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Wednesday, April 30, 2008

I Just Vomitted in my Mouth a Little

Hillary Clinton, ever the supreme political actress and hack, decided she'd hammer the differences between her and Sen. Obama regarding the gas tax holiday she proposes (that Obama rightly denounces) by showing up at a gas station here in Indiana with a blue collar guy in a white Ford pick-up (borrowed seemingly just for the photo-op). Nevermind that with her plan, that guy would have only save about $1-$3 on his purchase (depending on tax incidence), and nevermind that that money would be diverted from investment in our failing infrastructure, and nevermind that any benefits to consumers that might be gained from a tax cut would be at least partially passed on to big oil companies. Nevermind all that because Clinton got her photo-op. She cares....

... but note she didn't care enough to help pay for the guy's gas despite her riding in his (borrowed) truck for free

Tuesday, April 29, 2008

Hat tip to Mankiw who writes:
"The NY Times reports:
Senator Hillary Rodham Clinton lined up with Senator John McCain, the presumptive Republican nominee for president, in endorsing a plan to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for the summer travel season. But Senator Barack Obama, Mrs. Clinton’s Democratic rival, spoke out firmly against the proposal, saying it would save consumers little and do nothing to curtail oil consumption and imports.

... Of course the real credit goes to Austan Goolsbee, Obama's economic advisor. Clinton and McCain's proposal to suspend the gas tax (like an increase in the gas tax) would do little to change consumer behavior and do a lot to distort relative prices at a time where we need stability. Further, a suspension in the gas tax would likely serve just to further line the coffers of oil importers with increased revenue.

Thursday, April 17, 2008

Coase Theorem Smackdown

Kudos to Mike Moffatt for doing a whole series of articles debunking the validity of the oft cited Coase "Theorem." I shouldn't really call it a theorem since a theorem, in it's most used definition, is an idea or set of ideas that can be shown to be logically true that has value outside of itself. But as Mike makes clear, the theorem basically assumes the answer it wants, and then of course arrives at the answer. The Coase theorem is a crock and is based on a series of loose assumptions that mainstream (re: conservative) economists use to try to defend perfectly free market capitalism.

Tuesday, April 15, 2008

McCain Economics

Sen. and Republican Presidential Nominee Apparent, John McCain has unveiled some economic policies yesterday. Among them: a summer freeze on the federal gas tax (dumb), halt all (except that which involves killing people of course) increases in discretionary spending for a year to conduct a government audit of programs (dumber).

About half of the discretionary budget is 'national defense,' a government-defined function area that roughly corresponds in common parlance as 'military.' However, this category does not include foreign military financing, security assistance, and other programs commonly thought of as military. Other types of discretionary spending include the budget for education, many health programs, and housing assistance. (

So, McCain wants to put a bandaid on our energy problems (a bandaid that at best just helps the oil companies), and he wants to tell educators, health specialists, and people hurting from the housing crisis that they get no more money this year - no increase in funds to account for the increasing inflation and burden.

Well, what can you expect from a guy who doesn't like economics.

Wednesday, April 2, 2008

My Letter to Indiana Senator Evan Bayh

Dear Sen. Bayh:

I am a 28 year old male with excellent credit and a FICO score above 700. I've been a loyal customer to Capital One for 5+ years now and have consistently paid my credit card bills on time and usually well over the minimum payment required. I originally had a rate of 7.9%. That shot up to 12.9% late last year. Capital One says that was due to "competition." Fine, I can understand that. But apparently in the last year I missed 2 payments by a few days and so they decided to increase my rate from 12.9 to 26%! That is ridiculous. I didn't notice that they did that until today, and I've been paying that finance charge for the past 3 months. I'm not a 26% risk. I've since called them and talked them down to a lower rate, but let's get real here. Capital One says it's "industry standard." They also told me that the rate jumps if the computer says so. That's inexcusable. If I, a successful person with an education and excellent credit is given a 26% rate on a whim, imagine what is happening to the less fortunate in our state and country. I'm asking you to clamp down on the special interests of the credit card industry and start writing legislation to regulate this out of control industry. In this time of credit crisis, we can ill afford to continue standing idly by while credit card companies dictate our financial lives. People NEED credit. They know this - and they misuse that to their advantage. Please help us with this issue.

Garth A Brazelton