instead, what i am proposing is that one take advantage of the current price rise to institutionalize current changes in behavior, and use taxation and stockpiling to guarantee that a politically feasible portion of the current price rise will, in real terms, be permanent.
another way of putting it: i think there is a social benefit in squashing the notion that prices will ever return to their previous low.
On 6/12/08, Jim Devine <jdevine03 at gmail.com> wrote:
> what about imposing a permanent $2 per gallon tax on gasoline, sort of
> like in Europe? That would guarantee high demand for alternatives w/o
> undermining the incentive to produce the stuff (since so much of the
> price represents "something for nothing" scarcity rents that arise not
> from the cost of production but from the temporary and/or artificial
> and/or long-term scarcity of the item).
>
>
> Robert Naiman wrote:
> >
> > i saw an item recently about how consumers were finally shifting their
> > behavior in response to the increase in gas prices - changing the cars they
> > buy, getting rid of cars, switching to public transportation.
> >
> > it made me reflect on the thought that from a orthodox economist's point of
> > view, there's no environmental policy that can match correct prices. yammer
> > about conservation til you're blue in the face. move prices enough, and keep
> > them there, and if people believe that the change is permanent, they will
> > move.
> >
> > part of the story about lack of investment in alternatives to oil has been
> > that the price of oil was so low, that the alternatives weren't profitable.
> > and even when the price of oil reached the theoretical tipping point,
> > investors were still skittish, because these are long-term investments, and
> > if the price of oil falls again you're going to take a bath.
> >
> > so what if the government could guarantee these investors that the price of
> > oil in the united states will never fall below a certain level?
> >
> > suppose the government were to announce today: from now until forever, a
> > gallon of gas will never sell in the united states for less than two
> > dollars, and a barrel of oil will never sell for less than fifty dollars, in
> > 2008 dollars. if the market price falls below that, we will push it up
> > through taxation and stockpiling.
> >
> > it wouldn't do anything to help consumers today. but it wouldn't hurt them
> > either. now people are groaning about $4. if it were $2 they'd have a big
> > party.
> >
> > but it would assure investors that any investment that's profitable at $50 a
> > barrel will always be profitable.
> >
> > folks have adjusted to the idea that gas is more than $2 a gallon. why not
> > put that change in behavior in the bank for all time?
> >
> >
> >
> >
> >
> >
>
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> >
>
>
>
>
> --
> Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
> way and let people talk.) -- Karl, paraphrasing Dante.
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