TerraPass blog

Squeezed at the pump

Adam Stein | June 10, 2008

High gas prices encourage conservation, but also punish the poor. Climate change legislation needs to assist vulnerable communities.

 

Last week we noted — OK, gloated over — the demise of the Hummer and other environmentally unfriendly car models. This week, let’s acknowledge the very real human costs of high gas prices, particularly among the rural and poor:

Anthony Clark, a farm worker from Tchula, says he prays every night for lower gasoline prices. He recently decided not to fix his broken 1992 Chevrolet Astro van because he could not afford the fuel. Now he hires friends and family members to drive him around to buy food and medicine for his diabetic aunt, and his boss sends a van to pick him up for the 10-mile commute to work.

A trip from Tchula to the nearest sizable town about 15 minutes away can cost him $25 roundtrip — for the driving and the waiting. That is about 10 percent of what he makes in a week.

Incredibly depressing anecdotes aside — and the article contains plenty of them — the broader data paints a troubling picture. Nationally, gas prices are high, but they are below their historical peaks and the economy has mostly been able to absorb the run-up. This is particularly so in the Northeast, where incomes are higher, commutes shorter, and pubic transit better developed.

But due to a combination of poverty, low density, and aging car fleets, gas prices are hammering the rural poor. In Holmes County, Mississippi, residents spend 15.6% of their income on gas. In the long term, structural solutions to this problem will probably include the continued depopulation of rural areas and migration to urban centers. In the short term, people are just going to suffer.

This problem represents, at least in part, a policy failure. Climate change legislation will disproportionately affect vulnerable populations. Any equitable — and politically viable — solution will have to address these costs.

< Previous: Rewarding dumb growth    Next: Citizen lobbying in the UK >

Comments


  • 1.

    Try checking out the Drive $marter Challenge (www.drivesmarterchallenge.org). You can enter your specific vehicle data and figure out how much money you can save my taking six fuel-efficiency steps. They also provide other fuel-efficiency tips to help you save on gas costs.


    Reply
  • 2.

    This can't be good for the voluntary carbon offset market, either. Can't imagine someone voluntarily offsetting a $100 tank of gas. Certainly not in this economy. Which is why we need a carbon tax with income-tax rebates for low-income families.

    To your point, we visited this issue as well: http://www.maxgladwell.com/2008/06/high-gas-prices-and-the-ripple-effect/ One of the problems is that most of these same people (yes, we're generalizing by state) voted for Bush both times. It's just another example of how they voted against their own economic self interest in favor of misplaced ideology. Get a bike, get in shape, and get used to it.


    Reply
  • 3.

    @2

    Yeah, Max, another "reasonable" reason for Marxists to shift income without claiming they're Marxists. Green is Red. Green is Red. LOL

    Too bad the lot of you think we're all so stupid. It wastes your time. Which is a good thing.


    Reply
  • 4.

    example of how they voted against their own economic self interest in favor of misplaced ideology.

    Actually, shouldn't we be commending people who vote for what they believe is right, rather than which politician promises them the most other peoples' money? It is actually a bit disturbing that you believe that voting in your own narrow economic interest is the correct thing to do. That's how we have gotten where we are.

    Having grown up in, and still having most of my family in one of the yellow parts of the map, I would say things just aren't that bad. Five years ago, the people up there were the most energy-wasteful people imaginable...sixteen year old farmer's boys buying monster, old jacked-up F150s and hooting it up. They have also made changes far faster than my city-livng, educated friends and colleagues.


    Reply
  • 5.

    The goverment needs to increase the amount of food stamp money to be in sync with the cost of living. People who depend on food stamps each month to feed their families have found the purchasing power of the food stamps has decreased as the price of food has increased, which is directly related to the cost of gas. These very low income people are HUNGRY while the oil companies are making record profits. Where is the Government??? Oil companies should not be allowed to make record profits while people go hungry anywhere.


    Reply
  • 6.

    Accept it: anyone who voted for Reagan and the Bushes *is* stupid. Now we all have to deal with the consequences and work to set things right. If that includes reversing tax cuts for the richest 5% of Americans to ease the pain of the poor, so be it.


    Reply
  • 7.

