The lunacy never ends:

Link (http://www.foxnews.com/story/0,2933,364846,00.html)

The government cannot set prices for a commodity (without violating property rights, causing shortages, etc.), so ANY tax increase by ANY name will be passed through to the consumer.

http://www.nytimes.com/2008/05/28/opinion/28friedman.html?ex=1369713600&en=2d8ea931b2ec4211&ei=5124&partner=permalink&exprod=permalink

I am stunned by anyone begging for more taxes - of course, he adds the caveat that "the poor", who make $79,000 or less per year, get an income tax deducation - more progressive taxation to punish wealth creators and reward wealth consumers.

You needn't fool with any tax system at this point. Energy prices are high enough that any / all renewables are feasible. Now, it's just a matter of time for those alternatives to become widely available.

Raise gas prices as high as you can. I support high gas prices. Eventually we will stop buying it. The higher gas goes the more affordable the United State's own high technology becomes.

Joshua,

I agree we need to maintain the $4.00 cost of gas. But every gallon we take out of the ground is one less gallon for the coming genertions. We shouldn't reward people with a refund for buying gas. That's the wrong message. The excess money should be used for efficient alternative energy research or a subsidy for "zero oil" vehicles like E-REVs.

We could start by drafting a letter from this forum. Something that is based on a consensus. Can we get a consensus with guys like JMH?:) What do you guys think about this idea?

... more progressive taxation to punish wealth creators and reward wealth consumers
Jason, I'm not sure I understand what the difference between a 'wealth creator' and a 'wealth consumer' is, could you explain it to me?
If my question seems stupid, then I apologize in advance; I can be quite dense at times.

Jason, I'm not sure I understand what the difference between a wealth creator and a wealth consumer is, could you explain it to me?
If my question seems stupid, then I apologize in advance; I can be quite dense at times.

A wealth creator is someone whose productivity generates real wealth, real value - water, energy, agriculture / food, housing, textiles (essentials, not accessory), manufacturing, transportation, etc. - also education / training (only for aforementioned trades), healthcare, safety / security, etc. A wealth consumer is someone who doesn't contribute to anything listed above, creating things that are merely entertaining, recreational, comfort or luxury - or not doing anything at all, or doing things that are disruptive or destructive.

I don't like using old terms like "productivity", because it includes so many useless endevours, which still earn money, but ultimately lessons the wealth in a nation.

A wealth creator is someone whose productivity generates real wealth, real value - water, energy, agriculture / food, housing, textiles (essentials, not accessory), manufacturing, transportation, etc. - also education / training (only for aforementioned trades), healthcare, safety / security, etc. A wealth consumer is someone who doesn't contribute to anything listed above, creating things that are merely entertaining, recreational, comfort or luxury - or not doing anything at all, or doing things that are disruptive or destructive.


I get it now. By your definitions, a "weath creator" would be a working American who actually makes things. And a "wealth consumer" would be one who makes nothing but wastes resources (oil) on yachts and private airplanes.

I get it now. By your definitions, a "weath creator" would be a working American who actually makes things. And a "wealth consumer" would be one who makes nothing but wastes resources (oil) on yachts and private airplanes.

If the individual is only consuming the wealth that he / she created to purchase and operate yachts, private airplanes, etc., then it may be deemed excessive or wasteful, but that does not make them a wealth consumer, as the net balance is positive.

There are a rare few individuals, like myself, who through vision, planning and execution, can cause many multiple times the wealth creation from an organization, than anyone else can. Those visionaries have EARNED that increase in wealth, and deserve a disproportional amount of that wealth, relative to anyone else in that organization, because, even after succeeding, that organization cannot maintain the same level of wealth creation without such a visionary.

If the visionary then wants to consume that EARNED wealth on luxury items, that's fine, as they are allowing others to at least EARN their daily bread. Moreover, I wouldn't necessarily classify yachts and private jets purely wasteful, as the wealthy provide an essential function to an economy as early adopters. They will pay a premium to be the first to enjoy new advances in automobile, maritime and aviation products, allowing those products to be cost reduced, so that others can enjoy them years later at a very cheap price.

The real waste is in industries that create complete non-essentials, like all the worthless knick-knacks you see in the Cracker Barrel, that serve absolutely no function other than to "decorate" an empty home / life.

ADDED:

The development and sale of personal aviation and maritime craft actually benefits our industries which also supply our government with security craft. Many of the instruments developed for the personal craft now make their way into police, national guard, coast guard and military craft. It used to be the other way around, but more progress is now made for private interests, as they don't put as many hurdles in the way.

