Market Surge

Dow posts best 5 days in 75 years, up 17%.

Obama hasn't done anything yet, really, except putting people in future positions, but it is increasing investor confidence. And when the market level is entirely based on emotion and not actual economics, a little confidence goes a long way.


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Flash forward

Dateline November 28th, 2040: President-elect Waller promises to prohibit the population from using "-gate" at the end of anything to denote its status as a newsworthy scandal in the making.


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Obligatory Thanksgiving Reflection Post

At 5:06 AM this morning, as I slunk quietly in with the demonic horde to my local Best Buy electronics megastore, I thought to myself that what I would be thankful for would be if I simply survived. Having heard the news that earlier that morning a man had in fact been trampled to death at a Long Island Wal-Mart, you can imagine that I, the stereotypical anti-shopper, was feeling a little anxiety as I meandered back to the television section to buy a remarkably cheap item for my brother-in-law. Twice shoved out of the way by frenzied consumers, I eventually made it to the back, and to my item of choice. Once I had the item in hand, it actually became sort of a game, trying to find my way to the front, then being directed into a hairpin theme-park line composed of rows of refrigerators. I purchased the item and was gone: in and out in less than 10 minutes.
When I returned home, I finished my cup of coffee, put the item away, hung up my coat, and climbed back into my warm bed next to my snoozing wife.
I was thankful to be home, to be in a warm bed, and to have my wife there waiting for me.


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Taxing gas

Gregg Easterbrook proposes, via Allan Sloan, that the government put a tax on gas that held the price at $4 a gallon.

Why not, he supposed, tax gasoline in such a way that it will always cost the equivalent of $4 (the amount rising in sync with inflation), and at the same time abolish CAFE standards. This is the sort of transformational insight Washington needs more of. A higher gasoline tax could be used to retire national debt or to lower Social Security taxes, which matter more to average people than income taxes. If the public knew that gasoline would always cost at least $4 per gallon, super-complicated MPG regulations would no longer be needed, because free-market forces would take care of the rest -- most buyers would choose lower-horsepower higher-mileage cars of their own free will. Those who were willing to pay the piper could purchase whatever kind of vehicle they pleased. Detroit wouldn't have to spend any time or money twisting arms in Washington, and could focus its energies on car-making rather than on regulatory lobbying.

He goes on:

Either the national debt or Social Security taxes would decline. Federal bureaucracy would shrink. What's not to like?

I think Gregg is missing the fundamental idea of market transformation lag here. Increased gas prices did not just affect commuters driving to work every day, nor is the environmental impact of gas usage limited to those commuters. One of the major consumers of fuel in this country is the commodities industry that trucks its goods primarily via semi-trucks and diesel powered trains across the country.

$4 gas simply wasn't instantly sustainable. The price had outrun gradual inflation, and although some would argue it was still behind the equivalent price of gas in the 60's, you can't ignore that the economy was built around a set price of gas and would have adjusted to gradual inflation, a sudden spike in price was an aberration, not a correction. Surely there will be a day when gas will cost $4 (and $5 diesel), and the global economy will adjust, but summer 2007 wasn't that day.
Second, you can't instantly switch from your gas guzzler to a hybrid. Many consumers, like carpenters, electricians, and various contractors are reliant on their pickup trucks to carry their tools of the trade. Many people are locked into 5 year plans to pay off their current SUV that they can't even give away. $4 gas was hurting the U.S. economy, and although it sure made hybrids and electric cars seem super neat-o, well, they've always been super neat-o. But we can't all just up and buy one today.

I appreciate the idea of setting a price on gas and using the extra tax revenue to pay our bills. But what happens when the Federal Budget becomes used to getting several hundred billion dollars a year in tax revenue and market factors drive the price of gas to $4.25? Suddenly there is no tax revenue from gas...where does the government make up the loss on their balance sheet?


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Joe Biden, President

Among all this hoopla about Obama's allegedly fake birth certificate, etc. etc., I want to educate the masses on why there is no way McCain could possibly be the President. The electoral college, who votes in the President based on the popular vote, does not cast their ballots until Dec. 15. Sen. Obama is still Sen. Obama until then, he is not technically elected. If Justice Thomas were to decide Obama is not a U.S. citizen and declare him ineligible to be President, then the electoral college, which was heavily Democrat in this election, would choose someone else. My guess would be Joe Biden.
But the electoral college is required to vote for the party's Presidential and Vice Presidential candidate that they are bound to by the popular election this past November 4th. Unless John McCain switched to the Democratic Party, he has a 0% chance of becoming President.


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Bipartisanship NEVER works

I keep seeing this idea on the TV news or on blogs.

I guess I don't see what possible motivation Bush has to involve himself in a smooth transition. From a partisan standpoint, the Democrats have dealt a cruel blow to the Republicans via the election results; shouldn't the Republicans be a little bitter?
And if Obama succeeds in recovering the economy, that would further the Democrat agenda, and darken Bush's legacy as a terrible President. I highly doubt Bush and Obama will ever be chummy.

Other than "serving the common good," I don't see the motivation for Bush here.


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NASA, HIRE ME!

Dear NASA,

Embarassed for the engineers who designed the faulty urine recycler that cost you $250 million, I have designed and propose to you a urine collector that will work for 20 years, cost less than $500 to build, and less than $300 to service and replace. Best of all, I guarantee this machine will work, time after time, year after year. Because I love my country and low taxes, I pass this design along to you for free.

Here's how it works:
1. Astronaut puts urine into balloon container.
2. Balloon container placed in decompression chamber.
3. Decompression chamber releases gases into space, decompressing it.
4. Urine evaporates spontaneously due to low pressure.
5. Hand bellows pumps urine through filter that removes particulates into second balloon in compression chamber.
6. Second chamber returned to cabin pressure.
7. Pure water spontaneously condenses.
8. Astronaut drinks pure water.
9. Periodically change filter.

I have many other obvious ideas that would save you a fortune. Give me a call some time, I'd be happy to save you more money.


Sincerely,

TAE


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