Taxes and Patiotism

Last week VP Candidate Slow Joe Biden asserted that the rich (however that is currently defined) have a patriotic duty to pay more taxes. Judge Learned hand would disagree with him and in fact did disagree with him in the 1934 case of Gregory vs. Helvering:

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. [my emphasis] Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."

Pachelbel's Canon in D... With An Attitude

A friend forwarded this to me (thanks Bob!). This is certainly a different take on an old favorite.

Gas Prices and Economic Illiteracy

In the aftermath of Hurricane Ike, gas prices are, predictably, spiking in some places. I haven't seen it here in AZ and almost all our gas comes from a pipeline from Texas. In fact, I just came back from filling my tank at $3.41/gallon. So why are prices spiking in some places and not others? Rich Hailey provides the answer here.

"Here's how it worked. The Knoxville area has several bulk fuel storage depots. Some belong to the chain outfits, others are run by wholesalers that supply independent gas stations. In either case, they manage their storage levels to maintain a competitive retail price. When the price of gas is rising, they maintain a relatively full inventory. This means that on average the gas they store always costs less than the current spot price. On the other hand, when gas prices are dropping, they keep inventories low, so they aren't holding a lot of gas that cost them more than the market price.

It's the exact same thing you do to minimize how much you pay for gas. If the price is going up, you fill up in the morning before the price changes go into effect, and you fill the tank full. When the price is going down, you guy your gas in the afternoon, after the price changes, and you buy just what you need. The wholesalers and bulk storage facilities do exactly the same thing, except on a much larger scale. Gas prices have been plummeting lately, so all of the bulk storage facilities have been keeping their stocks low.

Then along came Gustav, which impacted the ability of refineries to deliver fuel to the regional and local bulk storage facilities. ......... "

Read the whole thing of course but don't expect the MSM to give you the real explanation like this. The economically illiterate MSM in its usual wanton disregard for the truth and apparent aversion to doing their jobs (researching a story and presenting just the facts) is going to trot out its usual line about evil oil companies and price gouging. And, unfortunately, a gullible public is going to buy it.

(via Instapundit)

Sarah Palin - She's No Neophyte When It Comes to Politics

I found this article about Sarah Palin's political rise in the UK's Daily Telegraph (and why do I have to go to a foreign news source to find out about politics in my own country?). It's a very good summary of how Sarah Palin has risen to political prominence, and why it would be unwise to discount her politcal skills and ability to get things done.

"The surprise is not that she has been in office for such a short time but that she has succeeded in each of her objectives. She has exposed corruption; given the state a bigger share in Alaska's energy wealth; and negotiated a deal involving big corporate players, the US and Canadian governments, Canadian provincial governments, and native tribes - the result of which was a £13 billion deal to launch the pipeline and increase the amount of domestic energy available to consumers. This deal makes the charge of having "no international experience" particularly absurd."

Read the whole thing.
(via Samizdata)

Barack 0bama: "no one could have anticipated the surge would work,..."

That's what Barack 0bama told Bill O'Reilly on Thursday night. What a breathtakingly stupid statement. If no one anticipated it would be successful, it would never have been tried. Some people clearly did anticipate it could work, and they were right. At least one of those people goes by the name John McCain.

Bill Whittle Makes a Rare Appearance...

....at National Review Online, and he's optimistic about the GOP's chances of retaining the Whitehouse. Two years ago, just after the 2006 election, I wrote this post and expressed some optimism that the GOP would learn its lesson and that the Democrats might just behave responsibly, having regained control of Congress. I have been disappointed on both counts. But with the nomination of Sarah Palin this week, I have reason to share Bill's optimism. The nomination sends a very strong message that John McCain does "get it" and that he is already doing something about it. Bill Whittle:

"John McCain got me to believe tonight what I never really believed about him before: he is serious about changing Washington. He is serious about getting the GOP back to basics. John McCain wants to repair the brand. Claiming to want to do something is talk. What I think will cause many to believe him is something more than talk: McCain decided to man up. It’s our fault. We lost the confidence of the American people. We said we’d be true to our principles, and we weren't. The Democrats didn't make us do it. We did it to ourselves.

That has the ring of truth to it. It is a grownup accepting responsibility for a mistake not of his making and asking for the chance to rectify it. I don’t know how much of the country will believe him. But I did."

"We did it to ourselves." They say that the first step in dealing with a problem is to recognize that you have one. John McCain gets that. He has taken that first step for the GOP. It's late in the game, but maybe not too late. "I don't know how much of the country will believe him. But I did."

