Read Us Your Way
Track all the latest updates via RSS, Twitter or Facebook. Or get a daily digest of posts delivered straight to your inbox -- just sign up using the form below.
Contact Us
Got a comment or question? Contact us via Twitter at @thebudgetguy or @CGandG.
RSS Feed
Recent comments
Advertising
Order from Amazon
Copyright
The content of CapitalGainsandGames.com is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License. Need permissions beyond the scope of this license? Please submit a request here.
I disagree with Andrew here. I like the separation of powers (e.g. gridlock is a great thing), and -- although a quick search did not reveal the specific edits -- I believe that the administration was working in the public's interest here. Using the clean air act to regulate CO2 would be an abomination, and any creep in that direction is bad.
CO2 is a crucial piece of the ecological life cycle (part of what you exhale), not pollution. Speculation about disease based upon speculative inadvertant human terraforming (aka anthropomorphic global warming) does not strike me as crucial testimony. Striking such out is certainly weak toast in support of an argument that the administration is absolutely corrupted.
In case one might choose to ignore my comment as from a wacko right winger, I would point out that I approve of Mankiw's Pigou club (and Andrew's inclusion). I think a carbon/gas tax makes sense for national security, economic, and pollution/environmental concerns (with GW being only a small speculative part).
My economic argument for a gas tax (beyond the benefits of having a Pigovian tax to balance the market) is that it would be useful to pull forward the inevitable Energy change over (alternative energy R&D,etc) so that we continue our leadership in this crucial industry (regardless of how the current Exxon/Mobils fare).
From 2004:
http://www.ucsusa.org/news/press_release/preeminent-scientists-protest-b...
"Power corrupts. Absolute power corrupts absolutely."
The first problem is getting elected. A candidate can end-up looking like a Shmoo---all things to all people.
Witness Obama's wanderings through the thicket of guns, marriage, faith-based organizations, facts on the ground in Iraq, Jerusalem.
Not a pretty sight, but it won't matter once one of them is in power.
He's following the playbook. As Lou Cannon noted in his second bio of RWR, Reagan's 1981 "budget" never mentioned deficit or balancing the budget either.
What to make of McCainonomics? "A point in all directions is the same as no point at all."
From The McCain Economic "Team"
Intellectual diversity, for better and for worse.
by Andrew Ferguson
02/25/2008, Volume 013, Issue 23
"As for his team of economic advisers, they continue to see in McCain a picture of their own aspiration. "He's a deficit hawk above all," Rudman told me. "Has been since the day I met him."
"He understands that the solution to our long-term problems will involve some shared sacrifice," Pete Peterson says. "And I think his leadership skills will be very effective in putting this idea of shared sacrifice across."
"I tell him: 'Stop mentioning Pete Peterson!'" Kemp says. "And he gets that. You look at Reagan. He ran a conventional Republican campaign in '76: limit spending, balanced budgets. Then [supply-side economist] Art Laffer and I and some others managed to talk to him. And in 1980 he ran as a growth candidate. I see something similar happening with John.
"It's true he doesn't have the same historical interest in economics that Reagan had. Reagan got it instinctively. But when I talk about the Bush tax cuts and John says, 'I don't think we should give money back to people who don't need it,' I say, 'John. John. That's not why we cut tax rates. We do it to incentivize people to put their capital at risk for new investment and capital formation.' And he gets that. He gets it. "I don't want John to be perfect. Politics is multiplication, not subtraction, and he needs support from all sides. He just has to listen to the right people."
AND
"McCain's method in domestic matters, no less than in foreign affairs is military: He surveys a set of facts, identifies a villain, fixes him with his steely gaze, and then goes after him....
....The tobacco legislation that McCain shepherded through his Commerce Committee in 1998, for example, was inspired by his revulsion at the seven tobacco executives who testified before Congress and famously refused to admit, under oath, that cigarettes caused lung cancer. "He just couldn't stand their lying that way," an aide said at the time. With its huge increase in cigarette taxes and its elaborate system of penalties, the legislation was one of the largest regulatory schemes ever cooked up on Capitol Hill. It was also a classic bill of attainder, designed to push the tobacco companies to the brink of bankruptcy without driving them out of business altogether.....