    Accept it: anyone who voted for Reagan and the Bushes *is* stupid.

    If you believe that your political opponents are by-and-large stupid, evil, or greedy, the problem is that you haven't worked hard enough to understand them. Such laziness is the foundation of the partisanship that is gutting our political system.


    Reply
  • 8.

    Chad,
    You argue that people voting in favor of their own "narrow" economic interest is what got us here and that we should commend people that vote their conscience. However, Max made the statement that people are, for the most part, voting ideologically, not economically.

    Most people share economic interests with each other - I need food, clothing, GAS!, and would love to be able to save for my kids education. Not always true with their faith.

    As a society, we need to shift our thinking in terms of political leadership. This doesn't mean letting go of your "values". It simply means that perhaps you shouldn't vote for someone with bad economic policies just because he goes to your church.


    Reply
  • 9.

    The poor always suffer disproportionately and this is very unfortunate, of course. None-the-less we must take the long view which isn't just forcing gas prices down. Gas prices need to stay high to represent the true cost. People need to get used to walking and biking more. How about gov't. subsidies for one for people who buy bicycles? Or how about municiple grants for bike trails not to mention improved public transportation as a couple of examples.

    Regarding the political comments I fully agree that the current administration has unfortunately been very successful in distracting and dividing a huge portion of the electorate from the real economic interests of the majority of us as a global community. They have done this by dividing us along a series of social issues that pale in comparison to issues like global warming, economic dislocation and lack of affordable health care and also by cold-bloodedly manipulating our fears of terrorism so we willingly give up our civil liberties. I only hope that Nov. will bring a change for the better.


    Reply
  • 10.

    Accept it: anyone who voted for Reagan and the Bushes *is* stupid.

    I will tell you what, people who make statements like this are STUPID. They just continue to polarize the country. I grew up in the Chicago area and would likely be considered a yuppie yet I had the fortunate opportunity to work with many different people in the rural west. I have concluded that "rural folks" have very similar values and goals to people living in the city. They want to raise their kids, send them to college and see the country prosper. The statement above is the typical divisive labeling used by the republicans to win elections, demonize Democrates and divide the electorate. Richard, next time you see someone who is different from you or your friends maybe you could suspend judgment for a bit and actually get to know them.

    As to the article, I think the United States could learn a bit from other countries. In England people regularly walk, yes I said walk, to the store, pub, or their place on employment. We may even find that by driving less Americans stop having such a high rate of obesity. Certainly there are other options to owning a car and a bicycle is much cheaper to maintain. I am pretty certain that gasoline is not going to return to $0.98 a gallon


    Reply
  • 11.

    Dear Chad,

    Things aren't that bad? Where the hell have you been? I am insulted by your statement because I have felt first-hand the effects of this Bush economy. Was the administration lax on unregulated US banks? How about outsourcing? Was the "trickle-down" ideology/ tax cuts for the uber rich the most detrimental in history? Was it a coincidence that VP Cheney was the ex-CEO of a company that is reaping unheard of profits from an unnecessary war? What about "faith-based" initiatives and the illegal funding of churches and synagogues? Ever heard of the separation between church and state? Is there anyone out there that "sees" the connections? Or maybe, it just ain't that bad!


    Reply
  • 12.

    I just find it unfortunate that so many people are suffering because of the increase in gas prices and how that increases the price of food etc....

    I do agree that perhaps that will help to drive change in our society and perhaps that is the positive to come out of all of this. However, living in one of the largest cities on the west coast and seeing how the city, state and federal government continue to hold up our road improvements and fail to provide a true mass transit system I have to believe the government has more responsibility to help correct this and 'ease the pain.' I think it is unfortunate that people have to choose between paying for gas and feeding their families when the infrastructure really does not allow many other options for getting around. Of course people can always walk or bike but in some instances that is not an option- if you have to live 15-30 miles outside of the city to be able to afford housing the best solution for you is some kind of viable mass transit.

    On a separate note I find all of these comments very interesting and I thank you all- even the comments I don't agree with but you all gave me something to think about and gave me another perspective. Knowing we will never see prices of anything where they once were I am just hopeful that we start to see some change that will help those struggling in our country to be able to provide what they need to their families


    Reply
  • 13.

