Thursday, June 26, 2008

Reading the Paper

NY Times is full of good stuff today.

Francis Wilkinson has a blog post on McCain and his religious views. Did you know he's a member of a Southern Baptist church in Phoenix?
There's much talk in the article about McCain's lack of something called a "faith walk," and how that draws the ire of conservative "evangelicals" like James Dobson, who believe that a President should be an outspoken evangelical. McCain made remarks about his being a POW in Vietnam in a sermon that drew criticism from an anonymous evangelical friend of the author:

"I think it was important, a little bit for the stability factor, that it wasn’t God who was going to perform a miracle, end the war and bring us home. It was men. It was Caesar. I think the majority of those guys felt the way I did but we just had some, just as people turn to faith healing and that kind of stuff, we had some of that. A lot of times I would pray for strength and I think sometimes I got it. Pray for patience to get through the next minute when things were bad. I just don’t think it’s fair to expect too much out of what is basically not the Lord’s business."

Apparently McCain "segments" his life and the role of Christ too much for evangelicals. Dobson sounds like he'll not vote for President either way, he rejects McCain and said yesterday that Obama has a "fruitcake" interpretation of the Bible in response to a speech Obama made, that I personally think was fairly intelligent.

Roger Cohen writes an op-ed from Istanbul in which he encourages Obama to visit a mosque. Obama has shied away from Muslims because much of middle-class America thinks he is one thanks to misinformation campaigns by H. Clinton and even some Republican groups.

At Obama’s old school in Jakarta earlier this year, an establishment scurrilously described as a madrassa” in all the innuendo, a gentle principal showed me the large mosque and small Christian prayer room. He then invoked the words emblazoned on the coat of arms of Indonesia, the world’s largest Muslim country: “Unity in diversity.”

That’s what I saw among the kids at the school, 85 percent of whom are Muslim, and the rest Christian. That’s also what America’s supposed to be about, not religious slurring and stereotyping.

Yet, because he’s named Barack Hussein Obama, and because his Kenyan grandfather was a Muslim, and because his commitment to Israel has been questioned, and because the U.S. Rorschach test is Muslim-menace mired, he’s had to tread carefully.

Americans are fairly ignorant on Islam and its practice (or more often non-practice) in much of the East. There's an interesting article today about persecuted Iraqi Christians who have had to pay a "jizya" tax to exist in their Muslim communities, the jizya turned into an extortion racket and pretty soon extremists start kidnapping priests for ransom.

Nicolas Kristof, the Times' excellent foreign correspondent, writes about Iraqi refugees in Jordan, and how they're hated and a drag on the local economy. They're not being schooled, there are no jobs, the families just sit there and are bitter.

"We broke Iraq, and we have a moral responsibility to those whose lives have been shattered by our actions. Helping them is also in our national interest, for we’ll regret our myopia if we allow young Iraqi refugees to grow up uneducated and unemployable, festering in their societies...

Iraqi refugees are hard to count but may now amount to 8 percent of Jordan’s population of six million. The average Jordanian family, which opposed the war in the first place, is now bearing a cost that may be as much as $1,000 per year for providing for the refugees.

In contrast, last year the United States took in only 1,608 Iraqis. European countries have done better, but they believe that America created the refugee crisis and should take the lead in resolving it...

If we let the Iraqi refugee crisis drag on — and especially if we allow young refugees to miss an education so that they will never have a future — then we are sentencing ourselves to endure their wrath for decades to come. Educating Iraqis may not be as glamorous as bombing them, but it will do far more good.

Have you seen the movie Charlie Wilson's War? I watched it last week. Remember at the end when Wilson is frustrated and denied $1 million to rebuild a school in Afghanistan after previously getting Congress to pay over $1 billion to support the Mujahideen's war against the Soviets? That's what eventually let the Taliban take root after a lack of civil authority and funds led to a civil war. We should heed that warning with how we deal with Iraq and its refugees.
I saw an Iraqi general in Mosul yesterday talking about how the problem in Iraq's hot spots isn't military anymore, it's economic. Young people without jobs quickly become angry and disaffected. The NY Times has some video interview questions with Iraqi teens.

So, yes, our government is in a bad long-term fiscal situation. The wars in Iraq and Afghanistan are already costing us over $1.6 trillion. But, we shouldn't start wars to liberate countries without thinking of what the consequences will be down the road. Hubris costs money.

