‘ If I were an economic adviser to the President and he decided to enact a gas rebate, I would resign. Nobody who understands the laws of supply and demand should want to see this implemented.’
There is nobody who understands laws of supply and demand in the Biden regime, and certainly Biden doesn’t, or apparently in any Western Government. Isn’t that the root cause of the economic disaster unfolding around us?
In the UK the brilliant solution to the Govt made energy crisis caused in no small part by a price cap, is to give everyone £400 in the Winter season and apply a 25% windfall tax on energy company ‘excess’ profits. Sure to help both dampen demand in a period of high demand, and encourage investment in increasing supply.
Germany meanwhile is opening up more coal-fired power stations in order to wean itself off Russian gas, because, shock news, the zillions of wind turbines they have built can’t meet anywhere close to demand and tend to spend long periods becalmed and idle - something to do with Germany’s geographic location, and sluggish airflows over Continental Europe which came as a complete surprise to the Germans. And because coal-fired power stations cut carbon emissions…. no, just made that last bit up.
My thanks to Arnold and all those other patient souls who take the trouble to explain basic economic facts over and over in public forums. It must be incredibly frustration, but I hope you will continue to do so. Repetition is the only way people learn.
Restricting supply of fossil fuels is what Leftists have said they want to do. It is what they have been doing in Europe. It was one of the first actions the Biden administration took. Lest we forget, here is the executive order on decarbonization of the American economy. Note this particular objective:
"The Secretary of State, the Secretary of the Treasury, and the Secretary of Energy shall ... promote ending international financing of carbon-intensive fossil fuel-based energy..."
The Biden administration is waging war against the fossil fuel industry. They announced it. Anyone surprised at what has happened needs to start paying attention.
"If I were an economic adviser to the President and he decided to enact a gas rebate, I would resign."
But if you were an academic economist who voted for Biden, knowing/expecting such policies would be likely, would you resign a tenured professorship?
It's amusing sad to me to see so many "intelligent" folk who were so irrationally, but consistently, against Trump, now complaining strongly about the ignorant, dishonest alternative.
Biden's strangulation of gas production in America, starting immediately in Jan 2020, were designed to reduce supply AND increase the prices. The Dems got what they "wanted" - but now, dishonestly, claim they didn't really want THIS much.
Arnold, you were careful not to support Biden, unlike most FIT idiot-pundit-geniuses, so you're much less to blame -- but you continue to criticize Trump, months after his peaceful transfer of power, far more than Biden.
Biden's actions caused gas price increase; caused the Afghanistan "weak America" debacle, influenced Putin to invade Ukraine and push oil trading to the top of international relations.
Biden, not Trump, is the terrible US president who did all these terrible things - terrible because of terrible results.
"I grant that the rebate or a gas tax holiday could be politically popular, because many voters are ignorant."
No. Gas tax rebate would likely be "progressive" in the sense that likely everyone would get the same amount and the impact would be to the national debt (which will not be repaid by those that aren't even paying income taxes on net).
I mean it's dumb if you care about "overall society", but as a transfer from one group to another its obvious who the relative winners and losers would be. Sure, people would prefer simple cash, but a debit card that worked only at gas stations is about as close to cash as you can get. It need not necessarily increase gas demand either, people have a certain inelastic demand for gas and would burn through the cards before it impacted marginal gas demand. Even people without cars would just sell them for cash equivalent.
You can go down the line on this. Youngkin promised to end the grocery tax to help with inflation. You could apply the same logic but at the end of the day the grocery tax was a regressive tax on caloric efficient staple and it's a win to get the government funded in some other way.
Anyway, I find it pretty telling that a man taking a hard line in Ukraine is also doing something like this.
"Sure, people would prefer simple cash, but a debit card that worked only at gas stations is about as close to cash as you can get. "
Especially it's close to cash for those who need to "drive to work". (Does anybody else remember CA's Hayakawa in the 70s).
Once you accept the idea of a progressive tax - the rich pay both more AND at a higher rate, such equal rebates to all mean the rich in the future will be on the hook for more.
I've long thought the way to get a carbon tax accepted is to first give a flat "worker's rebate" fore expected future tax payments, so that the tax is gov't revenue neutral, and after the rebate, implement the tax. So those who get worker rebates but use less gas have more rebate cash for non-gas purposes.
That's the carrot-based method of tax AND spend. The real gov't inflation problem is too much spending, but nobody who's getting gov't cash, which is almost everybody, want's less of their cash.
Holland, long ago installed a tax reduction on mortgages. This resulted in higher house prices. Same thing. Also it is a subsidy for the affluent (who can afford to buy a house).
I see in the news today that Biden is going to go ahead with a gasoline tax "holiday". I mostly wonder just what the point is of that. No one is going to be happy with an 18 cent price reduction, so why bother?
