Gasoline: Too High and Too Low

We often hear that the internet has created a brave new world of globalization. But the truth is that the internet had very little to do with it. The net has allowed certain jobs to be outsourced, like help lines moved from your home town to India, where nobody can give you any help. But globalization preceded the internet, and depends on two other things. Namely, the shipping container and cheap oil. Prior to the shipping container, goods had to be manhandled onto a truck at the factory, manhandled off the truck and onto the ship at the port, and off the ship and onto a truck at the next port. All this manhandling made shipping costs too high for low-valued goods, such as lead-painted toys from China. But now the toys, lead and all, can simply be loaded into a container in a remote area of China and never touched again until they reach a Walmart warehouse in a remote area of the United States. This means that the lowest paid workers in the most remote parts of the world can compete with the working man down the street. And all of this is made possible by cheap energy.

The shipping container is here to stay, but not so cheap energy. That long ride from Sichuan to Beijing, that long voyage from Beijing to Los Angeles, that long trip from LA to Arkansas is becoming prohibitively expensive. The net effect should be to make American-made goods cheaper relative to foreign goods. And that's good for America. So, is the run-up in oil prices good or bad for America overall? The truth about any price is that it should not be high or low, but that it should be right. What is the right price for any commodity? It is the price that adequately compensates all the labor used up in its production, (including the “stored-up” labor known as “capital”), and that it account for all the “externalities” of the commodity. Now, the production costs of oil are very low. It costs the Arabs about $9 to raise a barrel of oil to the surface. Even adding in the handling and shipping costs, one can still make a nice profit at $120. So it would seem that the price is too high. On the other hand, the externalities of oil are very high. Obviously, there are the costs of pollution, but there are also other external costs: the cost of armies stationed abroad and wars to protect remote supply lines; the cost of highways, the least efficient form of transportation. Cheap energy has made possible the automobile, which has changed the shape of cities, or rather made cities somewhat shapeless and sprawling. This has imposed tremendous infrastructure costs on cities, costs which they have difficulty recovering. And many more things could be added to this list of externalities.

The answer is, then, that from the standpoint of economic rent, the price is too high, and from the standpoint of economic externalities, the price is too low. So what policies should be followed in a “too high/too low” situation? One answer is given by those who want to follow the European model, by which gas is already taxed to the point of being twice the cost it is here in America. This model has some success, in that the Europeans drive smaller cars and drive them less because they live closer to work and shopping. Even naïve libertarians like Charles Krauthammer have endorsed this solution. But I believe this European/Libertarian solution to be too crude and too government-oriented to be what we need now.

Hillary Clinton and John McCain are taking the opposite tack, at least in the short-run; they want to lower the taxes on gasoline. McCain's proposal really means that he wants to borrow more money to buy votes; Clinton at least wants to finance the cut with a tax on the oil companies, who can well afford it. And everybody has their own private palette of long-term solutions, some good, some dubious: more conservation, more drilling, more nukes, more carbon-taxes, more mileage standards, more ethanol, more ANWR. These solutions are indeed long-term, and will do little in the short-run. But since this is a game anyone can play, allow me to offer my own menu of solutions, solutions which address both the “too high” and the “too low” aspects of the problem.

Gas is Too High (Economic Rent)

It is beyond question that the high profit margins of the oil giants represents an economic rent, and such rents, or at least some portion of them, can always be recovered through the tax system without negatively affecting the economy. See (Taxes: Advice from Adam Smith). Some will argue that taxing the excess profits will reduce incentives. However, this argument ignores the fact that incentives, like every other economic quantity, are marginalized; that is, they are subject to the law of diminishing returns, one of the most basic of all economic laws. At some point, an additional dollar in incentives will not lead to an additional dollar invested in drilling, and the next dollar in incentives will actually lead to fewer dollars invested. Excess profits, when they truly are excess, when they truly constitute an economic rent, can safely be taxed. Further, it is far more efficient to collect the gas tax at the producer level than at the retail level. Hence, we can transfer the tax at the gas pump to an excess profits tax, and get the same money (or more) at a lower collection cost, and less aggravation to nearly everybody, except for a few oil company executives.

Some will argue that this will only increase the incentives to drive more and waste more, and they would be right, if it is not coupled with measures to address the externalities.

