The following is a conversation I have via email earlier this week. I was copied in a long list with some other folks. The original email was sent from what I suspect to be a mom and pop trucking company. Their emails will be presented in ALL CAPS (Because thats how I got them). The text of the missives has not been altered.

To random list of email addresses: GAS OUT............... THE OIL INDUSTRY IS OUT OF CONTROL THIS IS YOUR CHANCE TO DO SOMETHING ELSE. PLEASE PARTICIPATE AND SPREAD THE WORD. DO NOT BUY ANY KIND OF FUEL ON MAY 15TH. THIS IS A GAS OUT DAY SPREAD THE WORD ANY WAY YOU CAN, THIS WILL CAUSE A PINCH IN THE PROFITS OF THE OIL INDUSTY. THANKS

My Reply: In what way is the oil industry out of control and how does a single day of reduced profits followed by a day of expanded profits affect the oil industry? -Max

Their Response: WELL I GUESS YOU DO NOT PURCHASE 500 GALLONS OF FUEL EVERY OTHER DAY, AND IF THINK ABOUT IT FILL UP THE DAY BEFORE AND THEN AGAIN 4 DAYS LATER, DO YOU EVER COUNT THE AMOUNT OF SEMI TRUCKS ON THE ROAD??? NOW THINK ABOUT THAT ONE THE PRICE OF UNLEADED GAS IS NOW 4.33 PER GALLON IN SAN FRANCISCO I DON’T WANT TO PAY THAT MAX DO YOU??? IT IS A WAY TO SHOW WE ARE NOT HAPPY. IF YOU DO NOT WANT TO PARTICIPATE THAT IS COOL, THANKS FOR READING THE MEMO.

My Reply: Yipes, 500 Gallons. That is a lot of fuel, indeed. I don't spend nearly that much, about $250.00 or so a week for the maintenance truck fleet. But I'm still not clear on how the oil industry is out of control or how a one day stoppage of consumption will affect them.

I own a property management company with a construction and maintenance unit, so I am quite empathetic to the notion of rising prices on key business costs. Cement for example has quadrupled in price in the last two years. Copper pipes have doubled (or tripled I've lost track).Copper, Cement, and Fuel are all the same in the sense that all three are currently in high demand world wide. The higher the demand the higher pressure on prices for those goods. So I would think that its only natural that pipe makers, cement makers, and fuel makers charge more for their products when they are in high demand (and relatively low supply). To suggest otherwise would be to say I shouldn't raise rents on my apartments when they are in high demand. (or conversely, to lower them when they are in low demand).

Increased costs are certainly a hindrance to business (especially us small business owners) but my business responds to these increased costs by passing the cost onto the consumer. If the customer is unwilling to pay those increased costs then my business is simply not profitable and I should look to get out of it. I don't believe there is any natural right that I have to demand that someone be forced to reduce their profits for the sake of preserving mine. That would be like saying that I'm more important than anyone else (or at least I'm more important than my suppliers)

On the issue of fuel specifically, Fuel costs are indeed high but It seems the causes have little to do with so called "profiteering" on the part of oil companies. Rather it seems that increased world wide demand, a general shortage of sweet crude supply, increased risks associated with the area's of the world richest in sweet crude, and an oppressive fuel tax scheme are to blame.

If we apply your short term boycott strategy then I think your best bet would be to refuse to pay the federal gas tax portion of your next fuel bill. Really let those Fed's know your fed up. (hah, a pun! I kill me). Of course not paying taxes is a great way to get yourself noticed by the wrong people. However, in a few years my business will be indeed not paying that Federal Fuel Tax, and getting away with it. Plans have already been set in our company to convert our fleet to electric. Not only are we saving on fuel and not paying the gas tax, we get another important benefit. We get a PR bump by being super earth friendly. While tree-hugging isn't my cup of tea, it is popular these days, we might as well cash in. In fact We'll probably find some government grant program to partially compensate for the out of pocket cost for the whole endeavor. Perhaps all electric isn't viable for you, but plug-in hybrid technology is (works on trains).