Conservative David Brooks writes that about the only thing Bush may have gotten right in Iraq is the Surge.

Every personal trait that led Bush to make a hash of the first years of the war led him to make a successful decision when it came to this crucial call...the more honest among the surge opponents will concede that Bush, that supposed dolt, actually got one right. Some brave souls might even concede that if the U.S. had withdrawn in the depths of the chaos, the world would be in worse shape today. Life is complicated. The reason we have democracy is that no one side is right all the time. The only people who are dangerous are those who can’t admit, even to themselves, that obvious fact.

How to end this post? Well, Paul Krugman, a flaming liberal Democrat, writes about how speculators are not the cause of the high price of oil. Obama wants to go after the speculators anyway. There are so many discouraging economic articles out there critical of both McCain and Obama today that I feel like I have to choose the lesser of two evils.

I guess I'll write a post on that later.

Wednesday, June 25, 2008

Childrens books

I like to read to Elias every waketime. Our favorite books so far are Pat the Bunny by Dorothy Kunhardt and Fluffy Chick and Friends by Priddy Books. Those are touch-and-feel books.

We also have a large collection of Dr. Seuss books, all of which were given to Elias. My mom doesn't like Dr. Seuss and refuses to read them to grandchildren. I didn't have many Seuss books growing up, I think I only had Green Eggs and Ham. I did most of my Seuss reading at the dentist's office and such. So I've been trying some of them out on Elias, learning the stories.

My college pastor would often work Dr. Seuss references into his sermons and lessons. Many have an inherent moral, and that is what I'm interested in. What does the author want to teach my child?

One reason I'm kind of sensitive to this area is the fact that some childrens books like The Berenstain Bears contained overtly un-Christian messages. I grew up on the Berenstain Bears, probably had most of their books. Nancy Pearcey, co-author of Total Truth, discovered a Carl Sagan message in The Berenstain Bears' Nature Guide. Pearcey writes:
Not long ago, I picked up a nature book for my little five-year-old about the Bernstein Bears, the highly popular picture-book characters. In this book, the Bear family invites us on a nature walk, and as you read you suddenly come across a two-page spread with a startling slogan sprawled across both pages with capital letters: Nature is "all that IS, or WAS, or EVER WILL BE."

Have we heard that somewhere before? The words echo the well-known line from Carl Sagan's PBS show "Cosmos": "The cosmos is all that is or ever was or ever will be." Sagan was echoing the classic Christian liturgy ("as it was in the beginning, is now, and ever well be"), and what he was offering was nothing less than a religion of naturalism--where nature takes the place of God as the ultimate and eternal reality. What Sagan did for adults, the Bernstein Bears are doing for young kids.

Kids are sensitive to stories, have vivid imaginations, and don't know how the world works. In their minds there could very well be a "Whoville" and "thneeds." Books and bedtime stories are some influences on their impressionable minds-- at least they were for me. So, some of the Seuss books are kind of strange. They don't contain any overt stuff like above but some of them contain a part or two that I wish was worded differently. I like some more than others.

Green Eggs and Ham is about trying new things--try it, maybe you'll like it. I think it helped me have a mature palate for food growing up, as I'll try and eat just about anything. So, I can see us using that positively.

Yertle the Turtle and Other Stories has some great stories about the dangers of pride. I could immediately think of Biblical equivalents to each of the stories. There's a fairly ambiguous statement about freedom in one of the stories.

However, The Lorax is a pretty depressing book about the overuse of resources. I could see me using it to teach him about taxing negative externalities. I could see other parents using it to teach their sons that capitalism is only destructive in the end. That seemed to be the overarching theme.

The Cat in the Hat, Horton Hatches the Egg, and The 500 Hats of Bartholomew Cubbins have happy endings but lead to some fairly odd questions: Is it ever okay to open your home to a stranger and let him trash it when your parents aren't home? Do people really hunt elephants and aim "straight at his heart?" Is it really okay to kill a small child by pushing him off the castle tower?

