Thursday, January 15, 2004

Re: "Government dictates cannot move economics"

I'm sorry to inform the good doctor that we use tax policy, subsidies, government contracts, bond offerings, and especially THE FEDERAL RESERVE to dictate or "move" economics all the time - local and national. There's a yellow history book in DP's study. It tells one all about the gilded age. Perhaps DP should review what happens under a poor regulatory environment. One can surely attribute prosperity to entrpreneurship, but ignoring sound regulatory policy only tells half the story.

Let's use subsidies as an example of the benefits of artificially supporting the price of a commodity with taxes. In this case your income taxes support a price above and beyond the "real price" of a good. The subsidies allow purchase and storage of a bumper crop, so that in lean years (which often follow bumper crops) there is adequate feed in the system. It all works quite well to stabilize commodity prices so as to insure there's a wealth of corn to feed the tasty livestock on Turco's shelves. Evidently our republican administration is quite aware of this, having fully supported recent farm bills.

A more appropriate example (or analogy) is cigarette taxes. In this case, the price is supported way, way above the real price of the good. Many will testify from personal experience (author included) that the policy helps to reduce participation in an unhealthy practice. The secondary benefits of increased productivity should also be realized. On the other hand, freezing taxes, a la proposition 13, can have a negative effect on an entire industry, stifling growth by inflating real estate prices, thus restricting incentives to relocate. Even the paragon of business virtue, Mr. Warren Buffett himself feels that this is poor public policy.

Western Europe has been taxing petrol heavy for decades. I don't see revolution in the streets or heads on pikes. Instead I see more fuel efficient cars, and more mass transit. Mmmmm, how can this be?

Perhaps DP should be reminded that CAFE standards worked until industry lobbyists created loopholes - convenient blinders I suppose. So the law of unintended consequences has intended effects after all.

Instead of acknowledging and accepting what is patently obvious to an inductive thinker, DP launches on an unsolicited history lesson waxed with political side stories and contributory effects, but sorely deficient in the truth. The Irish starved because the potato crops failed! it was unsustainable! They relied on a single means of nourishment instead of diversifying and planning. Sound familiar? Jesus.

Then it's back to the walk the walk deal: please refer to AAS's previous posting, thank you. The author wishes not to engage DP in a stupid pissing match on who's lifestyle is ecologically sound, that's not the point. Please quit the silly bear baiting.

DP seems prone to embellishment. As for a "mind bending" depression, prove it! This writer knows that DPNY is not an economist. Furthermore, DPNY would have one believe that AAS advocates draconian imposition of $2.00/gallon taxes, immediate confiscation of wealth, and fair redistribution to the proletariat. DP will not paint AAS as an anarchist, communist, socialist, etc. The truth is that AAS has voted republican since his first election in 1980. It seems moreover that DPNY has diverted himself recently at a right fork in the road (after over-correction on the left shoulder) and has embarked on a libertarian-utopian 16-lane into an ugly place. And all the while the radio is blaring vehement diatribe about the pernicious plans of the "wacko environmentalists".

OK, that's enough. The author has stated his piece. And like O'Reilly, DP can have the last word.... Go ahead, dig yourself deeper.

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