Raise gas prices as high as you can. I support high gas prices. Eventually we will stop buying it. The higher gas goes the more affordable the United State's own high technology becomes.

This line of thinking just floors me. Those who advocate sustained high gas prices are basically saying this; "Let's sacrifice the US economy and an entire generation of Americans in the hopes that something better can come of it in 10, 20, or 30 years." What a selfish destructive thing to propose!

Current $4 gasoline is already destroying the lives of millions of lower and middle income families. There is no alternative for many of these families than to buy the gas to get to work. They don't have any viable alternatives available. There are no vehicles available today that don't use petrolium. They own homes far from their jobs. They own vehicles, often not paid for, that are eating them alive because they are feeding the greedy oil companies and speculators. America has spent the past 70 years building a society that is dependant on gasoline to function. Now voices arise proposing that $4, $5, or even $6 gas would be a good thing for America? HOW DUMB! What we need to do is this:

* Do everything possible to reduce the price of gas to an economically sustainable level.

* Raise the CAFE mileage as high as practicle to reduce the number of SUV's and huge pickups being built.

* Give auto makers good long-term tax insentives to build vehicles that exceed CAFE standards.

* Pump Government R&D money into battery, fuel cell, and alternative fuels research.

* Offer permanent and significant tax insentives to individuals who buy alternative fuel vehicles.

* Last but not least, address market conditions by finding a way to return to long term contracts for oil and eliminate the free-wheeling oil markets.

If we do nothing as a nation to address this we will not just see some pain at the pump, we will see an economic depression worse than that of the 1930's. We're already beginning to see stagflation raise its ugly head. The last time we saw this was in the early 1980's. that was the last time that oil markets went nuts. It's time to understand one very important thing: Todays worlds monitary systems are based on the value of oil. The dollar is backed by nothing other than oil. If we allow oil prices to go out of control we are in effect dooming the Dollar to huge inflationary pressures.

So much for my rant. But I'm an old guy. I've seen this before. In 1973 we had our first wake up call and we did nothing. This may be our second and last wake up call. But it will take massive effort to sustain our current civilization while we work toward an oil free future. To propose sacrificing our economny and our infrastructure to get there is in my mind lunacy. Too many familes, mine included, have built a life based on transportation that is petrolium depandent. We have built homes, bought cars, SUV's, motor homes, boats, and other equipment that need to be fueled by gas and diesel. So how can anyone think that $4 gas is a good thing for the America we have today?

The argument Friedman is making in the previously mentioned column is that high gas prices promote investment in energy alternatives, and unless the prices are permanent and predictable, we will never reach permanent and predictable energy independence.

Here's some other columns, approaching the gas price issue from a global perspective:
http://select.nytimes.com/2006/04/28/opinion/28friedman.html

http://select.nytimes.com/2006/03/01/opinion/01friedman.html

http://www.nytimes.com/2004/10/07/opinion/07friedman.html

This one is a classic:
http://select.nytimes.com/2006/05/31/opinion/31friedman.html
(GM actually responded to this on their corporate blog .. amazing to see how much GM has changed in the intervening two years .. GM is now advertising the Volt on the New York Times website)

What we need to do is this:

* Do everything possible to reduce the price of gas to an economically sustainable level.

I believe our current pursuit of every alternative conceivible is getting us there, it will just take a long time.


* Raise the CAFE mileage as high as practicle to reduce the number of SUV's and huge pickups being built.

This was already done in 2007, so let's not move the goal posts on the corporations that have already put their business plans in motion. I don't even recommend Congress add higher requirements for the years beyond what the 2007 CAFE standards have defined, as no one knows what the world will be like in those years. No subsequent CAFE standards should be defined until we get within 5 years of the final mileage increase, and get input from the automakers, oil companies, agriculture industry, electric companies, etc.[/quote]


* Give auto makers good long-term tax insentives to build vehicles that exceed CAFE standards.

I prefer that consumers are given the tax incentives, so that they choose the winners, not the government.


* Pump Government R&D money into battery, fuel cell, and alternative fuels research.

The only problem with this, is that the government tries to pick the winners, and they overly subsidize the wrong tech, hurting the more viable options consumers desire.


* Offer permanent and significant tax insentives to individuals who buy alternative fuel vehicles.

I like this, as long as the incentive "decays" with time, so that manufacturers keep developing cheaper and cheaper products, instead of building out a manufacturing base dependent upon the subsidy.


* Last but not least, address market conditions by finding a way to return to long term contracts for oil and eliminate the free-wheeling oil markets.

I rather like a little speculation in markets, which duly punish poor government policies.