I kind of skip over parts I don't like when reading some books out loud. Like a whole page of a weird sorcerer chant, for example. Maybe I'm way too sensitive and shouldn't worry about it even when Elias is old enough to understand. But, I take my responsibility as spiritual protector of the household seriously. However, I also want to encourage his imagination like Dr. Seuss does... ah, the dilemmas I'll deal with as he grows.
We've yet to get a good children's Bible. I bought a Genesis children's book from a door-to-door salesman last week but the artwork looks a little creepy.

So, I'm going to say that right now BusinessWeek and The Economist are probably my preferred readings so far, after Pat the Bunny and Fluffy Chick. That way he and I both learn.

Thursday, June 19, 2008

Benefits of High Gas Prices

From Foreign Policy magazine today.

1. Mass transit is booming.
"Americans took nearly 85 million more (mass-transit) trips in the first three months of 2008 than they did in the same period in 2007."

2. Lower obesity rates...
"According to Charles Courtemanche of Washington University in St. Louis. His research found that, for every dollar increase in the average real price of gas, overweight and obesity levels in the United States would decline by 16 percent after seven years. His study also attributes the outward expansion of American waistlines between 1979 and 2004 in part to falling prices."

3. Fewer Accidents
Dramatically fewer accidents were reported over Memorial Day weekend in most states.
"Ian Parry, a Senior Fellow at Resources for the Future, an energy think tank, says that while the effect would be modest, some people 'will realize they can drive less aggressively' and conserve gas mileage. According to fueleconomy.gov, a U.S. government Web site, 'each 5 mph you drive over 60 mph is like paying an additional $0.20 per gallon.'"

4. Shorter commutes
"Worry about rising gas prices has encouraged workers to move closer to their jobs to cut costs and find alternate ways of traveling to work. And for many of those that still drive, less-packed roads are actually producing shorter commutes"

5. The biofuels craze
"More of the world’s fuel is coming from renewable energy sources instead of Middle East oil drums... Critics of biofuels point to studies indicating that the increasing diversion of cereal crops for biofuel production is driving up food prices around the world. Supporters counter that the answer isn’t to give up on alternatives to gasoline, but to develop 'next-generation' biofuels (think: switchgrass and algae) that don’t interfere with the food supply. And without biofuels, 'the [oil] prices today that we are experiencing could be much higher,” says Fatih Birol of the International Energy Agency.'"

(HT: Greg Mankiw, of course).

Wednesday, June 18, 2008

Charts

(HT: Greg Mankiw, as usual).

Someone has set up a new Ross Perot website where he's warning us of fiscal dangers. I would recommend clicking this link to go to the slide presentation, powerpoint charts with some commentary. Note: I didn't listen to the presentation, only read the slide commentary. I would start at slide 9 as the first 8 are sort of disingenuous because they don't measure things in terms of GDP.

You can interpret slides 9-11 differently than Perot. He is looking at the overall average of government spending as a % of taxes and taxes as a % of GDP. But, the trend is clearly downward and so a moving average would be more honest.

But, slides 12-35 are great and illustrate the huge problem that is coming at us headlong. Non-discretionary government spending is getting ready to balloon as baby-boomers retire and the economy isn't likely to grow fast enough to keep up.

Perot's solution? Well, there really isn't one, and that's the refreshingly honest truth. He suggests a comination of 4 painful options:
1. Restructuring entitlement programs (politically deadly for whichever candidate says it first).
2. Raise payroll and income taxes (also politically deadly, though Obama favors a payroll tax increase for the highest income-earners).
3. Borrow more money each year to make up the shortfall (this is a bad option that no one is recommending..it's partly how we've gotten into this mess to begin with).
4. Cut discretionary spending even further. (Politically deadly).

#4 is politically deadly because every candidate gets lambasted for not giving enough funding to autism research, global warming research, rebuilding New Orleans, building more schools, taking care of our troops medical needs, improving your local tourist attractions and fill in the blank with whatever you wish you could ask the government to give you.

What America needs most are the very things that the opposing parties will use against whatever elected official gets it done in 10-second soundbytes trying to get that official ousted from office. That's what makes me very angry.

A combination of 1,2, & 4 need to happen VERY soon. Who are you going to trust to give America the straight talk about it? I'm trusting John McCain to do it, and I hope he doesn't disappoint.

Either way, my parents' generation has really ruined things for my son's generation. By 2030, I hope my family is living in Estonia.