    Phillip: you are already paying a carbon tax, my friend. But you are paying it to hostile foreign governments who take those taxes that we Americans pay to them and proceed to buy American assets like banks. If we Americans had properly taxed fuel, then we'd reduce demand, which would keep the price of oil down and spur investment from the private sector to develop alternatives that (a) pollute less and (b) reduce our dependence on foreign oil. We'd send less of our money to the Saudis, Putin, Chavez and even Canada; we'd be a more secure nation, and that money could be used for America. Your leaders have failed you. I'm a capitalist and believe in the free market. Economics can be a tremendous force of good and evil. It's government's role to play referee. An unchecked free market will destroy itself.

    I don't see how a carbon tax on fuel that is used to dampen demand and that is reinvested in alternatives to make us less dependent on foreign oil amounts to a redistribution of wealth. Those tax dollars would go to entrepreneurs to develop new fuel and transportation technologies, which could also become exports. It would create wealth, which is a good thing. The only way poor people would benefit is by having access to more jobs and more affordable energy. No one is advocating handouts.

    But you probably hadn't thought that through. You see "tax" and automatically make preconceived assumptions.


    Reply
  • 14.

    Chad: The poor who voted for Bush voted against their own health and wellbeing. They voted against the education of their children. They voted for huge tax breaks for the rich, for corporate welfare programs, and for pollution that is literally killing them. They voted for a war, where the burden of deaths and casualties are disproportionately borne by the poor. If they think that is "right" then they are irrational and should be committed. It's self-destructive behavior. Unfortunately, they're getting exactly what they (unwittingly) voted for. So it's tough to sympathize with their current situation.

    Rational behavior dictates that you make choices in your own self interest. Ethical behavior dictates that you do no harm to others. A poor person voting for Bush (with the benefit of hindsight) went against each of these principles. There is nothing commendable about that. They had a choice and made the wrong one. Now they're being penalized. Just b/c your friends are doing OK and making changes doesn't mean everyone else is. The poor are suffering worse than they already were.

    The poor didn't vote against taxes, btw. That's why the rich voted for Bush. The poor voted for Bush over social issues. They let ideology trump economic self interest i.e. their own survival. Unfortunately, you can't fill a tank with ideology.


    Reply
  • 15.

    Less income tax, more gas/energy tax and make it balance, especially for the poor.

    the effect:
    makes employing someone cheaper => creates jobs.
    makes driving expensive => distant malls and mega markets more expensive and local, walkable stores preportionally cheaper encouraging walking, talking, tighter communities, creating local jobs.

    Imagine no income tax, just energy tax.
    Aaah, what a fabulous thought.
    The incentive to invent.
    Am I dreaming?


    Reply
  • 16.

    It is a shame that it has come to this. However, I must say that we as a nation have proven ourselves stupid beyond belief. The situation we're in today was highly foreseeable as far back as 1973.

    We did nothing.

    People funded by the oil rich nations of the world flew planes into our buildings. We sent our children to die fighting for oil.

    And, we bought SUVs.

    All the signs were there for the reading. We knew what was coming. Carter put solar cells on the whitehouse because he saw the obvious.

    Reagan took them down.

    We will now have a lot of pain ahead of us as we adjust to new oil prices and to the reality of climate change.

    However, high fuel prices are the only think that will get "we the idiots" to change our behavior. And so, high prices are necessary and overall a good thing, despite the pain we feel today.

    The longer we wait for real action, the worse the pain will be. At present, we're playing with global civilizational collapse and possible human extinction from climate change.

    Let's keep the big picture in sight for a change.


    Reply
  • 17.

    We already have a huge carbon tax in the US, also know as the US military and foreign aid budgets, the largest part of which goes directly to support wars and foreign governments in the Middle East in order to protect our oil supplies. Let's just shift the use of this tax to efficiency and renewables. There's no added cost: we just have to give up our war habit and spend this money instead on efficiency and renewables and to retrain returning soldiers in green technologies.


    Reply
  • 18.

