I was some what surprised that Senator Obama proposed rebating consumers $1000 for gas purchases given that he heavily criticized both Senator Clinton and Senator McCain for this just months ago. He criticized their plan as simple gimmicks that pandered to voters. Well, it was probably just more symbolic than effective, but at least it did no harm.
Senator Obama’s suggestion appears to have a punishing impact on oil companies which I suppose has an added pandering punch. My 18 year-old freshmen, first year, macro-economics students could tell you why this is just plain bad economics If you take $1000 per consumer in taxes from Oil Companies and think you give it to consumers and it stops there, you need to go take some college economics. This is a complete no-brainer that any entry level micro or macro student should be able to shoot down. I’m going to try to explain this to you intuitively so you can shoot it down too. I promise I’ll avoid the supply and demand curves in the process.
Any time you place a tax on a good or service, it is important to know how sensitive the demand for that good or service is to price changes. This concept is called ‘elasticity’ of demand in microeconomics and it is one of the first things you learn as an entering freshmen in your economics 101 classes. The demand for some goods are quite price sensitive and others are not. It’s really dependent on a number of things, but the bottom line is just this: Is it easy to live with out this good?
Perhaps the most price sensitive good is a drug that you are either addicted to or need to live. There is absolutely no price that will stop you from demanding that good because it means death or extreme withdrawal. This is why drug dealers frequently give their drugs away to start with, then gradually increase the price. They know once your hooked, you’ll give up every thing else to maintain the high and eventually even steal or prostitute yourself to earn the money to by the drug. If you’re a diabetic and you need a certain level of insulin to stay alive, you will have to do the same. You will die without the drug so consuming other goods and services come after what you have to do to pay for the insulin.
Oil does not have the same price sensitivity as an addictive drug or a drug you need to live, but in the short run, it is very price sensitive. This is because most folks need to drive to get to their jobs, schools and errands. You can’t just change to a more fuel efficient car immediately, because that is very expensive, so you have to adjust your behavior to pay for the increased cost of gas. First you try to drive less. Then you start giving up other things to buy the gas. Still, you’re stuck with a certain number of miles you have to drive. At that point, you just have to suck it up and pay for the gas.
If you tax these price sensitive goods, it’s just like raising the price of them. This is because there is a certain amount the consumer must buy. They are stuck with whatever cost the seller wishes to charge which can include a large portion of a tax placed on the seller. The tax on goods with demand that is insensitive to price just basically causes an increase in cost passed to the consumer. This also means if there is a tax placed on the provider of this price insensitive or “inelastic” good, it is very easy for that provider to pass that tax on to the consumer. This is because the consumer basically will not have that many alternatives other than to suck it up and buy that same amount of gas every week. The consumer will have to forgo other goods and will put more of their income towards buying gas.
This is what will happen if Senator Obama’s gas tax on Oil Companies would come to fruition, which is highly unlikely even with a very democratic senate. The cost of the tax to the producers will just be passed on to the consumers of gasoline in the form of higher prices. This means soccer moms, truck drivers, and truck fleets delivering goods to your local stores. You may get the $1000 back in a check, but you will pay for it every place else in higher prices. How much that higher price is will depend on the sensitivity of your demand to that good. For necessary items like gas and food, it will be a lot. For goods you can live with out, like luxury items, it will be less. So what this really does is transfer the ‘burden’ of the tax to the heavy users of the most necessary items.
I could use fancy graphs and models to show you how much this would cost. I’m assuming probably some economists are doing this somewhere and you will hear shortly about the numbers they’ve come up with. However, I just hope you’ll understand on a very basic level what a very bad idea this is; no matter how appealing it sounds.
I have to tell you that I do not have any sympathy for gas and oil companies which enjoy near monopoly power with a very price insensitive good. I believe we need to do something with their market structure or place some demands on them if we grant them more drilling rights. However, the idea of taxing them to rebate money to consumers is not a good one. In the long run, it’s just going to cost you and me. It’s basically just giving with one hand and taking with the other.
Did you like this post? Please share it with your friends:
But to say that RW who posted here frequently and vehemently about Senator Obama took his life yesterday. I’ve known RW for some time as a fellow Buddhist-although he practiced the Thai traditions and I follow the Tibetan traditions. I know that he was always looking for the peace for himself after going through the Vietnam War.