Some clever economists, keen to be insiders, will half-persuade themselves that somehow these policies are justified by "the theory of the second best":
Good analysis. Would you also resign from the staff of any Republican politician that claims that the increase in gasoline prices is due to Administrative actions like allowing states to slow due leasing of offshore tracks, or investing in infrastructure for the transportation of petroleum products?
Maybe I'm just being more sensitive to criticism of "my side," but I think that Libertarian-ish commentators concentrate a disproportionate amount of their criticism on the solecism of the Left than the Right.
That's a probably a fair criticism of me and most people at times, but this time I'm criticizing the failure to criticize an erroneous economic argument about the exploration policy, not criticism of the policy.
Yes they will restrict domestic production some time in the future and can and should be criticized on those grounds. [I think they are politically stupid positions as well.]
But to say they have or will have an effect on gasoline prices paid by anyone in the US during the administration of Joseph Biden reflects either dishonesty or abysmal economic ignorance, either of which should be grounds for resignation. [I'll discount the possibility that the advisor may yet hold out hope for relieving the politician of his (sic) ignorance.]
All supply expanding regulatory actions are long horizon by their very nature, Thomas, so these actions have today and will keep contributing to higher prices now and in the future. There is no reason to not remove them immediately, and no excuses either. It isn't just Biden- it is Obama's actions, too, some of which were undone under Trump, but redone by Biden in his first week in office. The oil prices today are a reflection of actions taken in the last 20 years, both good and bad.
I did not argue for the restrictions. As far as I can see they are mistaken both economically and politically. I am arguing against the ignorance (at best) of criticizing them for affecting the price that people are paying for gasoline over any reasonable horizon. If favoring gasoline rebates is worth resigning over, so too should linking producing restrictions to gasoline prices.
And btw if domestic demand really is inelastic a hypothetical gasoline subsidy would go mainly to consumers, not producers., although that does not make it a good idea.
One last time, and then I am done- the supply constraints today reflect decisions made months/years/decades in the past. Solutions are going to be decisions made today that will impact supply over the shorter and longer term. Kling was attacking claims that are just outright wrong on their face. The things you are trying to critique aren't even wrong on their face, just not policies that are going to immediately impact prices of oil and the subsequent products. You are engaging in and apples to oranages argument, and, in my opinion, doing so dishonestly.
I'm not overly concerned about your opinion of my honesty. :)
You said "just not policies that are going to immediately impact prices of oil"
And I am not arguing about the wisdom of the policies. I'll happily stipulate that I that they probably would not pass a C-B analysis even using the shadow price of the CO2 not emitted. I just think that anyone who says they ARE going to affect gasoline prices, is either dishonest or ignorant enough to merit a resignation as much as someone who want to subsidize gasoline prices. [Now if I thought either was from genuine ignorance, my inclination would be to stay and try to educate my client expecting that I could eventually get them to admit it was pure pandering politics.]
Thomas -- I don't understand your examples. Restricting drilling leases and oil transportation would tend to increase oil price, wouldn't they? You can certainly argue that they aren't dominant causes, but they seem very different from Arnold's example.
They will increase the international prices of petroleum by some infinitesimal amount sometime in the far future. I'm pretty sure that the projects being restricted would pass a cost benefit analysis including the shadow price of the CO2 when the fuel is consumed and so the restrictions are both a political and and economic mistake, but not becasue they will have any effect on gasoline prices during the electoral life of the politician being advised.
Maybe ‘the Left’ provides more material to work with - like causing the deaths of 100 million people, at least, globally in the last hundred years and ruining every economy they touch, including now that of the USA.
You are totally blind to criticism of your side. You say "good analysis" but you prefer to ignore it. I regret that Arnold has not addressed how much and why the senile President --the barbarians' puppet-- has restricted supply. Like Biden, you have learned nothing from what the European puppets have been doing for a long time to restrict supply and subsidize demand.
I not only am not blind to criticism of "my side" I agree with much of it and have some of my won that the "other side" has not made. In making my criticisms, for example, of not rejoining the TPP or the failure to attract world class immigrant talent, I do not need to call anyone "senile" or a "puppet."
‘ If I were an economic adviser to the President and he decided to enact a gas rebate, I would resign. Nobody who understands the laws of supply and demand should want to see this implemented.’
There is nobody who understands laws of supply and demand in the Biden regime, and certainly Biden doesn’t, or apparently in any Western Government. Isn’t that the root cause of the economic disaster unfolding around us?
In the UK the brilliant solution to the Govt made energy crisis caused in no small part by a price cap, is to give everyone £400 in the Winter season and apply a 25% windfall tax on energy company ‘excess’ profits. Sure to help both dampen demand in a period of high demand, and encourage investment in increasing supply.