Gas is too Low (Externalities)

The most important thing is to end the system of subsidies known as the “freeways.” Roads should be funded by tolls, as I have argued previously (see Free Markets, Free-ways, and Falling Bridges.) This places the cost of remote living on those who wish to live remotely. More power to them, but don't ask the rest of us for a subsidy. The toll makes the gas tax unnecessary, to the extent that the tax is used to fund roads.

Mileage Standards are needed, but not as a set of bureaucratic diktats enforced by ever-growing bureaucracies. They can more easily be enforced by a system of consumption taxes and subsidies paid at the time of the purchase of a car. For example, suppose that the government sets a target of 35 MPG. A car that is judged to meet the standard would neither be taxed nor subsidized. But one that got only 25 MPG would pay a steep luxury tax, and one that got 40MPG would get a rebate. Those who insist on buying the biggest Hummer they can get will be taxed to support the more frugal driver. Think of it as a cap-and-trade system of carbon taxes for the common man. As it is, the cap-and-trade advocates only like it when it can be used by corporations. But if it is good enough for Dow Chemical, it is good enough for all of us.

The same principle can be used for anything that consumes large amounts of energy: furnaces, hot water heaters, appliances of all sorts, etc. Suddenly, there will be real economic incentives to buy the most efficient products, and disincentives to waste energy. And the same thing can be done for home energy costs: end all the taxes on energy bills, but place high luxury taxes on high users. Those who want to cool their homes to 60 degrees in the summer and warm it to 80 in the winter will pay a high premium to do so, while those who combine modest heating with warm clothing will see a reduction in their bills. Note that all of these taxes are avoidable to the extent that high energy usage is avoidable. Those who are responsible are rewarded, and rewarded without extensive bureaucracies. Those who want to live large will pay much, and more power to them. But in both cases, people are free to make a choice, even if we use public means to influence the choice.

I believe these principles will completely change the energy markets as we know them, and make the whole system more economically efficient. Nor do they require great social changes and high investments for them to be immediately effective. However, they will encourage great social changes in a relatively short period of time, changes that will be of great social and economic import.

The sages at Lehman's are predicting $200/barrel oil, and T. Boone Pickens has picked $150 as his target. Now, I am in no position to quarrel with these worthies, but I suspect that oil will actually drop 10% or 20% before it rises. But even if it drops, it will still be expensive, and that is not something that is likely to change in the current state of things. High oil prices can actually be good for the economy; they can actually increase our domestic production, while making alternatives cost-effective. And they can fund all sorts of new industries. It is not the price of oil that is the problem, but how we respond to it, or fail to respond.

23 comments:

Athanasius Saturday, May 31, 2008 at 11:12:00 AM CDT  

I was just saying this to someone the other day, high gas prices may be a good thing for Distributism, since it will encourage people to be more thrifty and self sufficient, and will help encourage a local economy. To drive the point home the local Walmart is carrying its name brands, which have jumped from 8-11 bucks, including a 12 oz package of starbucks which must be shipped many miles from a distribution center, but it is also carrying a local brand of organically roasted fair trade coffee, from a local roaster which is now 3.50 cheaper than the name brand coffees. It doesn't have to be shipped that far, and thus the price can be reduced.

Even the sweatshops of east Beijing can't offset diesel at 5.00!

Anonymous,  Saturday, May 31, 2008 at 11:33:00 AM CDT  

Question: While you use the example of a gas-guzzling Hummer in the second part of your tax incentive/disincentive program, what about the "good" uses of larger and therefore low gas mileage vehicles?

I am assuming as a distributist that you would encourage large families. Large families require larger vehicles. So if you have a family of 8 or more, then one is left with few choices other than vehicles that get lower gas mileage. But if I were taxed to support the (selfish in many cases) one child family that can fit into a Prius, would that not be yet another disincentive to open and generous to life and have more than one or two children?

I am sympathetic to the disapproval of SUVs as they are use by most families, but what about those families that have many children? Would your plan include another seprerate gas Tax "Rebate" to large families that actually need a larger vehicle?

As an aside, I enjoy the thoughtful posts here, and find this one of the best defenses of Distributism, of which I am a supporter.

Jeffrey Wilson

Lotar Saturday, May 31, 2008 at 12:37:00 PM CDT  

I had the same thoughts as Anon about large families and taxes on larger vehicles.

Another thought I had is that other problems need to be addressed in many areas before "punishing" commuters. Here in Southern California, for example, it is nearly impossible to afford to live in the same city that you work, especially if you have a family. Few people actually want to commute an hour to work.

Other than that, I agree that higher gas prices can be a good thing. Most especially for the reestablishment of local economies.