    Why should anyone subsidize the poor habits of others? Want gas to be a lower price? Don't buy all your food and clothing from far away locations that have to be transported 1000s of miles in order for you to buy it in your 4 door sedan you leave idling. Personal driving habits are NOTHING compared to the amount of energy used by transporting goods. Pay a little more for your t-shirt, support a local farmer, maybe you wont have to pay so much for gas.


    Reply
  • 19.

    Wow. The thread of comments here is filled with some very strong statements and generalizations, and anger.

    There is much reason for anger, but we should try to respect the (mostly) well-meaning people who post comments (and do our best to ignore the ones who are obviously not well-meaning).

    If we cannot work together, despite differing views, we will continue to suffer the consequences of what Adam's post addressed.

    The way I see it, there are two courses we can take.

    The current course over the last 20+ years has been mainly to do nothing. This might have been purposeful, or just because we weren't able to agree that there was a problem, or agree on steps to solve it. The outcome: we are arriving at a very inequitable, unstable and unfavorable position for our country and its citizens.

    The alternative course of action is to enact a directed solution. For example, there are a large number of ways to assign a cost to carbon and other greenhouse gasses (something those of us buying TerraPasses have been doing voluntarily). There are a number of other directions we can also take.

    The immediate result of a directed solution might be the same as our current situation in some ways: gasoline and other fossil fuel prices will be high. However in the directed course, we can make decisions that coordinate economic change with appropriate fiscal policies that offset the impacts of these changes 1) to the people that most need the help, and 2) in a way that does not create an incentive to continue doing a bad thing.

    The difference between the first course and the second course is that when we make policy decisions, even if they are difficult, we are in control (or at least not totally out of control!). Doing nothing just leaves us at the mercy of everyone else.

    And so, we are now left with many people negatively affected, and as usual, the people least able to make adjustments or otherwise mitigate the impact. And by "negatively affected" I mean they will have no job, little money, and will fall into poverty. Yeah, that's not "inconvenient", it's terrible in almost all ways.

    We have long since missed the opportunity to make policy changes that would have had minimal immediate social costs. Yet now, it's harder to do the right thing.

    There is great demand to "do something" to "fix" high gas prices. Witness the recent proposals to reduce the gas tax. Such a change is inequitable, and creates the opposite incentive than what is needed.

    There is no immediate, broad solution to the problems faced by people whose only option for work requires a long drive in an inefficient car. Some will suffer, a few will suffer a great deal. This is the cost of our inaction over the last few decades.

    Yet we still need to make difficult changes to reverse our course. In fact, we need to make probably unpopular policy changes now more than ever. I see no reason that things will get better if we just do nothing for a little longer.

    So I respectfully urge the people writing comments here to turn our energies away from undermining others' positions or opinions. Instead, let's try to find and support whatever constructive changes we can make now that will help us solve our energy and climate woes.

    Tom


    Reply
  • 20.

    Tom,

    Very well written post. Among the other things we can do is take the advice not only of climate scientists, but also of Nobel Prize Winning economists that have banded together to recommend strong action on climate change. They have stated in no uncertain terms that strong action on climate change is a sound economic investment earning a 10 to 1 return.

    http://tinyurl.com/6qamem


    Reply
  • 21.

    Partisan grievances won't solve our energy problems. And while it now appears we should have been taxing gasoline at a higher rate for years, it's worth contemplating how the "summer gas tax holiday" discussion would have played out if the $4/gallon pump price had included $1.80/gal. of federal tax, instead of $0.18/gal.

    As a long-time supporter of cap and trade for greenhouse gas emissions, I'm glad to see we are finally getting around to talking about where all the money it will raise should go. That's a signpost of progress, by itself. How we spend it could have a bigger impact on the economy than the cost it would add to energy consumption and energy-intensive goods.


    Reply
  • 22.

    I am sorry if I got a bit ornery a bit earlier: that happens when people call most of your family stupid.

    The current economic issue is not Bush's fault. It is the result of two issues, rising gas prices and the housing bubble, both of which have roots clear back in the 1970s and have grown worse through both Republican and Democratic administrations and congresses. Our ludicrous monetary policies of the last few decades not only built the housing bubble, but leveraged us to the hilt. Now all those green peices of paper we printed and sent overseas are coming back to us, pummelling the dollar and driving prices for all commodaties up. Combined with its supply/demand issues, and oil has gone up even more.