On the issue of your proposed boycott, I wonder... It seems that the stakeholder that would be the most cost affected is not the intended target of Big Oil but rather the station owner/operator. While companies like Exxon-Moble do operate their own stores many stores are chains or locally owned and are not oil producers themselves. Will this boycott not hurt them more than big oil? A one day stoppage of purchases will affect them more profoundly than their fuel provider who probably gets paid on a weekly, not daily basis. The oil producer isn't likely to notice even a blip in profits unless you go to a "No Gas Week".

Further, all retailers (regardless of ownership) are regulated very tightly on how much they can mark up the fuel. Which brings up two points. 1.) The retailer of gas really doesn't care if you buy gas at all. The big profit maker for the retailer is the sunglasses and junkfood sales, where the markups are unregulated and customarily huge. 2.) If all gas retail is so harshly regulated then one key reason why fuel is so expensive is that retailers are not free to compete. Which is a key reason you'll never see a "sale" on gas. Perhaps then a better direction for your outrage is towards your congressman.

I do want to participate. I'm all about letting those who wrong us feel our discomfort. But is No-Gas Day the way to go? Perhaps May 15th should be Write-Your-Congressmen-About-The-Oppressive-Fuel-Tax-And-Harsh-Regulatory-Environment-Day. What do you think?
-Max

That was yesterday, I'm still waiting to hear back.

Labels: big government, economics, opinion

Happy Tax Freedom Day!

Today, April 21st 2007, is Tax Freedom day. Today is the day when the average citizen has worked off their federal and state tax burdens for 2007. The government has contented its self this year with a mere 16 weeks of your earnings.

Aren't you glad you could work 16 weeks out of the year for "The Man"? Look around at all the splendor the government provides you in return. Well maintained and regularly cleaned streets; a foreign policy predicated on making friends and allies around the globe; a top notch ferderal disaster response team; protection from virtually all crime; a transparent government run by politicians of the highest moral fiber; a strong stable currency; a good trade balance with foreign nations; a strong labor market that rarely loses jobs oversees; unintrusive and highly effective airport security; courteous and helpful civil servants who are eager to handle your specific request at the DMV, IRS, TSA, ICE etc; and reasonably priced health care are just a few.

Oh. Um. that 16 weeks (i.e. 1/3 of your pay) doesn't included the hidden tax of inflation (which is caused by the federal reserve using play money to buy the bonds we use to cover the deficit. but thats a whole different topic). Thats an additional two weeks.

Oh and one more thing. April 21st is the Montanan Tax Freedom Date. If you live elsewhere it might be different. Californians (just as random example) will need to work 16 more days (May 7th) to achieve 2007 tax freedom. But its worth it, right?

Further Reading: Tax Freedom Day - The Tax Foundation

Labels: big government, California, economics, Montana, taxes

There is a law that prevents any foreign person or entity from operating a domestic airline. I'm sure it's very well intentioned. We don't want the French or Chinese to buy up all our airlines. Nor would it be all that bright to have most domestic air service provided by an individual who may well hate Americans.

However... It should be my choice. If Aeroflot wants to give me non-stop service from Bert Mooney here in Butte to San Francisco International they should be allowed. I would find that a very compelling product. And the risks are mine. I'll take the risk that Aeroflot is in for the money and thus has a vested interest in my safe arrival.

Further... Freedom of the sky means greater peace. If Iran (just as an example) uses JFK as a hub for its substantial service provided to Americans then our Government is going to that much less likely to fabricate some reason to attack them. In the off chance Iran deserves a good ass whoopin' I would imagine that Americans would come out the wood work to neutralize any threat poised by Iran Air.

In any case... This law has ensnared Virgin Atlantic. Branson is a Brit and that disqualifies him from prodding us excellent service. I've never met Sir Branson (it's Sir, right?) but from everything I've heard I would imagine any airline he makes would be great. His intention (if I may be so bold as to tell you what Branson's intentions are) is to provide a safe, high-quality airline at whatever price point he thinks the market will bear. I doubt he has some evil scheme to position the UK for a first strike.

If you would like to see Virgin Atlantic air service and think the DOT should aprove them then write your Congressman, write your Senator, write your President and let them know!