Tuesday, June 17, 2008

Book Review (#14 of 2008)

I Give You Authority: Practicing the Authority Jesus Gave Us by Charles H. Kraft.

Kraft is a former missionary to Africa who, like I did, found out that he was ill-prepared on the mission field for all the demonic activity around him. He hadn't been taught much about demonic influences in peoples' lives, including fellow Christians. His church hadn't spent much time looking at instances in the Gospels where Jesus' disciples cast out demons, and certainly had never practiced it.

Kraft later returned to school, studied Scripture, got a better understanding of who he was in Christ, and started a healing/deliverance ministry. He's written a lot of books on issues ranging from cultural anthropology to seeking deep emotional/spiritual healing. This book is about understanding that the stuff we see in the New Testament is still happening today, right here in America, and most Christians just don't want to think about the supernatural.

The book is filled with stories of deliverance of churches, people, entire neighborhoods from demonic strongholds and powerful influences. It explains our role as Christ-followers and how to better engage in critical spiritual warfare. It encourages pastors to pray over their churches, pray for every seat in the congregration, every musical instrument played; engage in warfare to free your flocks from the influences that are crippling the church.

The personal challenge to me was reaffirming my role as a husband/father is to be the spiritual leader of our household, that means I get to be the point man for spiritual attacks. I need to take seriously the things that I allow into our lives, and always seek protection from satanic influences. I need to be on the offensive against sin in our lives and cancel any rights that demons might try to claim to our lives.

I wish I'd had this book before serving in an animistic Muslim-context country. Westerners, and often the Gospel had never been to the places I was walking, and it's clearly been satan's ground for thousands of years. We saw lots of demon-influenced people, animistic sacrifices and rituals that only served to worship satan. Southern Baptists don't talk much about going on the offensive against these things, and little training is given to IMB missionaries on how to deal with it. Some were concerned that we'd end up like the seven sons of Sceva (Acts 19), but Kraft explains that Jesus gave his followers authority that the sons of Sceva never had. Often, missionaries are just told "it's out there, but controversial, so learn to deal with it on your own."

The secular world seems very interested in the supernatural and demonic. There are a lot of shows on different networks about ghost hunting, and documentaries of people staying in haunted houses, etc. The Church as a whole doesn't seem to want to say much about this, or wants to dismiss these activities as nothing, and this has always bothered me. This book doesn't mention the secular fascination, but reading it will give you a different perspective on these shows and the supernatural activity they're seeing.

I give this book 4 stars out of 5, and would love to start a group study on it.

Monday, June 16, 2008

The Perfect Father's Day?

If Father's Day is partly about sitting around and watching sports, then this was probably a perfect day.

#1. Dale Earnhardt Jr. finally snaps the 76-race winless streak. Luck finally went his way. I imagine thousands of fathers were cheering on NASCAR's biggest star with their sons while thinking of Jr.'s father. Joni got teary-eyed, but I wasn't quite there. However, I did get emotional at the post-race celebration when Jimmie Johnson came over and gave him a big hug. I am quite relieved that Jr. got the monkey off his back, and now he can just focus on winning The Chase. He really is a fantastic driver.

#2. U.S. Open. I occasionally watch golf when Tiger plays well. Golf is probably the most intense sport not named Chess. The feel-good story was Rocco Mediate who almost beat him before Tiger pulled a great putt to send it to an 18-hole playoff. With a win, Mediate would be the oldest guy ever to win his first major; he also had a great attitude all day. Tiger is so intense and so crazy good at the game, you can't help but watch. However, I feel that the PGA courses probably need to be exercised of demons after every tournament because of the way Tiger curses the greens, the rough, the trees, the holes, his clubs, all day long.

#3. NBA Finals. I've forgotten to watch all 5 games of the Finals thus far, probably because it usually ends past my bedtime. When Rondo gets something like 8+ assists, the Celtics always win. When Rondo struggles, they don't win. A quick check of the box score tells me it was Rondo who had the real "garbage" game and not Kevin Garnett. No matter, Boston will win in Boston.

Sunday, June 15, 2008

First Father's Day

I gotta say it feels great to be a daddy and I'm quite thankful to be one. Eli is always a joy for me to be around even if he's fussy, or needs a new diaper, or whatever. Life is definitely better with him around.

