that the whacked out misinformation campaign in which suburban lunchbuckets were told to fear the taxman leaving their infant children pennyless was the height of pandering, scaremongering, and straight up lying.

I still say that there is an enormous difference between populism and demagoguery. I think it is possible, for instance, to have a sober discussion about fixing our Indian trainwreck of a health care "system" which addresses the need to provide basic public health. That would be populist.

In many ways, I think that the political pendulum has swung too far to the "what's good for business" side in the United States. "Market fundamentalism" combined with "business friendly" legislation has created a naitonal mindset which is hostile to even discussing how we would like to see the nation -- preferring instead to let moneyed interests dictate it for us based on what alternatives profit them.

Don't get me wrong. I am certainly no socialist and enjoy my six-figure income as much as any other guy would. I appreciate economic dynamism and marvel at the entrepreneurial spirit of East Asia. Capitalism is an incredible engine. I just don't think the engine should be determining where the car ought to go.

What pray tell, does an "Indian Trainwreck" mean exactly?

Nosferatu wrote:

What pray tell, does an "Indian Trainwreck" mean exactly?

Ever seen a trainwreck in India?

Paleocon wrote:
Nosferatu wrote:

What pray tell, does an "Indian Trainwreck" mean exactly?

Ever seen a trainwreck in India?

You don't even need to see the train wreck just how many people are on the train and the chaos it will cause if it derails.

http://www.youtube.com/watch?v=S4ZW0...

jowner wrote:
Paleocon wrote:
Nosferatu wrote:

What pray tell, does an "Indian Trainwreck" mean exactly?

Ever seen a trainwreck in India?

You don't even need to see the train wreck just how many people are on the train and the chaos it will cause if it derails.

http://www.youtube.com/watch?v=S4ZW0...

Thanks for the video.

Perhaps my analogy was too esoteric. How's this one: I've seen monkey sh1t fights better run than our health care "system".

I still say that there is an enormous difference between populism and demagoguery. I think it is possible, for instance, to have a sober discussion about fixing our Indian trainwreck of a health care "system" which addresses the need to provide basic public health. That would be populist.

That may be, but today, populism in practice is all about demagoguery. It isn't about driving costs down with basic public health, but about stopping big drug companies and the big insurance companies (notice, it's always a big company?), or instead of a real energy policy it's about stopping big oil.

Ulairi wrote:
I still say that there is an enormous difference between populism and demagoguery. I think it is possible, for instance, to have a sober discussion about fixing our Indian trainwreck of a health care "system" which addresses the need to provide basic public health. That would be populist.

That may be, but today, populism in practice is all about demagoguery. It isn't about driving costs down with basic public health, but about stopping big drug companies and the big insurance companies (notice, it's always a big company?), or instead of a real energy policy it's about stopping big oil.

But perhaps you will agree then that the reason why those arguments are so compelling is that Bush and the rubber stamp GOP congress really did give the government away to the big companies. Cheney's opaque energy task force (remember his need for "unvarnished advice" from folks who wanted only to bilk the average American) and similarly secretive star chambers of industry-only policymakers really did give demagogues real life bogeymen to point to. Perhaps there is a significant number of Squealers out there, but the fact of the matter is that Jones does currently run the farm.

Ulairi wrote:

That may be, but today, populism in practice is all about demagoguery.

I think you're looking at the extreme end of the Clinton base there for the worst of the populist rhetoric and internalizing the republican tactic of questioning any proposed tax, regulation, or program relating to business as "class warfare" or "wanting to destroy the economy."

There are numerous policy wonks out there who would be happy to sit down and discuss why changing the healthcare system or energy policy in certain ways would result in net social benefits, but they are little heard in the popular media. The republicans are far better demagogues using the press at this point than the democratic wonks.

Nosferatu wrote:

Isn't it a tad disingenuous to argue simultaneously that the removal of the gas tax will both not save drivers any money and cripple the infrastructure funding?

Yeah, the math doesn't quite work on that one, does it? :/

LobsterMobster wrote:
Nosferatu wrote:

Isn't it a tad disingenuous to argue simultaneously that the removal of the gas tax will both not save drivers any money and cripple the infrastructure funding?

Yeah, the math doesn't quite work on that one, does it? :/

How likely are gas station owners to reduce their prices because of the lowering of the tax if a) the demand for the good is inelastic and b) none of their neighboring competing gas stations lower their prices either?

Maybe I'm a pessimist, but the realist in me sees gas station owners winning big and everyone else losing.

Funkenpants wrote:
OG_slinger wrote:

Fuel usage, no difference. CO2 emissions, big difference.

What's the difference in C02 emissions on a per mile basis?