    We have been living well beyond our means for over thirty years. We are now paying for our lavish ways (or in my case, paying for my parents' lavish ways).


    Reply
  • 23.

    I love the personal attacks by those who try using labels on folks who may have voted against their guy.

    I voted for Bush, both of the, and for Reagan. Why? It was in my best interest.

    Personally, I think the role of the federal government is very small. It is namely national defense, foreign policy and to run the federal judiciary. Nothing more.

    I thought (and have been disappointed) that federal government seems to expand, not get smaller.

    The problem is that too many people have been conditioned to believe these are issues the federal government can and SHOULD solve.

    They can't solve it. It's not their issue. It's an issue with the citizens. It's the folks buy the large SUV's and pickups and driving around with one person in the vehicle, the driver.

    The best thing to do is to get the government out of the picture all together. Let the market fix it.

    While we all say we want clean energy, and these other things, few are willing to pay for it. The cleaner sources are either more costly, or people are not currently willing to invest their time in alternative means and technologies.

    For example, a one-hour by car trip to the airport is 3 hours if I hike to the nearest bus stop and take public transportation, using the planner provided by my local public transportation system.

    That extra two hours just to get there (and another to get back) is far more valuable than the $14 I'll spend to drive my 14 year old sedan that costs less than $0.13/mile to drive, including the purchase of the vehicle, maintenance, repairs, insurance, license, tax, and of course, fuel.

    The thing is, I've done the math (which will probably shock the person who alleges that voting for Bush is the mark of stupidity) and currently, looking at taking care of my family, the best course of action is to keep using what we are currently using. Nothing is cheaper!

    So I keep driving my sedan with the 222K miles on the clock, and laugh at the folks wringing their hands about the crisis.

    Folks chose to buy SUV's. So let them live with the consequences.

    Gas is still the cheapest form of energy to get around, so until there is a cheaper solution, either by a new technology that is cheaper than gasoline/diesel, or because the market has raised the prices of those fuels to a level that diminishes their competitive edge, we'll keep using carbon based fuels.

    The solution isn't for the government to play with the prices by taxing the behavior some say they don't want. The solution is for someone who really believes there is a better way to stop just talking about it and put their better way on the market.

    Without subsidy.
    Without higher taxes on competing products such as existing carbon based fuel.
    Without taxing vehicles or any other changes.

    The technology needs to make it in the market place without artificial support in the form of government action.

    If you want to talk sustainable, it's not just the fuel, but also economic policy. Taxing fuels to give other technologies a chance is no more sustainable than expecting to use carbon based fuels forever.


    Reply
  • 24.

    Tony, I would disagree with you on a few points:

    1: The government has more responsibilities than what you mentioned, even in a strict libertarian view. Most relevant among them in this community's context is management of publically-owned property. Some things just CAN'T be privatized, no matter how much you wish that to be true. Many aspects of the environment, particularly the air and oceans, fall into this scenario.

    2: Driving is only "cheaper" because of the heavy subsidies that are bestowed upon it. In particular, the roads you are driving on and the free publically-owned garbage dump for your waste products amount to an enormous subsidy. Renewables either need offsetting subsidies, or better yet, all subsidies need to be eliminated for both sides - which means a tax on gasoline sufficient to pay for all roads, and pay for the damage caused by all the pollution coming out your tailpipe. Driving won't be so cheap anymore.


    Reply
  • 25.

    Tony: I respect the fact that you vote for Republicans because it's in your economic self interest. Unfortunately, when the Republicans get into power, they expand government. So I'm guessing you're more of a Libertarian. But unregulated markets end up destroying themselves. The recent mortgage and credit crises are prime examples. These markets had zero regulation. They were driven by greed, which can be good with regulation, and now everyone pays.

    Should the meat, pharmaceutical, and auto industries go unregulated? I'm no fan of bureaucracies, but there's a balance of inefficiency and public good.


    Reply
  • 26.

    Tony: Also don't forget the indirect subsidies the taxpayers pick up in the form of the U.S. military securing our supply of oil. Modest estimates place this at about $1/gallon. And that doesn't include the $$ spent on the Iraq adventure, which was entirely driven by oil and yet had the adverse effect of driving up the price.