What's unsettling is that you can never predict who the next bad guy will be. No consistent economic principles can be extracted from McCain's grab bag of policy positions, and no amount of textbook baloney about the free market, deregulation, and limited government will deter him from bringing his malefactors to justice. McCain's economics aren't ideological but improvisational--a campaign with shifting fronts, running on indignation. And a very large number of voters, probably a majority, will find this approach appealing because they don't buy all this textbook baloney about the free market and limited government either. When President McCain finds his villain and pursues him however he can, they will likely cheer their president and egg him on--unless, of course, he fixes his steely gaze on them."
Andrew Ferguson is a senior editor at THE WEEKLY STANDARD.
As usual, McCain leaves me longing for the McCain of 2000.
FYI http://www.nytimes.com/2008/07/08/us/politics/08econ.html?_r=1&ref=polit...
Check out the last paragraph. Looks like someone bought Holtz-Eakin a shiny, new shovel.
By the way, the article places Phil Gramm on the deficit hawk side. I know he was behind Gramm-Rudman in the 80s, but isn’t he more of a “free lunch”, “have our cake and eat it, too” kinda guy — i.e., a believer that if we keep cutting taxes, the combination of supposedly very large revenue feedback effects plus supposedly realistic spending cuts will supposedly reduce the deficit?
"...unless there were a severe recession or some other type of extreme situation"
Am I to believe my eyes? I thought we were already there.......oh, yea, I need to stop listening to the media.....we need two quarters of NEGATIVE growth BEFORE we're in a recession.....I keep forgetting.....
Oh yea,
Tax cuts?......sunset 'em
Iraq War?.......never for it, never will be for it.......but I'll correct W's terrible misjudgement.......just don't put me on a timetable
Oil prices?.......not a problem......I'll get right on it.......
You're right. McCain is a moron.....
thanks the post
Given that there is less geographic flexibility for two-income household unemployed (can't move the other spouse or you wind up in the same place you're already in), I think it's surprising that the rate is that low. There may even be some geographic stickiness for Female HH, as they often have a support network they don't want to leave or cannot/choose not to move away from an ex-spouse. This should lead to higher overall unemployment and substantial "under-employment".
"he's donating to worthy charities at rates that far exceed the vast majority of all of us"
If I were making Limbaugh's wages I'd be donating to charitable neoconservative think tanks too, and in fact at a much higher rate than Limbaugh (I don't require a private jet).
His generosity (whatever rate it is) might look nice to some, but the truth is he should be giving, and if he wasn't spending it as fast as he made it he could set up foundations, invest, and make his donations grow to be much more. But short-sighted living is so American, and Rush is a red blooded American if nothing else.
Limbaugh is a windbag who has only served to polarize Americans . . . to the point where we're more polarized than at any time since the civil war.
Congratulations to him . . . he's secured his place in history as a fomenter of discontent and extremist politics, and for being a guy who, without the protection of his wealth, would be in prison for illegal purchase and use of drugs.
You all seem to me to be missing the significance of one word in what Buckley said: "material."
If it is not extracted from the earth, grown on the earth, manufactured from earthly materials (or those from meteorites), or assembled from a combination of extracted, grown, or manufactured stuff, I think you will have to agree it is not material under any reasonable definition of the word.
No one sensible would argue that financial systems do not create wealth through trade. The catch is all of the financial wealth available won't guarantee you food, shelter, and transport if there is none to be had at any price.
This seems to me to be the central problem with solely economic and financial perspectives on life. We depend utterly for our existence for non-financial systems in which we are embedded, and for which we have little to no means of valuation.
On the central point of this dialog, to the extent that manufacturing is absent from regional economies, the innovators, whether engineers or financiers, will find the base on which their activities depend eroding. If the linkages between these activities become too stretched, whether by geographic or cultural distance, the pace and effectiveness of innovation decline, and this decreases the competitiveness of economies where this occurs. This means that capital and labor are less efficiently deployed.
So what if he's spending as fast as he earns it? I guess you've missed the details of how he's donating to worthy charities at rates that far exceed the vast majority of all of us.
If any of you think you can do a better job, let us all know when you have signed a contract of Rush's magnitude and we'll all take copious notes......
bakho said: "About the best that can be done is to try to flatline defense spending the way Clinton did and let it drop as % GDP over time."
The problem with that approach is that Clinton did not flatline military deployments around the world......he escalated them significantly.....
