Stan asks an excellent question:

If consumers are willing to pay higher prices for gasoline, why should we think that energy companies are going to do anything but charge those higher prices?

I'm not one who blames oil companies for high prices.  I'm more impressed by how quiet the media gets when oil prices are low.  In the U.S., we act as if God decreed low energy prices. We act as if the laws of supply and demand don't apply to us.

You don't have to spend much time driving in Europe to see the difference that high gasoline taxes make.  People drive smaller cars, mostly diesel fueled, and public transportation is first class.  People also live very close to their jobs and to all the services they need.  They actually walk to market.  What a concept?  It keeps you slim too!  Try walking to most U.S. stores, and you're very likely to end up as a pedestrian fatality.

Up on Capitol Hill today, talking to a senior Democratic Senate staff protege, I was asked "What can we do to counter the Republicans on offshore drilling for oil?"  My response was, "There is no short-term fix to our long-term energy problems.  Drilling won't do it because it will take years to land any oil."  "Yes, but the voters think it's going to help now."  I responded, "Now you're asking me for cosmetics, not a solution."

In a nutshell, that's why we're 58% dependent upon foreign oil.  Every time we have an energy crisis, in 1973, 1979, 1990, and 2008, we rush short-term expedients and cosmetics into law without doing much to solve the long-term problem.  If we were serious about the long-term problem we would never have allowed gas guzzling SUV's onto the road; we wouldn't have starved mass transportation; we would have developed much more renewable energy; we would have done a lot more conservation; and MOST OF ALL we wouldn't have allowed prices to decline after the crisis, killing energy saving investments and leading us right back to profligate energy consumption.

Deficit hawks are a band of brothers as Shakespeare put it.  We didn't shed any blood in 1415 at the Battle of Agincourt, but we have fought the good fight for deficit reduction on Capitol Hill and across the country.  No two men stand taller in this band of brothers than Pete Peterson and David Walker.  Both appeared before the House Budget Committee this morning to urge the adoption of Rep. Jim Cooper's (D-TN) and Rep. Frank Wolf's (R-VA) Securing America's Future Economy Commission Act, H.R.3654.

Washington commissions are notorious for producing legislative recommendations that go nowhere because they're the right thing to do, but you will lose your next election if you vote for them.  I hope this won't be the case with this one.

When people ask me who I want to win the presidency on November 4th, I say, "I just want the government to function again."  On Capitol Hill, I worked for Republicans and Democrats.  I learned that government functioned best when Republican and Democrats worked together, traveled together, ate together, and compromised together.  The earned income tax credit I formulated and helped enact in 1975 was a Republican idea passed by Democrats.  Bill Clinton pushed welfare reform into existence, and George W. Bush expanded Medicare to cover prescription drugs.  There's a pattern here.

This morning, Fed Chair Ben Bernanke spoke on health care at the Senate Finance Committee Health Reform Summit.  His prepared remarks cited the extraordinary growth of health care spending as unsustainable, but he cautioned against harming innovation amidst the efforts to curtail health care costs.

I only met Tim Russert once, but I came away impressed in a town where chance meetings with celebrities often yield the opposite result.

We happened to be in line together at the Catholic University gym one Saturday morning years ago for Little League tryouts for his son, Luke, and my stepson, Morgan.  My first thought was to give him a moment's peace, but other dads came up and talked to him, so I got involved too.  I don't remember what we talked about, but it wasn't about politics or issues.  He was ordinary -- without any of the usual Washington affectations of poorly hidden power.  I do remember how happy he was and how happy he was to be there with his son.  Luke obviously felt great that his dad was there for him.  I've met too many other Washington celebrity sons who rarely saw their dads and who fell into trouble at school and with drugs -- one even committed suicide.

This weekend, when I first heard the news about Tim Russert's untimely death, my first thought was to feel bad for Luke to lose his dad so young, but then I thought how fortunate he was to have such a happy and loving dad.

Today, the Urban Institute Brookings Institution Tax Policy Center published a detailed analysis and comparison of the tax policies of Senators McCain and Obama.  It represents the most detailed and analytically sound study of their tax policies we are likely to see before the election.

It concludes that compared to current policy, Senator McCain would cut taxes by $628 b. over the next 10 years and that Senator Obama would raise them by $734 b. over the same period.  Most of Senator McCains cuts go to middle and high income individuals, while most of Senator Obama's cuts would go to low and middle income individuals.  Both would raise revenue by broadening the corporate tax base, and Senator McCain would cut the top corporate tax rate from 35% to 25%.  Senator Obama would also raise the capital gains and dividends taxes and eliminate certain foreign tax benefits for individuals and corporations.

It depends upon whom you ask.  Most business leaders and investors favor Senator McCain's low tax, less government spending, free trade stance, despite McCain's admission to The Wall Street Journal on November 26, 2005 that "I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated."  However, if you ask low-income workers, the poor, those without health insurance, and those whose jobs have been outsourced, Senator Obama would be favored, despite his lack of business experience.  The differences are stark and clearly defined.

However, as a "deficit hawk," I have a much more difficult time deciding between the two.  How much, if anything, would they do to lift the terrible $3.9 trillion of additional public debt that President Bush has incurred on behalf of our children?

The climate change debate began in ernest in the Senate yesterday afternoon.  Few are questioning the science anymore; the earth is warming.  The question is how best to control carbon emissions to reduce future global warming?

We economists usually recommend a carbon tax as the best way to go as Andrew eloquently explained on NPR last night.  We like that fact that the tax is explicit, not hidden, that it is efficient, minimizing collateral damage to the economy, and that it is effective, raising the price of greenhouse gas emissions and encouraging alternatives.

I kid my friends that "I formulated three carbon taxes for Bob Dole back in the early 1980's that are still in his filing cabinet."  I'd be very surprised if the former Senate Finance Chair really kept them, but the fact that they were formulated at all shows that Senate leaders, then as now, were fully aware of of the advantages of a carbon tax.  That none of those proposals saw the light of day is conclusive evidence that:

Political leaders don't want

Unfortunately, we have the same income and food distribution problems Amartya Sen talks about right here in the U.S. Yesterday's Washington Post documented one woman's struggle to live on Food Stamps, a program which is not indexed to inflation and which has become a political football in this year's farm bill. Congress just enacted that bill, H.R.2419, over President Bush's veto. It arrested the steady decline in Food Stamps, but it didn't restore any of the lost value of Food Stamps since the 1996 and subsequent cuts under Presidents Clinton and Bush 43. The Center for Budget and Policy Priorities documented the decline on May 23rd.