    Reply
  • 27.

    Max: First, to say any industry in the US has "zero" regulation is simply wrong. There are miles of red-tape for everyone. You are also failing to admit the deep role that government fiscal policy and subsidies had in this fiasco. All the "bailouts" of companies and individuals who screwed up are among those.

    The cost to "secure our oil" is a made-up number, as it requires knowing how much small our military would be if we magically didn't need imported oil. That question comes down to pure hand-waving, and the cost may very well be zero. In other words, our military could be just as big and expensive even if we could supply 100% of our oil. Most of our oil comes from N. America, where it is pretty obvious that the military has nothing to do with it.


    Reply
  • 28.

    I probably am more libertarian, that would be true. Yet it seems with my set of values, there is a better chance to get my agenda on the table with the GOP. Maybe that will change.

    If someone read that I'm for privatizing most everything, that wasn't what I said. I simply think that the role of the federal government needs to drastically shrink. If citizens want the government to manage things for them, then let's keep that at the state and local level.

    There is no good reason to send trillions of dollars to Washington DC to have them redistributed back to the states based on often little more than the direction of the political winds.

    The longer the path, the more opportunity for tax dollars to leak away as waste and fraud. If there is waste and fraud, I want it to be local, and not consolidated in DC :smile:

    But things will not change as long as folks want government subsidies and think the role of the government is to redistribute wealth in an effort to make things fair.

    Fair is not saying such and so family makes too much money, so we can tax them more to pay for others who don't make as much. What is fair about that?

    I'm not saying we shouldn't help those who suffer during disasters, such as Katrina. What I'm saying is if folks chose to goof off in school, take drugs, get pregnant instead of getting an education, staying clean and sober, and waiting until they are married to engage in behavior known to produce children, why should those who made the decisions to work towards their future pay for those who made other decisions.

    If we are against bailing out the banks (which I was) they why not be consistent and not expect the government to bail out these folks too?

    And I agree, the mortgage "crisis" let the folks who made the bad loans bail themselves out. That too is not the role of the federal government.

    States already spend state fuel tax revenue on things other than road building, maintenance and repairs, so I would be pleased if we could just get the current taxes to be used for maintaining the road infrastructure and let public transit be self sufficient. (And I'm a user of public transit, BTW, I just drive to the train station.) So I don't think the argument that the existing infrastructure is free is a sound argument. First, fuel tax revenues don't all make it into roads and bridges budgets, so fuel taxes have already subsidized other areas of government. Second, any sort of transportation appliance will need roads and bridges, so the road network is available to any vehicle that is designed in the same form factor as current, carbon based fueled vehicles.

    I'm not against government, I'm against wealth transfer and higher taxes on those who earn more. I realize that we need health and safety regulations. Simply build them into the prices of the goods.

    I also realize what it is like to be poor, growing up in my own rural single parent home, and working my own way through college, not expecting mom to pay my way.

    For example, the FDA would be paid for entirely by taxes placed on food and drugs. Same thing for the FAA. Those who fly will pay for the FAA. So if you and I buy a plane ticket, or ship a package by air, we are the ones and the only ones paying for the government we "want" to protect our health and safety.

    If we "subsidize" government operations by taxing something unpopular like cigarettes and use that money to pay for other things, we don't really know if the citizens want that because just like the arguments about the "real" price for fuel, we need to reflect the real price of government for those who "want" government services.

    I don't believe all aspects of government can be adapted to the market mechanism. However, I do believe much of it can.

    For example, if a person or firm believes that if there is an environmental accident and the government will bail them out, and/or clean up the mess if they go bankrupt, what incentive is there for them to practice good stewardship over their operation? There is little if any other than perhaps the perceived PR value of being able to advertise they are "green."

    I don't even know if we can change the way people think. By making things the role of the government, we have generations of folks who think they are entitled to a way of life with little personal responsibility.

    The entitlement mentality is not just one held by the poor who many chide for waiting for the welfare check.

    This mentality is also shared by those who sit and say the government should do something about gas prices, about carbon emissions, about this thing or that thing.