John Médaille Saturday, May 31, 2008 at 7:08:00 PM CDT  

@ Jeffrey and Lotar, excellent comments. Certainly there are legitimate uses of larger vehicles, namely, to carry larger loads, such as larger families. I can relate to this comment, since I remember the fun, as a child in a large family, piling into the family corvair, a vehicle simply not designed to accommodate our crowd. There was just too much togetherness.

More recently, we see the odd phenomenon of family shrinking to a mere nub and the family car growing into a truck. The problem up until know is that the people who bought the truck, even though they had scant use for them, didn't really care about the costs. But as they fuel to run the truck is growing increasingly expensive, they are caring more and more. I suspect that the market will respond with vehicles that achieve some compromise between size and cost.

I do not think it correct to call this a "punishment" of the suburbs, unless taking away a subsidy is a punishment. Rather, it is a better allocation of costs, and that will cause some realignment in the shape of cities. Or rather, it will give some shape to cities. I am familiar with the problem you mention, since we lived in Garbage Grove down in Orange County for 10 years, and my father worked in downtown LA, back when there was a downtown. I suspect, for example, that there will be a big change in relative home prices, with a steeper decline in prices the further away from centers you get. Some suburbs will wither, and become more rural. Others will prosper. But there will be a greater range of prices and a steeper price gradient related to distance than there is now. So much so that the losses to tolls will be regained by the lowering of housing costs.

Of course, all this has to be coupled with many other reforms, none of which were addressed in this particular post.

Tpolg Saturday, May 31, 2008 at 10:00:00 PM CDT  

Excellent ideas! Also though not particularly to do with gas prices, I would like to see a luxury tax surcharge on vehicle registration. Of course each individual would get one exemption but after that, POW! Obviously corporations (may the earth be cleansed of their villainy) would take the biggest hit.

Anonymous,  Sunday, June 1, 2008 at 6:09:00 AM CDT  

"Roads should be funded by tolls ... This places the cost of remote living on those who wish to live remotely. More power to them, but don't ask the rest of us for a subsidy."

OK. Just don't ask those of us who "live remotely" in rural areas for any food.

Fr. Andrew Sunday, June 1, 2008 at 10:08:00 AM CDT  

Like the second anonymous, but hopefully more gently, how do you propose to use tolls in rural areas? I am a priest in SD, with a population density nearing 0 (9.9 per square mile). If I want to go to Ordinations, then it is 400 miles round trip- fact.

I certainly understand the toll/infrastructure argument, driving is seen as a right and not a privilege in America and tolls would help correct that. I am just wondering if there is a nuance for rural areas.

As a chemist turned priest with no economic formation, I am grateful for your posts. Even if I don't always agree!

Tpolg Sunday, June 1, 2008 at 1:16:00 PM CDT  

I think it could be calibrated to accommodate rural areas (which by the way is were I live). Not all roads would need to be toll. It could also be worked so that a 200 mi trip would not be more than a 20 mi trip (unless you make a lot of stops, in which case it is really a lot of short trips).

John Médaille Sunday, June 1, 2008 at 9:55:00 PM CDT  

to Anonymous and Fr. Andrew: Farmers do not live remotely from their work. The problem is that they live live remotely from their markets. That is a more manageable problem. However, the current system of subsidies means that they compete with suppliers more remote still, in other states or even other countries.

As far as the costs for those who must travel wide distances, like Fr. Andrew, I point out that this is a matter of cost allocation. The costs are there; the question is, "Who pays them?" Where, in justice, should these costs be placed? On those who use (or at least benefit) from the roads, or those who don't? Doing business in certain areas means incurring the costs intrinsic to that area. There may be situations in which the political entity may wish to ease those costs or share them, but some caution is advisable.

I do not say that there is never a case where a subsidy would be justified; I do say that one ought to exercise extreme caution. The subsidy for the farm-to-market road suddenly puts the farmland in play for suburban development. The programs meant to help the farmer could end up hurting him, which is pretty much the history of the farm programs. All the efforts to get "save" the family farm have benefited mostly the corporate farm. One must look certain gift horses in the mouth.

Danby Monday, June 2, 2008 at 4:11:00 AM CDT  

Mr Medaille,
In what way is a gas tax NOT a fair allocation of the costs of highway construction onto those who use the service. At least in the State of Washington, the gas tax is the funding source for road construction and maintenance, as well as some of it being diverted to pay for transit subsidies, police and ambulance. The gas tax naturally and fairly allocates the costs of highway construction onto those who benefit from the highways. And, the larger the vehicle, the more in gas taxes they pay. Have you never seen the semi-tractor-trailer rigs with a "this vehicle pays $9,280 per year in taxes" plastered on the back?