It never ceases to amaze me how the media can look at numbers like these, and somehow slant the coverage as negative as they do......
Word on the street is you put your resume in for those, and then check with the HR folks at the company after a couple weeks (and no response) and the message is, "oh, that job is on 'hold'. we're now waiting because this quarter is looking tough, expenses are up, etc., etc."
They may be posted but that doesn't mean the job will be filled.
I still see a lot of high paying jobs posted on employment sites.
http://www.realmatch.com
http://www.indeed.com
http://www.simplyhired.com
Lots of jobs posted here.
Actually, the drop in oil demand was permanent and only slowly rose over the next 17 years. It was 2000 before US oil demand returned to 1978 levels. In 1978, most cars got 10-12 mpg. By 1983 it was over 20 mpg.
The US oil demand is here:
http://www.eia.doe.gov/emeu/aer/pdf/pages/sec5_20.pdf
(Because refined oil products have limited shelf life, refinery input closely tracks demand).
Between 1978 and 1983 there were two recessions. The last one being the most serious since the Great Depression. That probably had something to do with reduced demand for a lot of things.
Reagan also convinced the King of Saudi Arabia to flood the world with oil to deny revenues to the Soviet Union (which was occupying Afghanistan at the time). It was part of his Cold War plan to defeat the Soviets.
bakho,
First, I'm not much for equating sound-bites with policy and then judging the relative merits of alternative policies on that basis.
Second, they both seemed to be advocating reducing our dependence on foreign oil, so I'm not sure how your question/implication/point relates to what I said.
As for the proportion of the oil we consume coming from domestic vs. foreign sources, that issue seems overrated to me. My understanding is that, because the price of oil is set in a global market, and because even additional U.S. production (e.g., ANWR and offshore) would be a drop in the bucket of the total world supply, the retail price of oil and gasoline in the U.S. would not be significantly affected by changes in that proportion. But a major disruption of the supply of oil that is now produced in the Middle East shipped throught the Persian Gulf sure as heck would increase the retail price of oil and gasoline in the U.S. even if we were producing more of the oil we consume. So we'd still have to fund the Defense budget sufficiently to protect that supply.
Between 1978 and 1983 US oil demand dropped by over 20%. After 1983, Jimmy Carter energy policy was replaced by Reagan policy:
http://www.flintexpats.com/2008/06/energy-deja-vu.html
So Brooks, are you saying that Jimmy Carter was right and Ronald Reagan was wrong about energy policy?
http://www.flintexpats.com/2008/06/energy-deja-vu.html
The issue isn't refinery capacity - it's the capacity to produce oil at a rate sufficient to meet demand at a price acceptable to US consumers and policy makers. If the world's oil producer no longer possess that capacity or possess it but no longer desire to exercise it, then the question of refinery capacity seems less urgent.
Add "spend more on public transportation infrastructure than on black top" to your prescription and I agree with you.
Re: oil and the Defense budget, I have a different question: If we (and our allies and the world) were much less dependent on oil, how much could we cut from our Defense budget? How much is necessitated by our need to (try to) protect the oil supply (trying to maintain regional stability in the Middle East, guaranteeing open shipping lanes in the Persian Gulf / Straight of Hormuz, etc.)
And while we can't go back in time, if we hadn't been propping up the House of Saud all these decades, and fought the first Gulf war to keep Saddam from controlling/threatening too much of the world's oil, following that with permanent bases in Saudi Arabia, would we need to be fighting a "war on (radical islamist) terror" today?
So the first question I ask is how much dependence on oil for non-Defense consumption necessitates incremental Defense spending in general? Anyone know of any studies/analysis of this question?
Current profit margins for the large oil companies are about 10%. So with $4 gas, we'll say ~$1/gallon in taxes (direct and indirect), they only have about $0.30 per gallon to play with and remain profitable at all.
Keep in mind that shareholders demand high returns for high risk, and one has to admit that the future of oil companies is risky - talk of windfall profit taxes, OPEC, civil war in Nigeria, nationalization in Venezuela, hydrogen economy, electric vehicles. 10% profit margin is not really that crazy.
Of course, there is a reason why oil companies can't just go out tomorrow and charge $10 per gallon for gasoline right now: competition with other oil companies. Thus the supply and demand plus a small amount of profit ends up determining the price.
We call this a "market".