I had the pleasure of introducing my beloved French Quarter to Bob one time on a tour he took to meet a few of us that knew him from an on-line Buddhist discussion group. He was very proud of both his children. His daughter was a virtuoso on the violin. He also had 2 sons. He took care of his elderly father until he passed a few years ago and was fixing up his old family home. When I met him about 12 years ago, he was coming off of a very bad divorce and was always talking about taking monk vows. He never did.
No matter what difference we had about political candidates, we always had a lot of respect for each other. I just talked to my lama and just hoping we can finally get him to a place of peace.
Om mani padme hum
kat
Did you like this post? Please share it with your friends:
The World Net Daily has just printed an article outlining the results of the Obama Campaign’s loosy goosy online fund-raising practices. It appears that two Palestinian brothers in the Hamas movement donated nearly $30,000.
Palestinian brothers inside the Hamas-controlled Gaza Strip are listed in government election filings as having donated $29,521.54 to Sen. BarackObama‘s campaign.
The donations would violate election laws, including prohibitions on receiving donations from foreigners and guidelines against accepting more than $2,300 from one individual during a single election, Bob Biersack, a spokesman for the Federal Election Commission, told WND in response to a query.
The contributions also raise numerous questions about the Obama campaign’s lax online donation form, which apparently allows for the possibility of foreign contributions.
In an online form on Obama’s campaign site, the Edwans listed their street as “Tal Esaltan,” which they wrote was located in “Rafah, GA.”
Rafah is not a city in Georgia. The Atlas blog immediately raised concerns that the money may have been donated from the Gaza Strip town of Rafah.
The brothers swore they just bought tshirts to sell in the Gaza strip. Considering those t-shirts are $20.08 a pop… that’s a heckuva a lotta t-shirts. Also, the GDP per capita for the Gaza Strip (average income) is $1100 per year. I can’t imagine buying a tshirt for that kind of money if I was trying to feed a family on $1100 a year.
Monir and Hasam Edwan denied their financial transactions online – listed as donations in U.S. government election filings – were actual donations to Obama’s campaign. Instead they claimed they purchased about $30,000 in Obama T-shirts from the presidential candidate’s online store – a contention that did not hold up during a WND interview, when they changed their story several times.
“My brother Hosam and I knew that Obama will be a big hit even before he became a candidate. We knew the guy would be a celebrity in Gaza so we decided to invest the amount of $29,000 to buy Obama T-shirts from his website and sell them in Gaza,” Monir Edwan told WND, speaking by cell phone from Gaza.
“I know on the back of this story Obama rivals will present our business as a donation and they will try to use this story to let Obama fall, but I’m telling you, we bought T-shirts,” Edwan maintained.
Edwan said any profit made from purportedly selling the Obama T-shirts was not returned to the Obama campaign.
“We have nothing to do with the Obama campaign. We just like Obama and believe he will be the best for the Palestinians and for the world.”
At first Monir Edwan claimed he sold the T-shirts in Gaza for around $9 and that a profit was made.
“Some young men even bought the T-shirts for 60 shekel ($17.29), which is a lot to spend in Gaza on a T-shirt, but that is how much Gazans like Obama,” Edwan claimed.
Further complicating the transaction are these small facts.
“Maybe we sold the shirts for a lot more. I can’t remember now,” said Edwan.
Asked why he would purchase T-shirts at such a high rate and pay the cost of shipping when he could pay a company to produce T-shirts for less, Edwan replied, “We wanted the shirts to come from the campaign.”
But Edwan could not explain how he managed to get shipments of T-shirts into the Gaza Strip during the months he claimed to have purchased the merchandise, since Israel imposed a tight closure of the Gaza Strip starting in June 2007 that lasted until June 2008, when the Israeli government agreed to a cease-fire with Hamas in Gaza.
“We don’t want to cause any damage to Obama’s campaign,” was Edwan’s reply.
There appears to be more in the works. Larry Johnson at NQ listed reason number one for superdelegates to change their mind.
1. Barack Obama’s campaign has filed false, misleading financial reports with the FEC. We have the story but a mainstream journalist is working on it. We will break the story, probably next week, once it hits the press.
Grab some popcorn folks … time to get a front seat! Just a few more weeks to the DNC. Will he self-implode enough for the DNC to actually stop the Obamanation abomination or will we have to endure another looser DNC candidate for prez when this should be the year for progress?
Did you like this post? Please share it with your friends:
Since Senator Obama is still having issues with electability, he’s decided to try to go back to groups he threw under the bus and see if he can get enough votes to shove him to the 50% line.