I do too.

Georgia Didn't Start It.

This is must-read from Michael Totten.

"Virtually everyone believes Georgian President Mikheil Saakashvili foolishly provoked a Russian invasion on August 7, 2008, when he sent troops into the breakaway district of South Ossetia. “The warfare began Aug. 7 when Georgia launched a barrage targeting South Ossetia,” the Associated Press reported over the weekend in typical fashion.

Virtually everyone is wrong. Georgia didn't start it on August 7, nor on any other date. The South Ossetian militia started it on August 6 when its fighters fired on Georgian peacekeepers and Georgian villages with weapons banned by the agreement hammered out between the two sides in 1994. At the same time, the Russian military sent its invasion force bearing down on Georgia from the north side of the Caucasus Mountains on the Russian side of the border through the Roki tunnel and into Georgia. This happened before Saakashvili sent additional troops to South Ossetia and allegedly started the war. "

Read the whole thing.

Reason TV on the Folly of Turning Food Into Fuel

Reason TV has a video out that touches on several points I've posted on before about corn-based ethanol. If you're a glutton for punishment you can go back and look at them here, here, here, here, here and here. Or you could watch the video:

Via Instapundit)

The Case for School Choice. QED Indeed.

In six minutes and 5 seconds flat, this clip from the Britsh TV series "Yes, Prime Minister" demolishes most arguments against school choice. It even gets a dig in against socialized healthcare.

Bag Karma

Rand Simberg reports on a mis-adventure had by his baggage on a non-stop flight on American Airlines over this past weekend.

In a case of what I'm calling "Bag Karma" I had the same thing happen to me on a business trip the week before last. It was the first time I had flown on US Airways since they instituted the $15 bag check fee. On the return trip from Washington Dulles to Phoenix the bag check agent put the wrong label on my suitcase, even as she was verifying my name, destination and checking my ID. She handed me my claim check (which I still have) and promptly put another passenger's baggage label on my bag. I got home on time but my bag went to Daytona Beach via Clearwater/Tampa. What it cost them to get my bag back to me by flying it to PHX via Charlotte and then deliver it to my door has to have cost them far in excess of what they collected on the fee.

The airlines could probably go a long way towards solving their profitability problems by just getting their act together on baggage handling. If they route correctly in the first place and take a few extra minutes to do so, if that's what it takes, then they won't be inadvertently running a costly, free cargo service on the side, with all the extra fuel that burns and employee time spent running around tracking errant bags.

As if the baggage problems weren't enough; In further silliness, as of this weekend US Airways is charging for non-alcoholic drinks on its flights as well ($2 for a bottle of water). They're justifying it on the basis of fuel cost for the weight of drinks they have to carry aloft. This is going to backfire on them too. I'm flying on business again next week and I'll bring my own water bottle on board ($1.49), thank you very much. Now they will carry the weight of the water bottle they want to sell me plus the weight of the bottle I'm going to bring and they won't get the revenue. Someone is focusing on the trees and completely missing the forest.

I'm getting very tired of being nickeled and dimed at every turn by the airlines, with the notable and welcome exception being Southwest. Charge a ticket price sufficient to cover the cost of getting an adequately hydrated me and my baggage to my destination on time and I promise, I won't be complaining.

Obamadoration

This video by Mary Katharine Ham is actually a couple of months old but I just ran across it again (at Power Line) and decided to link it. It perfectly skewers the messianic, "chosen one", he-who-will-solve-all-our-problems phenomenon that is Obama.



And let's not forget this lovely quote from that motor-mouthed shrew Michelle Obama:

"Barack Obama will require you to work. He is going to demand that you shed your cynicism. That you put down your division. That you come out of your isolation. That you move out of your comfort zones. That you push yourselves to be better. And that you engage. Barack will never allow you to go back to your lives as usual; uninvolved, uninformed."

Steven Den Beste Makes a Rare Appearance..

...to weigh in on the current state of alternative energy. I've linked (indirectly) to him in the past. As Steven pointed out then, most of the forms of alternative energy aren't scalable, i.e., they can't replace the energy we produce now using fossil fuels/nuclear/hydro energy sources. He hasn't changed his opinion on that. You should read the whole post but it's worth noting the criteria he uses to evaluate whether a particular energy source is viable or not:

"In order for "alternate energy" to become feasible, it has to satisfy all of the following criteria:

1. It has to be huge (in terms of both energy and power)

2. It has to be reliable (not intermittent or unschedulable)

3. It has to be concentrated (not diffuse)

4. It has to be possible to utilize it efficiently

5. The capital investment and operating cost to utilize it has to be comparable to existing energy sources (per gigawatt, and per terajoule).