Friday, June 13, 2008

On oil prices

The debate in the news the past few months seems to be how much of the increase in the price of oil has been by speculative investors, primarily an increase in pension and index funds investing in oil futures and commodities, and how much is a supply/demand thing.

Here's what we know:
Global demand is increasing.
Oil supply responds slowly to price increases.
An increasing number of investors are investing in commodities as a hedge against a falling dollar and rising inflation, driving up the prices of those commodities.

The Economist had this article in last week's issue, and I recommend reading it. It asks "Is it 'peak oil' or a speculative bubble? Neither, really."

It explains why it's harder for a speculative bubble to arise in the oil market. People can't hoard oil like they can other goods. The increase in investment from places like index funds are relatively small compared to how large the market for oil is. The article explains the problem with symmetries of the different grades of oil and gasoline. Diesel is in short supply whereas there is a glut of heavy heating oil on the market.

The article concludes it is essentially a supply/demand problem. New fields and new methods of extracting petroleum are slowing rolling out, but it takes time. Methods like converting coal to oil require that the price be greater than $75/barrel for such operations to be profitable. Thus, many such projects are only just getting underway.

"In the short run, neither demand for nor supply of oil is very elastic. It takes time for people to replace their old guzzlers with more fuel-efficient cars, or to switch to jobs with shorter commutes, or to move closer to public transport. By the same token, it can take ten years or more to develop an oilfield after its discovery--and that does not include the time firms need to bolster their exploration units."

Elsewhere in the issue is the issue of government fuel subsidies. Some countries (like China and Venezuela) lose money by subsidizing gasoline. This pushes the price artificially low and increases demand (ie: we move down the demand curve). So, cheap gasoline in China raises the price for the rest of the world. China can afford this policy because of their currently large budget surplus.

Interestingly, I read that prices dropped today after OPEC members began questioning the "unjustified" price of oil. So, if the answer to why oil is so high is mostly "pure supply and demand" then how far will the price drop when any speculative bubbles present burst? 33%? 10%? 1%? That's the question.

In any case, don't expect prices to fall quickly anytime soon.

Thursday, June 12, 2008

I got a job

After at least 6 months of looking, praying, waiting, and pure frustration, I have officially found a job! Starting in August, I will be an instructor of economics and finance at Southwest Baptist University in Bolivar, MO.

A brief testimony:
I started looking for jobs when we were in Moldova, never got much response. Many government agencies went into a hiring freeze due to budget cuts so I never heard back from many entry-level positions I felt confident I could get. Many places in the U.S. frown on having overseas experience (because they rightly anticipate you wanting to go back overseas).
Joni was 5 months pregnant when we returned to the States without a home, job, or health insurance.

Fortunately, my parents had a place in East TN where we could live rent free.
I applied for countless jobs all over the country, and had some serious interviews here in Knoxville. But, everything fell through or I wasn't considered. We got by on the financial and prayer support of friends and family, and I worked various part time jobs. Tennessee also has a generous medicaid program, particularly for pregnant women. This was a very difficult time, and difficult to understand why God would arrange things so.

I am a proud market economist who has griped about government social programs. So, as we became reliant on social assistance I can say it was probably the most humbling experience in my life. In the past 3 years I can say that God has taught me not to be so dogmatic in upholding various doctrines.

Finally, the day I was dreading the most came: The day we brought Elias home from the hospital with no job, no plans.
The morning we brought him home I got an email from the economics chair at Baylor, someone who has always been willing to help me out and gave me great freedom to teach while at Baylor. He'd been contacted by SBU and they were looking for someone with my type of credentials to fill a teaching position.

SBU quickly contacted me and I had a couple phone interviews within days. They flew me to their campus last weekend, and I spent a couple days interviewing and getting to know the area. I have accepted their contract offer and we'll be moving to Bolivar in July sometime.

I am excited about God's provision for us. I think maybe God put us in this difficult situation to teach us humility and reliance upon him. I've been thankful to be unemployed as Joni has needed my help with Eli, and I've been blessed to spend so much time with him.

The job is much different than I'd expected, and will pose new challenges--like being required to start working on a doctorate. Bolivar is much different than any place I thought we'd end up. One of my friends overseas is an SBU grad and says theres no other place on earth he'd rather raise a family, and that means a lot.