Burning a gallon a gasoline releases 19.4 pounds of CO2 into the atmosphere. The SUV will release 1.62 pounds of CO2 per mile, double the sedan's 0.81 pounds.

Over a typical year of driving (12,000 to 15,000 miles), the SUV will crank out 19,400 to 24,250 pounds of CO2, while the sedan will produce 9,700 to 12,125 pounds of CO2.

Gorilla.800.lbs wrote:

The proposition sounds even more puzzling, considering that other periods of heavy travel (say, Christmas or Thanksgiving) aren't getting any love like that. What's more, if the alternative modes of transportation are considered -- specifically, air travel -- the prices are easily doubling for the summer period, actually, but there doesn't seem to be any legislative momentum to suspend the collection of federal taxes on air travel during the summer period...

Well, the cynic in me has to point out that the election will be over by Thanksgiving...

Driving to your summer vacation spot is an American tradition. Nothing like loading a ton of crap in the car, strapping down a bunch of screaming kids, and driving 15 hours to Orlando. Flying doesn't get the same treatment because if you can afford to shell out two grand in airfare for your family to get to your vacation spot, an extra buck or two at the pump isn't going to phase you. Focusing on driving vacations lets the politicians show that they care about the bitter people.

Paleocon wrote:
Ulairi wrote:
I still say that there is an enormous difference between populism and demagoguery. I think it is possible, for instance, to have a sober discussion about fixing our Indian trainwreck of a health care "system" which addresses the need to provide basic public health. That would be populist.

That may be, but today, populism in practice is all about demagoguery. It isn't about driving costs down with basic public health, but about stopping big drug companies and the big insurance companies (notice, it's always a big company?), or instead of a real energy policy it's about stopping big oil.

But perhaps you will agree then that the reason why those arguments are so compelling is that Bush and the rubber stamp GOP congress really did give the government away to the big companies. Cheney's opaque energy task force (remember his need for "unvarnished advice" from folks who wanted only to bilk the average American) and similarly secretive star chambers of industry-only policymakers really did give demagogues real life bogeymen to point to. Perhaps there is a significant number of Squealers out there, but the fact of the matter is that Jones does currently run the farm.

Those arguments were sprouted before Bush and will be used after Bush. Populism today is "He has more than you, he is the elite, I'm going to take from him and give it to you!" A large portion of people believe that there is a limited pie and if I have more than they do, I have somehow taken from them. I also think populism gets into "paying my fair share" which is insulting because I think the rich do pay their fair share. The top bracket is 33% now, and if Obama and Clinton are elected it will go up to 39% or 47% depending if they remove the cap on FICA/SS. That is just on the federal level, couple in state taxes and fees, and people will be paying 60%+ of their salary.

LobsterMobster wrote:
Nosferatu wrote:

Isn't it a tad disingenuous to argue simultaneously that the removal of the gas tax will both not save drivers any money and cripple the infrastructure funding?

Yeah, the math doesn't quite work on that one, does it? :/

You take $x away from the government's infrastructure fund to support this lower gas tax. This should theoretically allow the gas companies to lower the prices at the pump. If they keep the prices at the pump static (or increase them at the same rate they normally would), they keep all the profit from the lower tax. The government basically gives $x to the oil companies.

kaostheory wrote:
LobsterMobster wrote:
Nosferatu wrote:

Isn't it a tad disingenuous to argue simultaneously that the removal of the gas tax will both not save drivers any money and cripple the infrastructure funding?

Yeah, the math doesn't quite work on that one, does it? :/

You take $x away from the government's infrastructure fund to support this lower gas tax. This should theoretically allow the gas companies to lower the prices at the pump. If they keep the prices at the pump static (or increase them at the same rate they normally would), they keep all the profit from the lower tax. The government basically gives $x to the oil companies.

Well, it's not the government giving the money to the oil companies. That isn't how the market works. If we decrease the price while maintaing limited supply, prices will rice as consumers consume more gas. Therefore, the oil companies will make more money. They aren't doing anything evil and we are to blame for our consumption, not the oil companies.

OG_slinger wrote:

Burning a gallon a gasoline releases 19.4 pounds of CO2 into the atmosphere.

So a person who burns 750 gallons of gas is going to release the same amount of CO2 whether he does it in a truck or car. The guy driving his 12 mpg truck 5,000 miles a year is going to put out less CO2 than the person who drives a 24 mpg car 15,000 miles a year. Why should the truck driver be told he shouldn't have a truck when the car driver is the bigger polluter in any given year?

This isn't an academic argument, either. My wife has a 40 mile commute round trip to work in the city and drives a 24 mpg car/suv, while a co-worker lives in the city and drives his giant truck a few miles a day. How am I going to explain to him that he's wrong to own a truck while my wife is burning up far more gas going back and forth to work?