If it fails to satisfy any of those, then it can't scale enough to make any difference. Solar power fails #3, and currently it also fails #5. (It also partially fails #2, but there are ways to work around that.)

The only sources of energy available to us now that satisfy all five are petroleum, coal, hydro, and nuclear."

Like I said, read the whole thing.

American Physical Society "Reopens" Global Warming Debate

It seems the "consensus" is getting more than a little shaky on Global Warming.

The APS is opening its debate with the publication of a paper by Lord Monckton of Brenchley, which concludes that climate sensitivity -- the rate of temperature change a given amount of greenhouse gas will cause -- has been grossly overstated by IPCC modeling. A low sensitivity implies additional atmospheric CO2 will have little effect on global climate.

Larry Gould, Professor of Physics at the University of Hartford and Chairman of the New England Section of the APS, called Monckton's paper an "expose of the IPCC that details numerous exaggerations and "extensive errors"

And there's this headline too: Proved: There Is No Climate Crisis.

Christopher Monckton, who once advised Margaret Thatcher, demonstrates via 30 equations that computer models used by the UN’s climate panel (IPCC) were pre-programmed with overstated values for the three variables whose product is “climate sensitivity” (temperature increase in response to greenhouse-gas increase), resulting in a 500-2000% overstatement of CO2’s effect on temperature in the IPCC’s latest climate assessment report, published in 2007.

Take a Look at the Trend in Gas Prices

Take a look at the trend in gas prices since the Democrats took over the Congress in January 2007 (data source: Energy Information Administration).

To be sure, prices were trending upward over the first 6 years of the Bush administration with a Republican majority Congress. There was a total rise of 47%, or about 7.8% per year on average. However, in the 18 months since the Democrats took over, with a promise to deliver a comprehensive energy policy and a price per gallon of $2.22, the price of a gallon of gas has risen a further 86% to $4.13 as of the end of June. That annualizes to 57%, or about 4.8% per month on average. Meanwhile they don't want to allow recovery of known domestic reserves, won't entertain increased use of nuclear energy and instead insist on converting our food supply into biofuels which is raising the price of food for people worldwide.

The Congress certainly lost its way under the Republicans but at least they weren't Hell-bent on wrecking the economy. They need to pick up on this issue and hammer away at it if they want any hope of getting back into the majority even staying relevant.

PS: Sorry for the fuzziness of the Chart. I haven't figured out how to post an Excel chart directly to the blog.

Raising Taxes Is Not a Good Idea

I've been meaning to comment on this op-ed from the Wall Street Journal by David Ranson but haven't been able to get around to it until now. He talks about the somewhat overlooked work of San Francisco economist Kurt Hauser who noticed something about the relationship between marginal income tax rates and tax revenues. No matter what the marginal tax rate is, revenues will track very closely to 19.5% of GDP with very little deviation. It should follow that if you want to increase tax revenues you want policies that encourage GDP growth.

It is pretty well accepted that raising taxes retards GDP growth and if GDP growth is already very low, as it is right now, then you could get negative growth, i.e. shrinkage. The definition of when the economy is in recession is two consecutive quarters of negative GDP growth. Raising tax rates at this time, as the Democrats want to do, could very well tip us into a recession. If the Democrats get into the White House and increase their majority in Congress, raising taxes is what they have promised to do, telling their voters that it will only affect "the rich", however they are defining that term today as they pander to wealth-envy and promise "free" goodies. To think that it won't affect them is demonstrably wrong, as the work of another economist, Nobel prize winner Ed Prescott has shown.

"Here is a somewhat startling fact: Based on labor market statistics from the Organisation for Economic Co-operation and Development (OECD), Americans aged 15-64, on a per person basis, work 50 percent more than do the French. Comparisons between Americans and Germans or Italians are similar. What’s going on here? What can possibly account for these large differences in labor supply? It turns out that the answer is not related to cultural differences or institutional factors like unemployment
benefits, but that marginal tax rates explain nearly all of this difference. " [my emphasis]

If the Democrats follow through on their promises then we will have a recession. That is definitely a change you can believe in.