So, please pray for our move. We'll likely be moving from East TN back to West KY then on to SW Missouri. I have a lot of decisions, like do we rent or buy? Where do I pursue a PhD, and what economic activities can I get involved in at the university and in Bolivar?

(BTW-- one big advantage of living in Missouri are the low gas prices. If you look at this map in the NY Times a couple days ago, Missouri has the lowest fuel prices by far. However, it has also been one of the states hardest hit by the price increases. )

Thanks so much for your prayers and words of encouragement these past several months!

Wednesday, June 11, 2008

More on Gas Prices- What not to do

Occasionally, someone will forward me one of those "Here's how to lower gas prices!" emails or invite me to join a Facebook group for the same cause. The latest one I got advocates boycotting Exxon and Mobile gas stations. The "logic" is that if you boycott a couple of the big stations, the prices will come down and then every other gas station will lower their prices as well.

Here's why this won't work. This is Principles of Micro and I'd expect every student in an intro to economics class to be able to illustrate this.

Let's suppose in Town X that there are 4 gas stations. An Exxon station, a Mobile, a BP, and a SuperAmerica. Due to perfect competition, all of their prices are equal: $4/gallon. The supply/demand curve looks like this: Now, let's assume all of the residents of Town X receive the same email and band together to boycott the Exxon and Mobile stations. They're basically changing their preferences. The demand curve for Exxon/Mobile gasoline shifts to the left. People are demanding less at any given price: This would drive the equilibrium price to $3, let's say. But, the opposite effect happens at the BP and SuperAmerica stations. The demand curve shifts to the right as people line up for their gasoline instead of Exxon/Mobile:I didn't put a price in the illustration, but $5 would be a logical assumption given the above effect and assuming elasticities (slopes of the lines) are the same.

So, now all the residents of Town X are paying $5 for BP and SuperAmerica gasoline. The Exxon/Mobile stations down the street have lowered their price to $3.* What does everyone start to do?
Well, as people start to shift to the Exxon/Mobile stations, the demand curve for Exxon/Mobile again shifts to the right-- back to $4. As customers leave the BP/SuperAmerica stations, the demand curve shifts to the left, back to $4. And, in the end, we're back to our original equilibrium. The net effect of boycott is 0:

It's always funny, these emails have been forwarded millions of times over the years and they say something like "This idea comes from an engineer at Halliburton," or "a former gas station owner who wants you to know the truth!" etc.


* It's more likely that the Exxon/Mobile stations wouldn't lower their price to $3, they'd just go out of business. I wrote a post last year on gasoline "price gouging". It's pretty funny because people were calling $2.85 gas expensive back then.

Gas stations don't make much on gasoline, just a few cents on the dollar. They make more off of refreshments and in-store sales. The price for July delivery of a gallon of unleaded gasoline today is $3.41. Taxes get added to that, and you have to factor in marketing costs and other expenses the gas station has to pay to operate, so there has to be a markup on the gasoline for there to be a profit. If the station is a big one, it can buy in bulk and get a lower price, but mom&pop stations are being squeezed out of business.
I used a rule of thumb of 76% to calculate what gasoline prices would be on average, and it's worked pretty well.
So, in July I'd expect the national average price of gasoline to be $3.41 / .76 = $4.49.

Tuesday, June 10, 2008

When Reality Bites-- Gas Prices

I have a few thoughts on gas prices.

1. We were warned, we should have seen this coming. Beijing alone sees 20,000 new cars every month. Other East/South Asian countries are rapidly growing, and with middle class prosperity comes a car and a car demands gasoline. Even if much of the most recent increases are a purely speculative bubble, we knew that some day soon enough oil prices would rise high due to rising world demand and an ever decreasing world supply of oil.

2. I've said repeatedly on this blog: We pay less at the pump than most other nations. According to NationMaster, U.S. gas prices are #102 in the world (out of 140 countries) and well below the world average price. This is partly because our government doesn't tax gasoline as much as European countries do.

3. We should have been paying $4 for a long time now. If we really care about easing congestion, reducing pollution, and improving fuel efficiency among manufacturers, a consumption tax is the most efficient way to do this. That's why thousands of economists and politicians are giving their support to the Pigou Club. The taxes could pay for improved road and transit systems, reduce the ballooning federal debt, or pay for reductions in payroll taxes.
As Charles Krauthammer wrote the other day (HT: Greg Mankiw, of course):
Unfortunately, instead of hiking the price ourselves by means of a gasoline tax that could be instantly refunded to the American people in the form of lower payroll taxes, we let the Saudis, Venezuelans, Russians and Iranians do the taxing for us -- and pocket the money that the tax would have recycled back to the American worker.