So a person who burns 750 gallons of gas is going to release the same amount of CO2 whether he does it in a truck or car. The guy driving his 12 mpg truck 5,000 miles a year is going to put out less CO2 than the person who drives a 24 mpg car 15,000 miles a year. Why should the truck driver be told he shouldn't have a truck when the car driver is the bigger polluter in any given year?

This isn't an academic argument, either. My wife has a 40 mile commute round trip to work in the city and drives a 24 mpg car/suv, while a co-worker lives in the city and drives his giant truck a few miles a day. How am I going to explain to him that he's wrong to own a truck while my wife is burning up far more gas going back and forth to work?

Short answer:

We are looking for a witch to burn.
I don't want to be that witch, so I need to find a scapegoat that has characteristics dissimilar to my own. (ie. big SUV)
Now I can project all my guilt over the current situation on someone else, and blast them for their "McMansions" and/or "rolling meteors".

...that's my take at least. =)

Ulairi wrote:
kaostheory wrote:
LobsterMobster wrote:
Nosferatu wrote:

Isn't it a tad disingenuous to argue simultaneously that the removal of the gas tax will both not save drivers any money and cripple the infrastructure funding?

Yeah, the math doesn't quite work on that one, does it? :/

You take $x away from the government's infrastructure fund to support this lower gas tax. This should theoretically allow the gas companies to lower the prices at the pump. If they keep the prices at the pump static (or increase them at the same rate they normally would), they keep all the profit from the lower tax. The government basically gives $x to the oil companies.

Well, it's not the government giving the money to the oil companies. That isn't how the market works. If we decrease the price while maintaing limited supply, prices will rice as consumers consume more gas. Therefore, the oil companies will make more money. They aren't doing anything evil and we are to blame for our consumption, not the oil companies.

That's true. I was trying to give a simplistic answer.

If you reduce the cost to the oil companies to allow them to lower the prices, that does not mean that they actually will lower the prices. If they are good business people (not good people, but people good at business) they won't lower their prices. Generally, prices are set at the level people are willing to pay. Just because you lower the cost to the oil companies for their product that does not mean that people are willing to pay any less for gas. They still have their cars (both big and small) and they still have/want to use them to get from place to place. They will continue to pay whatever price you decide to charge them.

It's just good business sense.

Edit: I'm not trying to say the oil companies are doing anything bad. They are being good Capitalists. It's just inaccurate to say that lowering the tax will result in lower prices at the pump. That's just not what is realistically what's going to happen.

We will pay the same price we would have (or damn near), the oil companies will increase their profit margin, and the government will have less money to work on infrastructure.

This is a Lose-Lose solution for the two parties involved, The American People (minus those who may work in upper management at the oil companies) and The United States Government (minus those who may work in upper management at the oil companies)

Mixolyde wrote:

Maybe I'm a pessimist, but the realist in me sees gas station owners winning big and everyone else losing.

I think that's what they call price gouging, which is illegal.

The oil companies will charge whatever prices the market is willing to support.

Funkenpants wrote:
OG_slinger wrote:

Burning a gallon a gasoline releases 19.4 pounds of CO2 into the atmosphere.

So a person who burns 750 gallons of gas is going to release the same amount of CO2 whether he does it in a truck or car. The guy driving his 12 mpg truck 5,000 miles a year is going to put out less CO2 than the person who drives a 24 mpg car 15,000 miles a year. Why should the truck driver be told he shouldn't have a truck when the car driver is the bigger polluter in any given year?

This isn't an academic argument, either. My wife has a 40 mile commute round trip to work in the city and drives a 24 mpg car/suv, while a co-worker lives in the city and drives his giant truck a few miles a day. How am I going to explain to him that he's wrong to own a truck while my wife is burning up far more gas going back and forth to work?

Yes, but the CO2 per mile (your original question) is double for the 12 mpg vehicle.

Driving 5,000 miles a year in his big truck, your friend will put out 9,050 pounds of CO2. Driving 9,600 miles a year in her car/SUV, your wife will put out 7,776 pounds of CO2.

So your buddy is destroying more of the environment and your wife is doing more to prop up Middle East dictators and fund terrorism.

OG_slinger wrote:

Driving to your summer vacation spot is an American tradition. Nothing like loading a ton of crap in the car, strapping down a bunch of screaming kids, and driving 15 hours to Orlando.

Yes, I understand that, and it's precisely my point -- does the magniture of this family vacation ordeal indeed require some form of assistance from government?!

OG_slinger wrote:

Yes, but the CO2 per mile (your original question) is double for the 12 mpg vehicle.