If we do nothing as a nation to address this we will not just see some pain at the pump, we will see an economic depression worse than that of the 1930's. We're already beginning to see stagflation raise its ugly head. The last time we saw this was in the early 1980's. that was the last time that oil markets went nuts. It's time to understand one very important thing: Todays worlds monitary systems are based on the value of oil. The dollar is backed by nothing other than oil. If we allow oil prices to go out of control we are in effect dooming the Dollar to huge inflationary pressures.

I think that you are dead right that we could fall into a steep recession, if not full depression, if the governments fail to respond correctly to the current water, energy and transportation crises. I believe the collapsing housing market is but a symptom of the aforementioned crises, and is quickly nearing a floor, unless the government somehow makes the situation worse.[/QUOTE]

This line of thinking just floors me. Those who advocate sustained high gas prices are basically saying this; "Let's sacrifice the US economy and an entire generation of Americans in the hopes that something better can come of it in 10, 20, or 30 years."

This is not what I am saying. This is basically what I am saying:

"The US economy is a mess due to many different events unrelated to gasoline prices. Gasoline prices are just adding insult to injury and will continue to, possibly making the economic situtation even worse. I believe that the most important issue facing us today is our complete reliance on oil for transportation. I also believe that making a huge effort to convert our transportation with today's technology (akin to a WWII effort) will be the only way to boost our economy."

High energy prices are here to stay until we have a lot of alternatives. We can if we have the will power to, change over a lot of our transportation to alternatives within 2-4 years and almost completly in 10 years.

How can anyone think that $4 gas is a good thing for the America we have today?
This line of thinking just floors me. Those who advocate sustained high gas prices are basically saying this; "Let's sacrifice the US economy and an entire generation of Americans in the hopes that something better can come of it in 10, 20, or 30 years." What a selfish destructive thing to propose!
A philosophy or viewpoint such as this is not so draconian or selfish as one might expect.
I understand what you're saying Pennor1, we need a more immediate solution.

In 1985, the U.S. was headed in the direction of high fuel prices.
This began a push by science & industry to increase fuel efficiency and explore alternative forms of energy.
The Saudi's (OPEC) saw the writing on the wall, and in response lowered the price of oil. In the words of Frank J. Gaffney Jr "they kept the junkie hooked up".
This is no longer a viable solution for OPEC, due to demand.

A need or problem encourages creative efforts to meet the need, or solve the problem...

Necessity is the mother of invention.

Necessity is the mother of invention

Isn't it interesting how that phrase is uniquely American?

It seems that in most other cultures, when circumstances change, most cultures flee or just accept the new circumstances, but Americans just won't compromise their way of life. Americans are unique in their "can do" attitudes, and directly confront the issues presented to them. Europe has tolerated high fuel prices for decades, but they haven't lifted a finger to combat it, they just accept smaller and smaller cars. Americans experience high gas prices, and immediately pursue ethanol, electric, hydrogen, as well as other renewables such as solar PV / thermal, wind, hydrokinetic, etc., to support electric / hydrogen.

Europe has tolerated high fuel prices for decades, but they haven't lifted a finger to combat it, they just accept smaller and smaller cars.

One could also say that Europe is more energy independant now than they would have been without high gas prices - that their economies now make more efficient use of oil. In the UK, 65% of the petrol price at the pump is tax, compared with 77% in the year 2000. This makes them more immune to oil price fluctuations.

Isn't it interesting how that phrase is uniquely American?
Actually this phrase appears in the dialogue Republic by the ancient Greek philosopher Plato (428B.C.~347B.C.)
Its actually uniquely Greek, like Ouzo.

One could also say that Europe is more energy independant now than they would have been without high gas prices - that their economies now make more efficient use of oil. In the UK, 65% of the petrol price at the pump is tax, compared with 77% in the year 2000. This makes them more immune to oil price fluctuations.

... but they aren't independent of oil, whereas the US is working towards complete energy independence. I wouldn't call the Europeans more efficient - they are more subsistent, which is a dangerous position, as any disruption would cause severe hardship. Prices may not hurt them, but shortages certainly will.

Actually this phrase appears in the dialogue Republic by the ancient Greek philosopher Plato (428B.C.~347B.C.)
Its actually uniquely Greek, like Ouzo.

... but no culture lives and breathes it as America does.

...but no culture lives and breathes it as America does.
Agreed.
Nothing like good old Yankee ingenuity & American know-how.

Let’s face it. America has grown too fat and the refrigerator is running low. We have a few options.