4. Suing OPEC is probably the dumbest idea I've heard, it made me angry to hear Republicans getting blamed for higher prices on the evening news tonight simply for refusing to vote for bad legislation. Sen. Hutchinson was on the mark when she said an energy bill that says nothing about production and simply says "Sue OPEC!" creates a windfall tax on oil companies, and studies price gouging will do NOTHING to help reduce gas prices.

5. Since Americans have been dumb about piling up personal debt, maybe these gas taxes will cause us to think and do some math. Here's a website that will help you calculate if it's worth it to drive to a gas station where the price is cheapest (beware the popup ad). Yesterday, I figured out that even though gas is 14 cents cheaper at a station 8.5 miles from here, it cost me more to drive there and back than it would to go to my expensive neighborhood station.

5a. Suggestion: Google your car's MPG if you don't know it. Halve it if you plan on running the A/C and heavy electronics (note: this might be a myth, but you do get some reduction in your mpg if you run the a/c). Then, use Google Maps to get the distance from your house to your favorite destinations. Then, calculate how much it costs you to drive to them. Reschedule your day to make your driving to these places more efficient.

6. On ABC News last night they profiled a man who converts gasoline engines to diesel. Diesel engines can run on vegetable oil, get more horse power, and double the gas mileage of an unleaded gasoline engine. A few months ago we heard of a man who was getting free used cooking oil from restaurants at the end of every day. He was filling his tank with it, essentially like free gasoline, and getting great mileage. Hopefully, Detroit will start producing more diesels and more people will figure out how to switch to vegetable oil. That will help reduce demand for gas and reduce the price.

7. Buying a hybrid probably won't help. You'll probably not save enough on gas to make it worthwhile for the higher price of a car. And then your battery will need replacing, costing you another $10,000.

8. We have bad energy policy. We subsidize corn ethanol, a very energy inefficient product, which is helping drive up food prices all over the globe. We (well, Democrats actually) put trade barriers up against importing cheaper, more energy-efficient sugar cane ethanol from Brazil. We don't hardly look at switchgrass and other efficient possibilities...

9. September 11 didn't change our oil-guzzling ways, even though so much of the money we pay for oil indirectly goes to fund Al Qaeda through the $billions$ that the Saud family give to Wuhabbist organizations. Our President goes and begs the Saudis to increase production. For me, that was the real low point of the past month. "Your highness, please produce more of the good we desperately need. We know the money you'll make will eventually go to train terrorists who will later kill our soldiers, but please make more." Why all veterans and families of veterans who have died to fight the war on terror aren't outraged at this, I'll never understand.

10. Department of Energy produced this chart. What do you think has fueled economic growth from the 1980's to today?
Must have just been Reagan/Bush tax cuts, right?

10. Because of the above, I'm very pessimistic about the future. With the expected exponential increase in federal outlays further increasing the debt, oil and other resources becoming more limited and harder to attain with an entire American infrastructure built on low fuel prices.

Example: I look out at my neighborhood and the houses are wide and spread out. The suburban neighborhood is miles away from the nearest towns and the only means of getting there is by car. There is no public transit. Even if you live in one of those towns, you might live 10 miles from work and have no quick way of getting there besides by car. You don't own a car, you don't work. If you can't afford gas, you don't go to work either.

That's America. We don't have efficient railway systems, for the last 50 years it's been cheaper to transport by 18-wheeler so we have developed interstate highways. Only medium/large cities have bus systems, but those don't travel everywhere. Do you even know where your nearest Greyhound station is if you wanted to get to another city cheaply? European nations have great infrastructure to absorb high prices of gasoline. They've made it that way with consumption taxes. Unfortunately, America isn't nearly as well prepared. The NY Times had a good article on how rural America is having problems coping with higher gas prices. How does someone from Podunkville go to the Big City without a car if Greyhound doesn't even come nearby?

Our entire society just isn't built to sustain $4.50/gallon gasoline.