A toll is not only less efficient at allocating the costs fairly, it also is less efficient at generating revenue, requiring as it does much more manpower to collect.

How is the gas tax, which is paid at the pump, to the retailer, more "crude and government-oriented" than a toll booth at which a government officer demands payment before allowing you to use the public highway? If you can't pay? too bad, go home. Unless of course there's a toll booth behind you as well. Then you can just go to hell, but you're not using the highway unless you pay. Yes, so much more elegant and less intrusive.

John Médaille Monday, June 2, 2008 at 9:25:00 AM CDT  

@Danby. The Gas Tax may be the funding source for the highways, but that means you get charged for them whether you use them or not. I work at home, and use mainly surface streets, which are funded by the property and other city taxes.

The issue is one of proper cost allocation. To give an example, 10,000 people here in Dallas moved out to a remote suburb over a two-lane asphalt road. They then demanded that the legislature give them a new highway, with it did--three of them, in fact--4 to 6 lane concrete beauties. There is no way their gas taxes could fund this legislative largesse. Instead, taxes are taken from people in Dallas and Houston and Austin to pay for a comparatively small group of suburbanites somewhere North of Dallas. But this network of highways gives these remote homes a competitive advantage over homes and properties in Dallas, Fort Worth, and the inner suburbs. In other words, people are forced to subsidize one group to their own detriment.

You are right that there are collection costs. However these costs are much reduced with the advent of toll-tags; I never stop at a toll-booth. Further, there are collection costs with the gas tax as well, they are just placed on the retailer, who has to collect it, account for it, report it, and pay it.

Fr. Andrew Monday, June 2, 2008 at 10:10:00 AM CDT  

John-

Thanks for your answer. Regarding cost allocation, where does the issue of public works or infrastructure fall into place? Though I think your later comment might answer that. Is prudence the measure of justice here?

Most of your examples focus on those who voluntarily drive large distances. Having lived in Denver, CO, for 4 years of seminary, those examples make sense. I doubt SD roads could be maintained solely by tolls, as traffic is minimal when compared to the suburban commuter freeway.

I hope that isn't too limited scope nor too focused on "fly-over country."

John Médaille Monday, June 2, 2008 at 11:02:00 AM CDT  

@ Fr. Andrew. Prudence is, of course, the mother of all virtues, or at least the mother of all applications of the virtues. Only with prudence can we apply general principles to specific situations. Our principles are, we hope, firm, but our applications are always circumstantial. In prudence, and in fact, North Dakota is not New York and the application of general principles will not lead to precisely the same policies.

What is really required is that we are conscious of what we are doing, and be able to advance good reasons for doing it. Consider two statements: "We are subsidizing this road because..." and "This is simply the way roads are built." The first instance invites comment and critique or whatever clause follows the "because," and reasonable judgments can be made. The second statement cuts off all debate, and therefore cuts off all reason. It engraves the habit of subsidies on the mind and on the political order.

Maybe the latter is the way to go, and maybe not. But I certainly think it deserves discussion.

discalcedyooper Monday, June 2, 2008 at 1:39:00 PM CDT  

I tend to be of several minds on the matter. In kind of a descending order:

Tolls: I think these are invaluable for properly allocating the costs of high speed routes. What would truly be scary is if they were taxed as a property thus resulting in a higher toll. While this wouldn't make a difference in Montana, it would properly compensate Chicago and other large cities for giving their land.

Poll Tax: A car tax should be allocated (outside the administrative cost) to the city or barring that the county for which the vehicle is licensed. This has the benefit of weeding older vehicles out of the system, incentives shared use, and compensates for the local costs of infrastructure better.

Fuel Taxes: I generally favor higher fuel taxes to discourage pollution. I think they are a better driver of efficiency than they are a driver to reduce fuel usage. The biggest advantage is that they are relatively decent measure of use. One could meter and tax vehicles almost as easily: get odometer readings at the end of the year and multiply. Civil libertarians would probably complain that doing that would be intrusive.