1) Fill the refrigerator with high-fat delicious foods that will pacify dear America and keep her doing the same things. However, how long can we extend our credit to keep this up? This has been our policy going on decades. The monthly payments are starting to mount and America is not as prepared and fit as she needs to be once the credit card companies stop giving more money and decide it’s time to pay the bill.

2) Do absolutely nothing and watch poor America go though massive starvation until somehow she finds a way to take care of herself or die trying. She may have to waste away and lose most of the fat that has taken decades to gain using an economy built on the concept of unlimited supplies of non-renewables. A long term strategy that relies on the help of others and advances in technology. A strategy that relies on continuous global expansion for things to function.

3) Provide assistance and guidance for America to get off consuming enormous quantities of high-fat foods. To ease the transition to a healthy lifestyle that can be sustained and is within the means of America. Technology improvements and strong financial discipline will slowly bring America higher and higher in terms of lifestyle. That lifestyle will not be based on fantasy supported by credit like it is today. It will be true, appreciated and sustainable. However, America has to want the change. It has to have the hunger to fix the problems that are now as pervasive as the problems a crack addict faces.


I hope it makes sense to most people that option 3 is the best way to go. It is interesting that the most powerful force is the most difficult to produce and maintain. That force is motivation. If we look at the history of humans one can easily conclude that war or disaster are some of the best motivators known. Why? Because of the deeply engrained survival instinct we humans carry.

With the global economy being so complex and intertwined I’m convinced that no organized effort, no matter how well intentioned, will be able to clean up the corruption, solidify the masses and get the world motivated for the great task that lies before us. I think the best policy is to keep option 3 in mind while making all decisions. Option 3 is also a good policy for the entire world to follow. We must eventually learn to live within our means here on Earth. As our power grows the Earth gets weaker to resist our actions. Like an aging parent we must transition from child to adult. An adult that takes good care of it’s Mother Earth. With this in mind here are some suggestions for what we should do and maybe some things we shouldn’t do:


Do:

1) Work hard to price non-renewables in a way that reflects, the best we can, the actual costs. This should include long-term affects like what happens when the supply of the non-renewable cannot keep up with demand. Oil has long been subsidized in a way that did not reflect the economic and environmental threats that it imposes. Does reducing the tax on gas move us in that direction? Absolutely not. However, if it keeps America from dropping dead on the floor then it would be a wise move. The bulk, and I mean bulk of America will need a lot more pain than $4 a gallon to motivate change. However, some hardworking people and the poor are really struggling and may need some directed assistance. Lowering the price of gas so that a person can take out a luxury craft is definitely not going to help us. Some may argue that this stimulates the economy and thus moves us forward. I don’t subscribe to that nonsense. We are facing a real energy crisis that could make the Depression seem like a short-term recession. We will be like a fat person going on an emergency diet. Not only must we stop the growth but must drive deep down the curve of suffering to see any useful progress. This is not easy, as anyone on a diet can testify. This is where America is today - extremely fat and addicted to food and drugs. May people do not believe that the world has peaked in terms of oil production and that’s fine. However, even if we are still growing in supply but not fast enough to keep up with real, hungry demand (people in the world are still living without electricity) then it’s essentially the exact same condition! The retraction like we saw in the late 70’s and early 80’s was nothing but a small fire drill compared with what we are facing.

2) Fund (invest) in new technologies that help us move towards sustainability. This will help us reduce the pain that is on its way. If we get really lucky we can turn a negative situation into a positive one. I still think tremendous amounts of pain is coming and is needed but once people around the world are convinced and motivated then technology can help lift us out faster and move us to the next level of advancement.


Don’t Do:

1) Don’t subsidize fuel costs. This only prolongs and intensifies the eventual breaking point. Making fuel artificially inexpensive is like putting a cheese cake in the refrigerator.

2) Don’t force one technology over competing technologies. Even though I don’t think hydrogen is a good fit for our personal transportation fleet doesn’t mean I think we should not research and develop the technology. May the best technology win in a market that is open for all competitors. This is why America is so great. It allows this survival of the fittest to naturally occur (not always but definitely better than other systems). With that said we must think wisely on the situation. It will probably be necessary for the Federal government or even a consensus of world leaders to adopt a standard. For example, building out a smart global grid or a transportation infrastructure. If the parts can’t all work together then a system cannot be constructed. However, great care and openness must be demonstrated. People should be informed of all of the details and reasoning before a decision is rendered. If the US decided to go with a hydrogen build-out because the best minds in the world worked it out and went over all of the options and reviewed all of the pilot projects and determined this was the way to go then I would support it. There are compromises that us humans will have to make so we can all live peacefully on this planet.