    That is the very same thinking as those who think the government should hand out a check, or bail out their bank, or do whatever.

    Part of the solution is not more government, but less government. Because more government will simply breed more folks who think that they are not responsible for the outcome, but the government is responsible for the outcome.

    So I don't know where that puts me. Probably still more libertarian than republican.

    I do know that I'm pretty far to the right, socially as well as fiscally and with respect to foreign policy and the role of the judiciary.

    I think folks need to be responsible for their own choices and I believe that further government programs simply remove responsibility from the citizens and with something such as the current issues surrounding carbon based fuels, the last thing we need is any more removal of responsibility from those who use those fuels.

    To subsidize other fuels will simply perpetuate the entitlement mindset that has gotten us to where we are today.

    So I believe one of the key first steps is to stop presenting government as a provider of money and solutions.


    Reply
  • 29.

    @Tony Bright -- I don't entirely agree with your points (I kind of think of myself as a "reformed Libertarian" :-) but still generally agree that the government is about the least efficient and effective ways of getting something done.

    Nevertheless, there are still a few things that even the priest of free market economy, Milton Friedman, agrees that there is a limited role for government as Chad mentioned. In particular, the major economic role of government was to find externalities and asses a cost (tax) to them such that resources would be redistributed efficiently.

    (Externalities are costs that the producer creates, but does not pay for. Back in the innocent 70's, the canonical example was pollution. I run my car, but I pay little is any of the cost of polluting the air).

    In the current case, almost a poster-child of this hypothesis, any of the various proposals for recognizing the cost of carbon and bringing that cost to bear upon the producer will accomplish the goal of internalizing the externality.

    I think we need to accept that government has a role to play in working out the cost of emissions. Whether they do it through simple means like taxation or more complicated plans that also attempt to address equity (fairness) is a good argument.

    Anyway, thanks for raising this thread up to the level of intelligent conversation again!

    Tom


    Reply
  • 30.

    Finding externalities is one thing. Spreading the costs to all of society, instead of charging ONLY those who are responsible for producing those costs is another. At the far end of the spectrum is the practice of charging even more to subsidize the costs of other activities. I.E. charging higher fuel taxes, but not using those funds to actually build roads, repair the ones we currently have, etc.

    The problem is often how we subjectively view "fair."

    I cringe when I hear someone say things like "excessive profits" or A-Rod makes too much money as a ball player.

    If you don't like it, then stop buying fuel and baseball tickets, or invest if you think there are excessive profits. (You'll learn oil still has one of the lowest profit margins, it's a capital intensive business.)

    Plus, we all know that any costs that we place on the producers ultimately get paid by the consumers, so why not just be honest and tell the folks that what is being proposed is to make carbon based fuels more expensive for them?

    It's not presented that way because it's not politically popular. The oil companies are the boogy man, so taxing them is "popular" But no one is telling the whole truth about taxes on producers which is they are ultimately passed on to consumers both directly and indirectly. The cost of their fuel rises as well as the costs of other goods and services as the energy components of bringing that product to the market place also rises.

    So why not just be honest and say we want to raise the price of fuel and not hide behind taxing big oil, as some have suggested? If it's such a good idea, it should be able to stand in the market place of ideas without the false posturing.


    Reply
  • 31.

    Tony Bright writes: "The best thing to do is to get the government out of the picture all together. Let the market fix it".

    Well, boys and girls, the market will fix it, alright. Down here in sunny Orlando, FL, we have been awaiting for a commuter rail to be "approved" (not even begun)for so long that the conversation sparks a cynical chuckle from long-time residents. It seems to be closer than ever (it finally took $4.00/ gallon gas to get this moving) but it is stuck in negotiations.

    Why? I dunno...ah, maybe because car dealers, gas stations, beer and cigarett companies, auto parts retailers, used cars and parts dealers would go under. It's the "behind-the-scene market" that troubles me.

    This from a town with DISNEY in it. A commuter rail would provide Disney's $8-an-hour (average wage) workers with a cheaper transportation alternative. We have a state-of-the-art Simpsons ride but no commuter rail.


    Reply
  • 32.