Lotar Monday, June 2, 2008 at 7:32:00 PM CDT  

John,

I could see your point in the sense of upper-middleclass suburbanites who move 45 min from their workplace in order to own a 4,500 sqr ft home, and drive a huge SUV, though they only have one kid and a dog. On the other hand, it punishes those who were pushed out of their own cities by the above mentioned people, and those who drive a Suburban because they have 7 children. And, if local experience tells us anything, toll roads are far from effecient.

I don't know about Texas, but in Riverside County, California there are about $20k or more in fees for schools and infastructure for the construction of each new home.

I tend to think that the problem could be better addressed though effective city planning, strict zoning regulations, and incrimental increases in gasoline taxes - most especially diesel - to slowly raise the price of shipping and encourage local economies.

I would also support the idea of slowly decreasing highway and freeway capacity. I also have been throwing around the idea of taxes and tarriffs on products based upon the distance between manufature and sale.

My own thoughts. Maybe I'll flesh them out more clearly on my own blog.

Anonymous,  Monday, June 2, 2008 at 8:17:00 PM CDT  

Mr. Medaille: As hinted at in my first post, I do think it behooves us as Americans to think about the exaggerated, even unwise, use of larger vehicles, and the costs of commuting, both in economic terms (externalities, e.g.) and in societal terms (benefits of a smaller geographical locus )- but as indicated in just a few of the posts here, we have been able to identify just a few issues with the proposed plan.

The replies to these concerns seem to mimic those of a libertarian. Please let me explain, for I have read enough of your material (and good stuff it is!) to know that you are not a libertarian.

The defense is that it will "better allocation of costs", and that it will take into account the economic externalities. Yes on purely Economic grounds, this would seem to be correct. But is this not the standard defense of libertarian economics: Economics says it is "best" (given its "value-free" scientific "findings"), therefore we must do it in real life. But as you and other Distributists have cogently argued, there are higher, "value" laden spheres that not only do inform "economics" (consciously or not) but must inform economic choices- i.e. Ethics, Religion, etc..

And thus the query about what your law would do for a "value"-laden goods (to most Distributists any way)- a large family, and small rural towns . As to Rural towns/communities, for the foreseeable future, many in the smaller towns rely on travel to the larger cities "near-by" for jobs. While your plan would have the long term benefit of forcing people to live/act locally, what would they do for jobs/income in the short (5-15 years) term while the system reacts to the changed energy/transportation "rules"? What factories would open (or re-open) locally to employ people? Again, as Distributists, I think we would not be so callous as to not worry about real people in the "short term". In fact, many would move closer to the jobs as they currently exist- which means moving to the cities, which would aggravate many other problems (ones that Distributists would also like to "slay") and hasten the decline of rural towns.

As long as the very large corporations have any say-so, I am dubious that they will not be able to rig the system so that they still would keep the entrance costs too high for local manufactories from starting. And to counteract this power, your plan would have to account for many other aspects other than just transportation costs.

It may be that if the policy were implemented, with out a broader plan to encourage truly small communities, by itself the plan may do more to accelerate the demise of the large family and rural communities.

Now having said that, I do think your plan is a useful thought tool. It just seems it may do more harm if done in isolation.

Maybe you could expand on other related policy areas to address some of these questions/concerns?

Sorry for the "Anonymous" I am not a certified Blogger. But I do sign my true appellation:
Jeffrey Wilson

John Médaille Tuesday, June 3, 2008 at 9:19:00 AM CDT  

@ Jeffrey. Excellent post! Let me address your questions, starting with the last one, It just seems it may do more harm if done in isolation. This is correct. As I explained to Fr. Andrew, we are speaking here of general principles, but such principles must be applied with prudence judging each case on its particular circumstances.

As for Libertarianism, while I am sympathetic with many of its aims and most of its analysis, I do not think that libertarians (or at least the right-wing brand) can property account for economic rent or externalities (see http://distributism.blogspot.com/2007/09/why-i-am-not-libertarian.html)

As for the distance problems in rural areas, it may be that the replacement of gas taxes with tolls may be a net-zero or near-zero trade. But just as globalization is dependent on cheap energy and subsidized transportation, the removal of these will act quickly to localize and regionalize economies.

This is especially true of farming, which has become highly dependent on cheap energy and global markets, and, I might add, over-capitalization. And the energy is only cheap because we ignore the externalities. Removing these will go a long way towards changing the economies of scale for farming, and bringing back both the family farm and the local economies.

But it is not just farms; manufacturers will also gain a competitive advantage by moving production closer to final markets.