First, there is this series of telling polls by Rasmussen Reports.
The Rasmussen Reports daily Presidential Tracking Poll for Monday shows the race for the White House is tied with Barack Obama and John McCain each attracting 44% of the vote. However, when “leaners” are included, it’s McCain 47% and Obama 46%.
It’s worth noting that there are far more uncommitted voters at this point in Election 2008 than there were four years ago. The Election 2004 Presidential Tracking Poll showed that 92% of voters were committed to either President Bush or Senator Kerry on July 24, 2004. Only 8% were uncommitted.
This year, 37% of the uncommitted voters plan to vote for a Democratic Congressional candidate while 22% say they’ll vote for the GOP. But, when asked which way they’re leaning in the race for the White House, 26% say McCain and 19% say Obama. Twenty percent (20%) say they still prefer a third-party candidate.
and this:
The first nationwide survey since Barack Obama returned from his highly publicized travels in Europe and the Middle East finds that the trip had little or no impact on the U.S. presidential race.
and this:
Sixty-nine percent (69%) of the nation’s voters say they’ve seen news coverage of the McCain campaign commercial that includes images of Britney Spears and Paris Hilton and suggests that Barack Obama is a celebrity just like them. Of those, just 22% say the ad was racist while 63% say it was not.
However, Obama’s comment that his Republican opponent will try to scare people because Obama does not look like all the other presidents on dollar bills was seen as racist by 53%. Thirty-eight percent (38%) disagree.
So, now we see another flip by the Obama campaign. I guess he’s decided that some of the voters he threw under the bus during the primary are necessary for an Obama win. He wants to seat the Florida and Michigan Delegation restored to one vote.
Obama Asks Panel to Restore Votes
By KATHARINE Q. SEELYE AUG. 4, 2008
Senator Barack Obama has asked the credentials committee of the Democratic Party to give full voting rights to delegates from Florida and Michigan at the national convention in Denver.
The request is likely to be granted because it comes from Mr. Obama, the all-but-certain nominee, who now controls the party apparatus.
After Florida and Michigan held early primaries in violation of party rules, the party punished them by saying their delegations would not be seated at the convention. In May, the rules committee agreed to let the delegates have half a vote each.
Mr. Obama’s request is likely to cause consternation among party officials, who have struggled to maintain some authority over the primary calendar. Restoring full voting rights will essentially be giving a green light to other states to ignore the primary calendar next election.
The credentials committee is scheduled to meet Aug. 24, the day before the convention begins
I know I’m a cynic, but something tells me this move is not to restore the democratic party to its one man-one vote principle. They must have had time to restack the deck in these states and now feel secure enough to let them vote. Could this be part of the negotiations with Hillary? I would love to figure out what went in to this complete reversal. I’m sure he must feel secure in the nomination if he’s agreeing to this change at this point.
The bigger question, however, goes to Howard Dean and Donna Brazile and all those folks that were pushing the rules like they’d been handed down on stone tablets to Charlton Heston on movie set, how are you going to spin this?
I’ve spent the last day watching a hurricane develop south of me. If you look at the sky above my house you’ll see mostly blue sky. However there are some very low lying clouds with a hint of darkness spinning back towards the Southeast. These little spinning clouds are harbingers of something bigger picking up steam just out of sight of the little kathouse in the ninth ward. I’m wondering if folks in Colorado see something similar around Denver.
Did you like this post? Please share it with your friends:
One thing that I’ve learned about Pumas is that follow-up and follow through are obsessions. Nothing comes between a Puma and the Truth. Right after I saw SimoFish’s video, I posted it here then linked to No Quarter and Camille and Blues’ Bitterpolitcz. I picked up the youtube link at RiverDaughter’s The Confluence the moment SimoFish posted it. Isn’t it amazing how quickly inspiration and revolution can spread these days? SimoFish’s video with its two follow ups went viral shortly thereafter. Why? Because every PUMA took that video link and went on the prowl. I had no idea how widespread the Puma movement had become until this blog started getting pingbacks from all sorts of places. I tried to get the videos up as soon as I could because I knew exactly how starved we all were for some Hillary wonkyness after several weeks of Baracky vagueness. I immediately emailed Just Say No Deal (Nicely led by a PR Genius Princess Wears Prada) where it became a press release. Within a few moments, Gary Chapel Hill had posted the analysis and linked it to earlier work by Alegre. However, the best Puma growl was the creative and brave work of Guilda of Bitterpolitcz. She is one very bitter and brilliant Camillion. Most of us just dropped the video link where ever we could. Guilda did us all one better. She called Thom DeFrank and blogged it live for us. She later posted his response. I’ve reposted it all here because there’s nothing like networking and teamwork to see a plan through. I think the DNC and Senator Obama should be very afraid of the audacity of PUMAs everywhere!