Labels: airlines, big government, economics, global, opinion, politics

According to my nifty 2007 Farmer's Almanac temperatures will increase by roughly 3.7 degrees by the end of the century. However the distribution is far from even. The north will get the majority of that warming. Most warming will come in the form of night time temperatures and milder winters. So essentially Montana will be getting far nicer while the south, say New Mexico will be getting only slightly more unbearable. There is an upside for everyone. The milder temperatures in the north will reduce heating costs more than the increased need for air conditioning in the south. So energy demand from heating and cooling should diminish. The Old Farmer's Almanac 2007 got its information from a study done by Stanford Researcher Dr. Thomas Gale Moore and the U.S. Department of Energy.

Labels: earth science, economics, global, Montana

Pollution:
Ethanol blended fuels burn 20% cleaner. Which is good. However the real coup is that it removes the need for the additive MTBE. MTBE pollutes ground water, kills fish, corrodes fuel lines, makes fuel production more expensive, and reduces fuel efficiency. It was mandated as a way to decrease air pollution (which it kinda does); but was clearly a mistake.
1 point for Ethanol

Cost:
Ethanol adds 20 cents to the production cost of blended gasoline. The government gives a 51 cent a gallon tax break so that means a theoretical price reduction at the pump of 31 cents. Sound good. Oh except in order to meet the growing demand, corn production will need to ramp up even further. Corn subsidies will grow, and we will be taxes accordingly. So Its probably a wash cost wise. Well, that is unless you live in the corn belt and then its a boon. But I'm sure that the congressmen from those states aren't going to be influenced by all that money and will make the best decision for all Americans.
It's a tie - Still one point for Ethanol.

Fuel Supply Independence:
In my opinion not pissing off fuel producing countries is an excellent way to stabilize fuel supplies; but that being said, fuel source independence is nice. Since Ethanol is corn, and US policy is rigged for corn then its not a bad idea. Well not a bad idea until a massive crop disease hits corn and our entire fuel demand hits the open market again. Mitigating that; in the future ethanol might be replaced with cellulosic ethanol with can be made from a variety of things (read: non-volatile fuel market) such as sweet potatoes, switch grass and pineapple tops). Brazil is pretty much converted over to domestically produced ethanol. That probably helps out their trade balance immensely. Brazil deserves a whole post by itself.
So I'll call it 1/2 a point for a total of 1.5

Fuel Efficiency:
Uh oh! Ethanol will reduce fuel efficiency. An auto getting 20mpg will get 14.2mpg with an blended fuel. And that makes it more expensive per mile and increases the total pollution.
Minus two points for a total of -.5

So I guess ethanol isn't totally despicable. But why bother when biodesil our pure used vegetable oil is so cheap and easy? Here is a list new cars that can run on biodiesel. A dollar says that they are competitive with a similar class of hybrid on fuel efficiency and cheaper to buy. Not ot mention manlier.

Fun Ethanol Fact: the Model T could run on any mixture of gasoline or ethanol.

Factual information for this post is largely plagiarized from the Wall Street Journal. Which I recommend instead of watching the news.

Labels: economics, opinion, politics, science

From a historic perspective the United States it's self a super-state. Under the Articles of Confederation the Federal (super-state) Government had very limited powers. It was found lacking and there in the Constitution was born that gave the Federal Government more power. Further amendments gave the Federal Government ever increasing authority over the States. The power to regulate trade, the power to tax income, and so on were not in the original draft of either document. In fact the Revolutionary War was fought so that the colonists(or at least the wealthy ones) could operate without that kind of government meddling. The Federal Government is now so powerful that's its almost impossible to view constituent states as autonomous. Its only out of precedent that we refer to them as states at all.

Super-states seem to be the trend of the future. Many states in Europe have joined the European Union. The EU is not a full fledged super-state. The laws aren't entirely universal, The EU doesn't tax it's member state populations (directly) and so on. It does have a standardized currency and the EU Defense Force is a growing possibility. The EU's biggest obstacle to becoming a super-state is the total lack of European identity. Most Europeans still identify themselves with their individual state. Osama Bin Laden wants an Islamic Super-State that would incorporate numerous sovereign states all around the Indian Ocean.

