Comments on: High Gas Prices and the Ripple Effect

By: Beware False Prophets: A Global Warming Lesson | Max Gladwell

Beware False Prophets: A Global Warming Lesson | Max Gladwell — Sun, 27 Jul 2008 22:07:20 +0000

[...] The first question for Lyman was concerning a carbon tax on beef. His response was that not only should there be a tax, but we should end excessive farm subsidies. Just as the taxpayer picks up a percentage of every gallon that Exxon sells, we also foot part of the bill for every Big Mac. As with energy, this has a direct impact on the environment, our health, and our economy because the true costs of raising and consuming beef–especially fast-food beef–are not factored into the price. A 99-cent burger should cost five to 10 times as much. Some of that would take the form of a carbon tax (or its methane equivalent), which is politically difficult, but just as much would come from ending corporate welfare, which shouldn’t be difficult at all. When meat becomes more expensive, people will have no choice but to look to cheaper (and healthier) alternatives. We’ve already seen this happen as a result of high gas prices. [...]

By: Energy Complex | Max Gladwell

Energy Complex | Max Gladwell — Tue, 24 Jun 2008 01:35:05 +0000

[...] continued prosperity, and anything resembling world peace. In other words, everything. The ripple effect of rising gasoline prices is an early warning sign…a shot across our collective bow…and [...]

By: Jason Welker

Jason Welker — Wed, 11 Jun 2008 06:13:23 +0000

What’s insensitive (and insane) is that America has failed to adequately TAX gas, quite the opposite of subsidizing its consumption. The only reason so many Americans are stuck with inefficient gas guzzlers is because they were so used to cheap gas for so long. Many economists have long advocated a higher (at least $1) federal gas tax aimed at weening Americans off the “juice”.

If we’d had a steadily increasing federal gas tax, then the current sudden and violent increases in gas prices could be softened by temporarily lowering the gas tax, slowing the increase in price of gas. Instead, the profits from $4 gas are going to the middle east and corporate America rather than our own government coffers, where it could have been used to subsidize public transportation and alternative fuel sources.

I do think it’s a bit unrealistic to expect Americans used to driving 20 miles to work to suddenly switch to bicycles… higher gas prices are a signal that it’s time to make changes. When those old trucks wear out they’ll be replaced with more efficient vehicles… when it’s time to move, people will choose to live closer to their work. Hopefully, in the long run, when gas prices do stabilize or fall, the government will smarten up and impose a tax that keeps the price at the pump ABOVE $4 and starts generating revenue that can be used to further reduce America’s addiction to oil through smart subsidies of alternative fuels.

By: Joey Lo

Joey Lo — Tue, 10 Jun 2008 09:30:02 +0000

Agree with your viewpoint regarding capital reallocation and efficient use of assets. Your post also reminds me of an article I read recently:

http://www.iht.com/articles/2008/05/30/opinion/edbowring.php

“Subsidies also must take at least some of the direct blame for the pollution which shrouds Jakarta, Beijing, Delhi and Kuala Lumpur, and indirect blame for shifting resources away from investment in schools and public health. Subsidized oil, for example, has shifted focus from public transportation to highway construction, with the automobile seen as a mainspring of industrial growth.”

Every coin has two sides. Oil subsides have helped many but have also created additional demand in many countries. Hence, to answer your quesiton on a *related matter*, a cut in subsidies may seem insensitive at first, but it’d help reverse the problematic issues stated throughout.