Germany meanwhile is opening up more coal-fired power stations in order to wean itself off Russian gas, because, shock news, the zillions of wind turbines they have built can’t meet anywhere close to demand and tend to spend long periods becalmed and idle - something to do with Germany’s geographic location, and sluggish airflows over Continental Europe which came as a complete surprise to the Germans. And because coal-fired power stations cut carbon emissions…. no, just made that last bit up.
Funny old World.
My thanks to Arnold and all those other patient souls who take the trouble to explain basic economic facts over and over in public forums. It must be incredibly frustration, but I hope you will continue to do so. Repetition is the only way people learn.
Restricting supply of fossil fuels is what Leftists have said they want to do. It is what they have been doing in Europe. It was one of the first actions the Biden administration took. Lest we forget, here is the executive order on decarbonization of the American economy. Note this particular objective:
"The Secretary of State, the Secretary of the Treasury, and the Secretary of Energy shall ... promote ending international financing of carbon-intensive fossil fuel-based energy..."
The Biden administration is waging war against the fossil fuel industry. They announced it. Anyone surprised at what has happened needs to start paying attention.
https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/27/executive-order-on-tackling-the-climate-crisis-at-home-and-abroad/
"If I were an economic adviser to the President and he decided to enact a gas rebate, I would resign."
But if you were an academic economist who voted for Biden, knowing/expecting such policies would be likely, would you resign a tenured professorship?
It's amusing sad to me to see so many "intelligent" folk who were so irrationally, but consistently, against Trump, now complaining strongly about the ignorant, dishonest alternative.
Biden's strangulation of gas production in America, starting immediately in Jan 2020, were designed to reduce supply AND increase the prices. The Dems got what they "wanted" - but now, dishonestly, claim they didn't really want THIS much.
Arnold, you were careful not to support Biden, unlike most FIT idiot-pundit-geniuses, so you're much less to blame -- but you continue to criticize Trump, months after his peaceful transfer of power, far more than Biden.
Biden's actions caused gas price increase; caused the Afghanistan "weak America" debacle, influenced Putin to invade Ukraine and push oil trading to the top of international relations.
Biden, not Trump, is the terrible US president who did all these terrible things - terrible because of terrible results.
OK, no mean tweets.
"I grant that the rebate or a gas tax holiday could be politically popular, because many voters are ignorant."
No. Gas tax rebate would likely be "progressive" in the sense that likely everyone would get the same amount and the impact would be to the national debt (which will not be repaid by those that aren't even paying income taxes on net).
I mean it's dumb if you care about "overall society", but as a transfer from one group to another its obvious who the relative winners and losers would be. Sure, people would prefer simple cash, but a debit card that worked only at gas stations is about as close to cash as you can get. It need not necessarily increase gas demand either, people have a certain inelastic demand for gas and would burn through the cards before it impacted marginal gas demand. Even people without cars would just sell them for cash equivalent.
You can go down the line on this. Youngkin promised to end the grocery tax to help with inflation. You could apply the same logic but at the end of the day the grocery tax was a regressive tax on caloric efficient staple and it's a win to get the government funded in some other way.
Anyway, I find it pretty telling that a man taking a hard line in Ukraine is also doing something like this.
"Sure, people would prefer simple cash, but a debit card that worked only at gas stations is about as close to cash as you can get. "
Especially it's close to cash for those who need to "drive to work". (Does anybody else remember CA's Hayakawa in the 70s).
Once you accept the idea of a progressive tax - the rich pay both more AND at a higher rate, such equal rebates to all mean the rich in the future will be on the hook for more.
I've long thought the way to get a carbon tax accepted is to first give a flat "worker's rebate" fore expected future tax payments, so that the tax is gov't revenue neutral, and after the rebate, implement the tax. So those who get worker rebates but use less gas have more rebate cash for non-gas purposes.
That's the carrot-based method of tax AND spend. The real gov't inflation problem is too much spending, but nobody who's getting gov't cash, which is almost everybody, want's less of their cash.
From "Money" -
share it fairly, but don't take a slice of
myyyyyyyy
pie.
Holland, long ago installed a tax reduction on mortgages. This resulted in higher house prices. Same thing. Also it is a subsidy for the affluent (who can afford to buy a house).
I see in the news today that Biden is going to go ahead with a gasoline tax "holiday". I mostly wonder just what the point is of that. No one is going to be happy with an 18 cent price reduction, so why bother?
No worries mate. If your concerned the producers will pocket the gains, all you need to do is slap on some price controls.
And bell-bottomed jeans.
Some clever economists, keen to be insiders, will half-persuade themselves that somehow these policies are justified by "the theory of the second best":
https://en.wikipedia.org/wiki/Theory_of_the_second_best
If you were ever an economic adviser to the President, you would have resigned already. You wouldn't last a day!
