Why taxing the sale beats taxing the profit from sale.

Mankiw explains why a tax at the pump would work better than taxing windfall profits and subsidizing hybrids. The whole policy plan proposed by Obama seems to be a Rube-Goldberg-style invention to avoid saying we will tax your gas purchases, while attempting to accomplish the same larger goals such as discouraging petrol use (in the hybrid subsidy) through eating into oil company profits (via the windfall tax) when you'd easily accomplish both via a tax at the pump. At least, however, the larger goal is there, opposed to a larger goal of, say, more petrol use or ignoring the problem.

Also, when Obama was in Cleveland Tuesday, he was heckled for not starting with the pledge of allegiance at the beginning of the "town hall meeting." Obama, clearly bemused, tells him "You want to lead the pledge of allegiance? Go ahead."

At the end, the man is asked, "did someone say we're going to say the pledge of allegiance at some point?" and the man, John Quinn, clearly admits, "No!" and so no one is sure why he presumed it would happen.

A Brief FAQ

from Robert Reich.

The value of bare land.

Jay Newton-Small: "While millions of Americans drive to work and depend on their cars, there is a multi-billion dollar hunting, fishing and wildlife viewing industry that depends on pristine lands and waters -- areas that have suffered under Bush. And they vote, too."

I actually kinda want one. Sincerely, not Satirically.

In Barack Obama's energy speech yesterday, he said: "For the sake of our economy, our security, and the future of our planet, we must end the age of oil in our time."

Paul Krugman's comment was: "Now that’s more like it — a hard-hitting political speech with a solid policy proposal behind it." Krugman is of course more Keynesian than most, but the proposals at least demonstrate that Obama wants to move in a direction of less reliance on oil.

There are a few misleading policies among them, including Obama's call "to meet the goal of reducing our demand for electricity 15% by the end of the next decade. This is by far the fastest, easiest, and cheapest way to reduce our energy consumption..." Unfortunately, the fastest and easiest way to reduce demand for energy is to... make it cost more.

Some of the less-aesthetic policies might be rationalized by asserting that our culture is in quite a rough spot with our oil-based infrastructure, and that some extra effort is needed to dig our way out. If, for example, people payed the true cost of the gasoline they burn, they wouldn't need a $7000 tax credit to motivate them to buy a fuel-efficient vehicle (150mpg, according to his 6-year goal). But a "tax credit" for hybrids is far more politically palatable than "carbon tax," (true to the proverb that a Republican cannot say "tax" without adding "cut," and a Democrat cannot without adding "on the rich.")

Before the speech, Obama received some heat for conceding that he might consider the off-shore drilling currently supported by McCain if it were part of a compromise in a broader energy package. This sort of concession is apparently being encouraged in Congress by Nancy Pelosi. Quote, "Behind the scenes she’s encouraging vulnerable Democrats to express their independence if it helps them politically." Her assumption is that, in 2009, her party will have expanded their majority in both houses, and will be able to pass legislation more along the lines of the broader energy package that Obama is now proposing.

McCain, supporting proposals such as offshore drilling and nuclear power, is poking fun at the "low-hanging fruit" in Obama's proposals: that all drivers keep their cars tuned up and tires properly inflated. His jest is through sending out tire-pressure gauges as pictured above. However, this concern is wholly non-partisan. Republican governors Arnold Schwarzenegger of California and Charlie Crist of Florida have insisted upon it, was well as, well, NASCAR. And while off-shore drilling could meet roughly "1% of our demand two decades from now... keeping tires inflated can improve gas mileage 3%, and regular maintenance can add another 4%."

If only they made the tire gauge with a presta valve.

Critical Mass Assault

A Critical Mass is an event in which bicyclists take over city streets in cities worldwide. My brother did some photojournalism from a Critical Mass event in Budapest in 2006. Budapest's event, for example, was met peaceably by authorities and local police, as are others (mostly outside the US).

Not so, in NYC:


Oddly, the officer's story is that the bicyclist ran his bike into him (the officer) causing "lacerations," followed by (the bicyclist) resisting arrest. He managed to get that in the official report of the incident, which means that, now that video has surfaced, he (the officer) might be guilty not only of assault, but also perjury!

Also, just for fun: the cyclist was an Army Veteran, and the son of a NYPD detective.

GCBL:

With Americans driving less for the seventh straight month, less gas tax (18.3-cents on every gallon) for highway building is flowing in. Transportation secretary, Mary E. Peters, thinks the short-term solution would be for the Highway Trust Fund’s highway account to borrow money from the fund’s (2.86 cents per gallon) mass transit account.

Really? The nation is (albeit slowly) leaving our cars and highways for public transport, and so we want to put less money into public transport to accommodate the increase, so we can maintain the level of funding for the highways?

A better solution might be to send it the other way: have the mass transit account borrow from the highway account. You'll transport more people/goods per dollar spent.

Possibly beating Mankiw to the punch...

A reading for the Pigou Club.