My original point was that CO2 per year emitted by people using the same number of gallons of fuel is the same. I got kinda confused on the emissions per mile thing.

In your calculation, you're mixing my wife's annual total for a 5-day commute versus his full year of driving including weekends and vacations. If we just included his workday commute, it's only 15-20 miles a week, or about 730-1000 miles annually.

LobsterMobster wrote:
Mixolyde wrote:

Maybe I'm a pessimist, but the realist in me sees gas station owners winning big and everyone else losing.

I think that's what they call price gouging, which is illegal.

I'm sorry, but I don't understand what price gouging means in this context. If I'm offering a good to you at a price you're willing to pay, how could that unfair? Just about the only time I can see bringing a moral element into it is in the case of something like an unforeseen disaster causing shortages of essential goods. And it seems hard to argue that that's the case here, since oil prices have been rising for years.

In a good or service which is essential to consumers - food, gasoline, medicine, housing, etc. - if the price rises due to external supply issues, that's the market working. But if the price rises enough that it reaches record highs *and* results in record profits at the same time, for an extended period, that's as much due to the supplier taking advantage as to any external causes. The reason is that there is a responsibility to society to make essential goods reasonably available to all, and that requires that the instinct to price at what the market will bear be tempered. And we are not seeing that happen with oil-based products right now.

Granted, there's a huge problem with subsidies to gasoline producers in the US, which has shielded us from the rising cost of oil for decades. That was stupid, and we need to get over it. But as much as I'd like to tell people who bought into the whole Cheney energy policy (conspicuous consumption is a god-given right of Americans) that they are just out of luck, the fact is that the combination of inefficient vehicles and high gasoline prices is something that will damage us unless we take steps to give people time to make the change to more efficient vehicles. And that will require self-control on the part of the oil companies and the auto manufacturers.

My conclusion? We're screwed in this arena.

construction-gas-tax.jpg

The American Road & Transportation Builders Association has prepared a study of the impact on each state if the gas tax is cut for the summer. They predict that it will blow a $9 Billion hole in the transportation budget. Executive Director George Dondero says "It would deplete an already oversubscribed highway trust fund, making a bad situation worse, We're trying to get the government to generate more money for transportation, not less." Of today's primary states,Indiana would lose $183,722596 and 6,390 jobs; North Carolina $203,319,748 and 7,071 jobs. (See pdf of list here)

A candidate who does not support cutting the gas tax recently said " We are going to be having a lot of conversations this summer about gas prices. And it is a perfect time to start talk about why we don't have better rail service. We are the only advanced country in the world that doesn't have high speed rail. We just don't have it. And it works on the Northeast corridor. They would rather go from New York to Washington by train than they would by plane. It is a lot more reliable and it is a good way for us to start reducing how much gas we are using. It is a good story to tell."

Edwin wrote:

Not only that, it would strip money from the highway fund which we need for infrastructure maintenance.

I live in New York State. I don't think it would make a hill of difference. The roads in the Hudson Valley are awful, and yet they continue to build new roads. The newest major road they built here, Rt 747 near Stewart International Airport, completed within the year, is already sinking in certain spots. They have orange signs warning of a "BUMP", yet it's more like sink-holes some 3-4 inches deeper than the road should be. Cars love it.

Paleocon wrote:
Ulairi wrote:
I still say that there is an enormous difference between populism and demagoguery. I think it is possible, for instance, to have a sober discussion about fixing our Indian trainwreck of a health care "system" which addresses the need to provide basic public health. That would be populist.

That may be, but today, populism in practice is all about demagoguery. It isn't about driving costs down with basic public health, but about stopping big drug companies and the big insurance companies (notice, it's always a big company?), or instead of a real energy policy it's about stopping big oil.

But perhaps you will agree then that the reason why those arguments are so compelling is that Bush and the rubber stamp GOP congress really did give the government away to the big companies.

Sure, that the argument is compelling does not negate it from being demagoguery. The argument that violent games pose potential hazard to youth culture, or that the popularization of violence in general is dangerous to youth culture is dangerous- that’s compelling. And it’s why people overcorrect and outlaw all violent games. Doesn’t make it the rational response though.

LobsterMobster wrote:
Mixolyde wrote:

Maybe I'm a pessimist, but the realist in me sees gas station owners winning big and everyone else losing.

I think that's what they call price gouging, which is illegal.

Adjusting their product price fair market value is not gouging. Fair doesn’t mean nice, it means that the public has voted with $$ that they will pay that amount en masse. At the moment, it seems that fair is a lot more than it used to be.

So when every gasoline supplier moves in lockstep to increase the price of a good simply because they can, that's not the free market at work.