You are certainly correct about the power of large corporations, and their ability to subvert any reforms to their own advantage. They must be watched; better, they must be broken-up or taxed out of existence.

John

John Médaille Tuesday, June 3, 2008 at 9:27:00 AM CDT  

@Lotar, You are correct about the situation in Southern California, which is now the situation in most metropolitan areas. However, the peculiar geography of that place is a direct result of the system of subsidies which we now have. The first thing to do when you so that your actions are causing a problem is to stop what you are doing. Actually solving the problem requires practical intelligence, but the principles must be firmly established.

Raising gas taxes is one solution, and one can see the effects in Europe, where gas starts at $8/gallon. However, the European solution may not work here, because distances are so much greater.

John

Daniel Thursday, June 5, 2008 at 1:11:00 PM CDT  

An excellent article and worthy of serious thought.

Two problems come quickly to mind, however, which I hope John will elaborate on. First, here in Milwaukee, Wisconsin, which is without question one of the worst, if not the worst, tax hell in America, adding a toll road would in no way stop taxes on gasoline. It would simply be another source of revenue to our State government, which spends money in increasingly foolish, irresponsible and, sadly, evil ways. They might tout a toll as a way to reduce gas taxes but they would never do it. Their record of lying in the matter of taxes is unmatched. I suspect other greedy local governments would do the same.

On the heating/cooling energy cost points you mentioned, I really cannot say, as one who has spent considerable time in the HVAC industry, how it would be physically possible for government to determine what homeowners or businesses were cooling to 60 degrees or heating to 80 degrees. I have the most efficient heating and cooling system currently on the market and my bills, of course, are going up not down because of the increasing costs of energy. Yes, they would be higher with old, inefficient equipment. But my point is that there is no logical way the government could determine what you set your thermostat to, so as to reward or punish based on energy use.

Your ideas are sensible and interesting but, like others, I foresee practical problems in some areas of the country in implementing them. Another possible problem would involve the laudatory idea of having people live closer to their work, which usually means the city. But that is not going to happen ever here in Milwaukee. People are escaping the city in droves because of an increasingly arrogant, violent and irresponsible minority population whose numbers are exploding due to Wisconsin's overly-generous welfare system, a system that encourages bastardy especially in the black population (seventy-five per cent of which, according to local records, are born out of wedlock).

We have serious problems in our city to be sure. I'd like to believe that the high cost of gas would help our city in the long run, but I'm not sure how that would be done. I'd appreciate hearing more from John.

Septeus7,  Thursday, June 5, 2008 at 5:40:00 PM CDT  

Well, I think our real problem is idea that we should be using fuel for transportation rather than electricity that can done fairly quickly if folks were really interested like the man in this article (http://www.nbc5i.com/community/16330040/detail.html-

Wouldn't the real distributist solution be distributed generation which will have greater availability with mirco generation technology? Here's an article about its potential.

http://www.independent.co.uk/environment/green-living/greener-power-to-the-people-the-real-energy-alternative-837821.html

John Médaille Thursday, June 5, 2008 at 7:26:00 PM CDT  

@Daniel, of course, if the tolls are not offset by reductions in the gas tax, you will certainly see a rise in public expenditures, which are already amazing levels. But even in that circumstance, the tolls would still have a beneficial effect. The important thing is that a principle of taxation be established and promulgated. Then, everybody can judge with reasonable accuracy whether or not the principles are being reasonably implemented. Once there is an agreed-upon principle, it gets harder to cheat.

I did not mean to suggest that the government monitor anybody's temperature setting. I merely suggest that the energy sufficient to heat a house to some minimum temperature be provided to everyone at below market cost, and at some higher usage point a premium be charged. This would totally change the economic incentives. On the one hand, it would be a kind of in-built "welfare system" for the poor, with an automatic tax on the rich, or at least on the profligate. The higher costs would be avoidable, more or less.

John Médaille Thursday, June 5, 2008 at 7:34:00 PM CDT  

@septeus7 (BTW, is that a redundancy?), I don't know why there isn't an electric car on the market. There is no technological bar. In fact, they were available at one time. See http://www.sonyclassics.com/whokilledtheelectriccar/

In a hydrogen- and solar-based economy, disbursed power generation will have a competitive advantage. I could not link to the second article; the URL was too long and got truncated. You might go to tinyurl.com and post the result.

Vi Friday, June 6, 2008 at 5:28:00 PM CDT  

John, just a quick question. If gasoline taxes supported city streets as well as highways, would you be for their extension?

Viking

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