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BigBen · 04-11-2005, 12:45 PM

/Ben puts on his Economics Professor hat...

There are many competing theories about the price of a base commodity and its effect on the overall health of an economy. Macro-economists with fame such as Lucas, Barrow et al have postulated that when base goods increase in price, the living wage naturally increases to offset any changes in utility.

/Ben takes off Economics hat, puts on the reality helmet

Well, from someone who has sat through a lecture that pegged the price of gold, oil, bulldozers and BigMacs (I am 100% serious) together to explain that PPP (Purchasing Power Parity) is constant in the long-run, let me tell the reader of this post that it is hard to decide why Economists should not be rounded up and put into re-education camps.

When an economist tells you "don't worry, it all works out in the long-run" I hereby give you permission to kick him/her in the junk.

We are at 94.9 cents a litre here, but hey, the taxes levied at the pump allowed our government to introduce their "spend-like-you-are-on-a-fucking-coke-high" without much opposition because it is balanced. How can politicians possibly take credit for a windfall in tax revenue like that, as if they had something to do with it? Vote for BigBen, ladies and gentlemen, and I promise to do everything you want without raising taxes. All I need is to tax a base good until the levies account for more than the total cost of that good, and put taxes upon taxes so that a real increase of the base price of 1 cent will result in a bull-whip effect of about 15 cents.

No, I don't think you yanks are paying too little for gasoline, but I do think that your tax structure on gasoline is drastically different. As soon as your governments realize that there is tax dollars to be grabbed for at the pump, you guys are fucked.

As far as net importer/exporter thing is concerned, the world price will drive most of the price at the pump (multiplied several times for tax) simply because oil transports so well, is relatively stable (you can store it) and EVERYBODY USES IT. Think about it... when was the last time you used gold? How about Molybdenum? Well, the truck that shipped the gold to the store used OIL. The shit just keeps flowing.

If OPEC was to break up and they competed with each other instead of collude, premium would be at about 15 cents a gallon. Why does the world not cry foul at this oligopoly (Many buyers, very few suppliers)?

04-11-2005, 12:45 PM	#9 (permalink)
BigBen Comedian Location: Use the search button	/Ben puts on his Economics Professor hat... There are many competing theories about the price of a base commodity and its effect on the overall health of an economy. Macro-economists with fame such as Lucas, Barrow et al have postulated that when base goods increase in price, the living wage naturally increases to offset any changes in utility. /Ben takes off Economics hat, puts on the reality helmet Well, from someone who has sat through a lecture that pegged the price of gold, oil, bulldozers and BigMacs (I am 100% serious) together to explain that PPP (Purchasing Power Parity) is constant in the long-run, let me tell the reader of this post that it is hard to decide why Economists should not be rounded up and put into re-education camps. When an economist tells you "don't worry, it all works out in the long-run" I hereby give you permission to kick him/her in the junk. We are at 94.9 cents a litre here, but hey, the taxes levied at the pump allowed our government to introduce their "spend-like-you-are-on-a-fucking-coke-high" without much opposition because it is balanced. How can politicians possibly take credit for a windfall in tax revenue like that, as if they had something to do with it? Vote for BigBen, ladies and gentlemen, and I promise to do everything you want without raising taxes. All I need is to tax a base good until the levies account for more than the total cost of that good, and put taxes upon taxes so that a real increase of the base price of 1 cent will result in a bull-whip effect of about 15 cents. No, I don't think you yanks are paying too little for gasoline, but I do think that your tax structure on gasoline is drastically different. As soon as your governments realize that there is tax dollars to be grabbed for at the pump, you guys are fucked. As far as net importer/exporter thing is concerned, the world price will drive most of the price at the pump (multiplied several times for tax) simply because oil transports so well, is relatively stable (you can store it) and EVERYBODY USES IT. Think about it... when was the last time you used gold? How about Molybdenum? Well, the truck that shipped the gold to the store used OIL. The shit just keeps flowing. If OPEC was to break up and they competed with each other instead of collude, premium would be at about 15 cents a gallon. Why does the world not cry foul at this oligopoly (Many buyers, very few suppliers)? __________________ 3.141592654 Hey, if you are impressed with my memorizing pi to 10 digits, you should see the size of my penis.