And with governments already strapped for cash, an overhaul of mass transit systems into rural areas just isn't going to happen. Unless we quickly take a different route (Using alternative fuels, junking our SUVs, using mass transit, etc.) then consistently high prices will end up crippling us. If we don't change our ways, demand for gasoline won't fall quickly and so neither will the price.

We built this nation on cheap gas, now what do we do?

On Saving

I'll probably post some depressing thoughts on gas prices in the next couple days.

Today, I wanted to point everyone to David Brooks' column. Brooks writes about a new study by the Institute for American Values that shows how the last 30 years have seen Americans seduced into debt by the prospect of wealth. For most of the life of America, thrift was something espoused as a value. Now that idea is archaic. Some excerpts:

The deterioration of financial mores has meant two
things. First, it’s meant an explosion of debt that inhibits social mobility and
ruins lives. Between 1989 and 2001, credit-card debt nearly tripled, soaring
from $238 billion to $692 billion. By last year, it was up to $937 billion, the
report said...


State governments have played a role. They aggressively
hawk their lottery products, which some people call a tax on stupidity. Twenty
percent of Americans are frequent players, spending about $60 billion a year.
The spending is starkly regressive. A household with income under $13,000
spends, on average, $645 a year on lottery tickets, about 9 percent of all
income. Aside from the financial toll, the moral toll is comprehensive. Here is
the government, the guardian of order, telling people that they don’t have to
work to build for the future. They can strike it rich for
nothing...

Credit card companies have played a role. Instead of
targeting the financially astute, who pay off their debts, they’ve found that
they can make money off the young and vulnerable. Fifty-six percent of students
in their final year of college carry four or more credit cards.


Congress and the White House have played a role. The
nation’s leaders have always had an incentive to shove costs for current
promises onto the backs of future generations. It’s only now become respectable
to do so.


The report recommends:
Foundations and churches could issue short-term loans to cut
into the payday lenders’ business. Public and private programs could give the
poor and middle class access to financial planners. Usury laws could be enforced
and strengthened. Colleges could reduce credit card advertising on campus.
KidSave accounts would encourage savings from a young age. The tax code should
tax consumption, not income, and in the meantime, it should do more to encourage
savings up and down the income ladder.



Some would argue of the explosion in credit card debt and low-interest loans began in the late 1970s as a result of high oil prices giving Middle Eastern sheiks and governments a lot of money with no place to go but to Western banks which recycled the money in the form of aggressive lending. There just weren't enough customers for all the money that was out there, so banks began targeting future income-earners like college students.

Couple this house of cards on a new round of high oil & high gasoline prices, and we might have a seriously bad decade coming. More on that later.

Wednesday, June 04, 2008

On Delivery

Elias is two weeks old and I thought I'd jot some thoughts down about what it was like in the hospital when he was born. Hopefully, this will help some other expectant fathers know what to expect. Here's me reading a BusinessWeek to him. He's been fascinated with the economic fallout of the subprime crisis.
I compare the birthing experience/hospital stay to a transatlantic flight. I don't sleep on airplanes; when I start to doze off my body suddenly panics and jerks awake. So, when I arrive at my destination I've usually been awake well beyond 24 hours. The flights usually have their flurries of stressful moments when you're running through a foreign airport trying to make your connections on time. On an airplane you have an uncomfortable seat and don't leave your area much other than to use the restroom. You get a decent hot meal but it fills you up and you just feel lethargic.

This is what the first 30 hours or so at the hospital was like for us. We got there just after midnight, so I had been up all day already. Elias was born at 2:24am, which was a flurry of stressful activity. After that, we spent 48 hours there and I slept in a less-than-comfortable chair that folded out to a bed. The food was good, but it filled me up and I only left the room a couple of times so I felt lethargic. At night there were lots of beeps in the hallway and other noises like the A/C that sounded just like an airplane, and on occasion I would awaken and actually think that I was on a long flight.

When it was all over the stress, the lack of sleep, and the new surroundings (ie: Elias) made me very emotional, which is often how I feel when I arrive in a country overseas. I suddenly well up in tears about everything from the color of the sky to how happy I am just to be there. That wears off in a couple days. I've also had to adjust to a routine and deal with a jet-lagged feeling from lack of sleep.

But, like experiencing a new culture, it's all been great fun and I wouldn't trade the new experiences for anything.