    Tony: I think we'd actually agree on a lot. It's a matter of government playing an effective role that works for everyone and that is fair. But even if you weren't in favor of the bank bailout, it happened. And it happened b/c the the fallout would have been catastrophic. The gov't bailout was the lesser of those two evils. Fortune said it best: "Ya gotta love it. Private profits, socialized losses." That's the reality. And it was precisely a function of the free market.

    Unfortunately, though, this gives the far left an excellent case for regulation and redistribution of wealth. I'm very much a centrist. The problem with extremes is that they result in pendulum swings. We've had 8 years of extreme right policy (not that it resulted in shrinking gov't or fiscal responsibility). Now, the momentum of the country is headed in the other direction and will tend to swing equally in the opposite direction. That's not good for anyone, and I hope cooler heads (Obama) will prevail. Obama may have a lot of liberal supporters, but I think he's a very reasonable centrist. So is McCain for the most part. Both are pandering to a degree. I just think Obama will better for the country and the world.

    For as long as any of us can remember, we've had sin taxes. We've taxed alcohol, tobacco, gambling, etc. in part b/c they have a tendency to do harm. As it turns out, fossil fuels are harming us at a far greater rate than any of those other sins. We're at war. They pollute our air and water. They compromise our national security. And they are the cause of global warming. Some may part with me on the latter, but the former are still cause enough to place a significant sin tax on them. There is a price to be paid for our addiction to oil, one that we've been mortgaging for the past 50 years. As painful as it may be, it's time to pay up. This is precisely the market mechanism that will make clean, secure, domestically produced energy viable. No need for subsidies. Just put a tax on the stuff that's killing us.

    The problem is that, unlike booze, energy is a necessity. So when you tax it, those taxes have an unfair effect on those who earn below a certain level b/c the cost of energy makes up a much larger part of their income. And I see from what you've said that you value fairness. So these folks should get an income tax break to keep it fair. In fact, the libertarians who advocate for a pure consumption tax (abolishing the IRS) make provisions like these for the poor, as well, to make it fair.

    On redistribution of the wealth, it doesn't work and never has or will. However, government can invest in its people to educate and train them to be more productive. After all, companies need bright, talented workers in order to generate wealth for themselves. The private sector does play a role in this, and we see it more and more as companies like Microsoft and Intel get involved with public schools. It's in their interest to make sure they have a qualified workforce. And it's in everyone's interest if everyone has opportunities to be productive citizens, even if they've made mistakes as teenagers. No handouts. Opportunities.


    Reply
  • 33.

    ernesto,

    While I "feel your pain" regarding no public transit, until the circumstances are such that it could break even, or gasp, even make a profit, there is little incentive to do this.

    If there was sufficient demand at a profitable price point, someone would step in and propose such a business venture.

    Since there isn't, it hasn't happened.

    Maybe at $4/gallon for gas, or at $8/gallon for gas, more folks will be looking for such a solution. Until then, it's a government subsidy to offer public transportation.

    As far as Obama is concerned, I really don't know what he would do. Change is such a meaningless term that really he is promising nothing concrete.

    Maybe that's good. But frankly, I don't even know.

    My thoughts on the war are that none of us really know the reasons we are there. I don't think it's all about oil or all about regime change. Personally, I think we have planted a lightning rod in the Middle East. But the president cannot say that because it would blow the mission for those guys and gals serving overseas.

    Having troops there makes a tempting target for those who want to see the West destroyed.

    But if the president ever got up and just said that, that the troops were there to "draw the fire" of those who hate us, instead of waiting for them to fly more planes into buildings or whatever they might be planning next, the whole nation would likely cry out.

    So, we make up a story about regime change (which I believe was in order) and send the troops to draw the fire of those who would just love to kill you and me as we watch our children playing soccer in the sportspark.

    However, as a former military officer, I also know this is a strategy that is fraught with peril. Because sometimes our soldiers are not so well behaved, and often the hearts and minds the are trying to win over are trampled on by a few bad apples.

    Well, I'm way off course now, LOL, so I'll sign off for a bit.


    Reply

The comments section is now closed.


AddThis Feed Button
CATEGORIES

Conservation tips
News
Politics
Science & Technology
Society
TerraPass Answers