My question of the day? What will the NY Daily Times say now?
I just got off the phone with Thom DeFrank. I started the conversation by asking him to retract his story. He told me that the news came from a person high up in the Clinton campaign, who talks with Hillary on a daily basis. I them told him about the video and he asked me to email it to him and I did.
He was very nice and said that if what I say is true about the video and this person doesn’t have a reasonable response as to why he told him this story, he will never trust that source again.
He said one or three things may have happened 1)Hillary changed her mind 2)Hillary knew he was going to tell Thom the story and she wanted to beat the story down(which I don’t believe for onwe minute!) and 3) The source lied to him. He’s going to watch the video and get back to me. When he does, I’ll let you know his response.
I also told him that I will never vote for Obama. He said, “so you’d rather have McCain as opposed to Obama?” I sad “Thom, I’d rather have four more years of BUSH, than one MONTH of Obama!” He was quite taken aback by that. He said, you know- that’s a very strong statement. I said, Thom- I do not trust him period. I don’t like the company he keeps and I don’t feel that he will make decisions that are good for this country and to keep Democracy in place. I also said that I truly believe he wants the “title”, but not the job.
He was so nice. And he tahnked me for being civil, because aparently, he’s gotten callers that have not been as nice as me.
He thinks part of why Hillary got the treatment in the press that she’d gotten, was because apparently, the Clinton’s were not very press friendly, so…some of it might have been payback. So I asked him if he truly feels that that statment justifies how she was treated and he said it doesn’t justify it, it just that probably came into play
I also told him that I was truly appaled at the news cycle this primamry season. I told him that I used to depend on newspapers like the Daily News, Wall St, Journal and the like to give me TRUE reports of what’s going on in the world, not just some bullshit that people tell them to write.
Then we got into what true journalism is and that’s how the stuff about the Clinton’s and the press came about.
He agreed that it was pretty brutal and he also said that the last 2 months of the primaries, that she was definitely the stonger candidate.
Everybody knows it…they all do…so why won’t people stand up?
I really enjoyed our chat and have now listened to the entire YouTube segment you sent me. Respectfully, all she says is that no decisions have been made. The paper’s story quotes a Clinton aide saying the same thing. That aide is several rungs down the ladder in the Clinton campaign. She would not know the state of play. In other words, my source is far better placed.
Senator Clinton saying no decisions have been made is hardly a definitive knockdown. I believe in the end she’ll have the best of both worlds: she won’t have her name placed in nomination – insulating her from charges that she’s either a sore loser or a spoiler. But she will have the satisfaction of seeing hundreds of her admirers vote for her anyway. Remember, delegates are free to vote for her even if her name isn’t placed in nomination. That formulation is the savvy way to go, and she’s nothing if not savvy.
Regardless, I hope you’ll call again. I always enjoy the dialogue, especially with callers as civil and passionate as you, which is not always the case.
Sincerely, Tom DeFrank
I still say she wants her name placed in nomination. I wonder what the hell they’re saying to her.
Amazing what a little creative networking by some really determined patriots will do! Can you imagine what Paul Revere might have done if he’d had access to the Internet? One IM if by day, TWO PINGS if by night.
UPDATE: SimoFish’s Video has hit the MSM: this is from 8/7 and ABC
The Sky Dancing banner headline uses a snippet from a work by artist Tashi Mannox called 'Rainbow Study'. The work is described as a" study of typical Tibetan rainbow clouds, that feature in Thanka painting, temple decoration and silk brocades". dakinikat was immediately drawn to the image when trying to find stylized Tibetan Clouds to represent Sky Dancing. It is probably because Tashi's practice is similar to her own. His updated take on the clouds that fill the collection of traditional thankas is quite special.
You can find his work at his website by clicking on his logo below. He is also a calligraphy artist that uses important vajrayana syllables. We encourage you to visit his on line studio.
peej
Carissa
bostonboomer
dakinikat
ecocatwoman
mablue2
Mama Lopez
peggysue22
quixote
skydancingguestblogger
Mona (aka Wonk the Vote)
Sky Dancing 
Recent Comments