P.S. He probably saw all those stickers with his face pointing at the gas pump that say "I did that".
Good analysis. Would you also resign from the staff of any Republican politician that claims that the increase in gasoline prices is due to Administrative actions like allowing states to slow due leasing of offshore tracks, or investing in infrastructure for the transportation of petroleum products?
Maybe I'm just being more sensitive to criticism of "my side," but I think that Libertarian-ish commentators concentrate a disproportionate amount of their criticism on the solecism of the Left than the Right.
Paraphrase from Jim Treacher
When Republicans screw up, complain about what they did. When Democrats screw up, complain about Republicans pointing it out.
That's a probably a fair criticism of me and most people at times, but this time I'm criticizing the failure to criticize an erroneous economic argument about the exploration policy, not criticism of the policy.
Why should he resign over those, Thomas- both of those actions do restrict supply, and have restricted supply.
Concern trolling is never effective, Thomas, and often makes its practitioners look stupid, or demonstrates their stupidity.
Yes they will restrict domestic production some time in the future and can and should be criticized on those grounds. [I think they are politically stupid positions as well.]
But to say they have or will have an effect on gasoline prices paid by anyone in the US during the administration of Joseph Biden reflects either dishonesty or abysmal economic ignorance, either of which should be grounds for resignation. [I'll discount the possibility that the advisor may yet hold out hope for relieving the politician of his (sic) ignorance.]
All supply expanding regulatory actions are long horizon by their very nature, Thomas, so these actions have today and will keep contributing to higher prices now and in the future. There is no reason to not remove them immediately, and no excuses either. It isn't just Biden- it is Obama's actions, too, some of which were undone under Trump, but redone by Biden in his first week in office. The oil prices today are a reflection of actions taken in the last 20 years, both good and bad.
I did not argue for the restrictions. As far as I can see they are mistaken both economically and politically. I am arguing against the ignorance (at best) of criticizing them for affecting the price that people are paying for gasoline over any reasonable horizon. If favoring gasoline rebates is worth resigning over, so too should linking producing restrictions to gasoline prices.
And btw if domestic demand really is inelastic a hypothetical gasoline subsidy would go mainly to consumers, not producers., although that does not make it a good idea.
One last time, and then I am done- the supply constraints today reflect decisions made months/years/decades in the past. Solutions are going to be decisions made today that will impact supply over the shorter and longer term. Kling was attacking claims that are just outright wrong on their face. The things you are trying to critique aren't even wrong on their face, just not policies that are going to immediately impact prices of oil and the subsequent products. You are engaging in and apples to oranages argument, and, in my opinion, doing so dishonestly.
I'm not overly concerned about your opinion of my honesty. :)
You said "just not policies that are going to immediately impact prices of oil"
And I am not arguing about the wisdom of the policies. I'll happily stipulate that I that they probably would not pass a C-B analysis even using the shadow price of the CO2 not emitted. I just think that anyone who says they ARE going to affect gasoline prices, is either dishonest or ignorant enough to merit a resignation as much as someone who want to subsidize gasoline prices. [Now if I thought either was from genuine ignorance, my inclination would be to stay and try to educate my client expecting that I could eventually get them to admit it was pure pandering politics.]
Thomas -- I don't understand your examples. Restricting drilling leases and oil transportation would tend to increase oil price, wouldn't they? You can certainly argue that they aren't dominant causes, but they seem very different from Arnold's example.
They will increase the international prices of petroleum by some infinitesimal amount sometime in the far future. I'm pretty sure that the projects being restricted would pass a cost benefit analysis including the shadow price of the CO2 when the fuel is consumed and so the restrictions are both a political and and economic mistake, but not becasue they will have any effect on gasoline prices during the electoral life of the politician being advised.
Maybe ‘the Left’ provides more material to work with - like causing the deaths of 100 million people, at least, globally in the last hundred years and ruining every economy they touch, including now that of the USA.
The kind of comment that makes me think I'm NOT just being too sensitive to criticisms of "my side." :)
This ‘kind’ of comment?
What ‘kind’ meets with your approval? (Rhetorical).
One that distinguish a neo liberal from starving millions of Ukrainians to death in the 30's .
You are totally blind to criticism of your side. You say "good analysis" but you prefer to ignore it. I regret that Arnold has not addressed how much and why the senile President --the barbarians' puppet-- has restricted supply. Like Biden, you have learned nothing from what the European puppets have been doing for a long time to restrict supply and subsidize demand.
I not only am not blind to criticism of "my side" I agree with much of it and have some of my won that the "other side" has not made. In making my criticisms, for example, of not rejoining the TPP or the failure to attract world class immigrant talent, I do not need to call anyone "senile" or a "puppet."