Apparently the Executive branches of the United States, Mexico, and Canada are also fond of the idea. Without congressional approval to do so the states have been secretly planning the creation of a "North American Union". PAUSE: I'm not one of those OH MY GOD! BUSH IS IN LEAGUE WITH THE ALIEN ILUMINATI TO CREATE A NEW WORLD ORDER! kinda guys. But oddly enough this group of foil-headed morons might be on to something. UNPAUSE: The Administration now admits that through the NAFTA office they have created the Security and Prosperity Partnership (SPP). This organization will be a super-state to Canada, Mexico and the US and be a forerunner of The North American Union. The SPP will over see trade, customs, border security and do more of that "fight against terror" you've heard so much about. Orwell is spinning is his grave.

For those of you who would like to be a citizen of the North American Union, I'd like to point to the most super of would be super-states is the United Nations. The UN manages to be one of the largest collection of clowns, profiteers, despots and the otherwise despicable. Why? because nobody in some far flung state cares much about anybody else in their far flung state (ours included). I have difficulty imagining that someone from Quebec gives a rip about how sales tax affects your families budget. Further, I'm sure that a foolproof solution for Mexico City is perfectly applicable for Los Angeles (well ok, I might give you that one). And while I’m sure La Paz has lots of nice people who need help; I'm plenty busy trying to prevent the local government from tearing down a historic building right next door. Oh, and one more: are you comfortable with the law enforcement of all three of these states sharing your personal data? Listening to your phone calls? Arresting and charging you?

• Offical Government Information on the Security and Prosperity Partnership
• LibrityPost.org's opinion
• Largely unrelated opinion piece about the rift in EU and American perspective from the Balkans

I pledge allegiance /
to the flag /
of the North American Union /
And to the Federalist Super-State Regime /
for which it stands /
Three nations /
under The Creative Designer /
Irrevocable without a civil war/
for security from terror /
and central planning /
for all. /

Whew! That might be the craziest I've ever been.

Labels: economics, foreign affairs, global, politics

I've decided I'm against corn. To much food comes from corn; corn syrup, corn oil, corn starch and all modified, partially-hydrogenated, high fructose variants. Also remember that your chicken was probably feed a corn mixture, as well as your feed-lotted cattle. So if i had to guess 70% of what's in the supermarket has corn in it.

Cob Corn... MMM Tasty. especially on the BBQ next a tri-tip; and then all messy with butter. I digress.

The other corn isn't probably all that good for you. Humans need something like 40 nutrients. Only a few can be found in corn. We need a wide variety of food sources. With so much food being from corn I don't think we are getting it. Further, dependence on a single food source really sucks when a crop disease springs up.

All this extra corn is processed corn. I think manufacturers choose it because its cheap filler. I think it's cheep because its heavily subsidized. So in a sense our tax dollars are being used to promote corn over other food stuffs. Are you as excited as I am about that possibility?

And then there is ethanol. Which is a whole post by it's self.

Amuse yourself with this experiment. Don't eat anything with corn, corn syrup, corn starch, corn oil, corn feed meat, dairy from corn feed livestock, or any other corn product for a week. I bet you'll eat something corn by accident.

Labels: economics, fitness, opinion, politics, science

Good news. There is a bill in the Senate to send us all a $100. It's a relief check for all the high prices were paying at the pumps. Whahoo. I was going to be homeless but now I've got enough money for 2.1 tanks of gas (gas is cheap here). Of course I'm sure the bureaucracy involved will cost $25 per check but hey. Oh, and SURPRISE! In the bill there is a portion of the bill that would allow drilling in AANWR, but I'm sure that's an oversight. Another potion of the bill will suspend federal gas taxes for 60 days. Which is cool. But why not say, Forever? If it's not so critical that we can go without for 60 days then, do we need it at all? Or how about a permanent 1/6 cut in the tax (60/365 is roughly 1/6)? Yeah! 3 cents/gallon (18 cents/gallon x 1/6)! What a budget breaker. Now I can afford a stamp every time I get gas! One might say that this is an attempt to bribe the US citizens into allowing drilling in national refuges. But I say look on the bright side. Perhaps this is a new trend. Perhaps from now on when the government tries to hose us at least they will send us $100 and a stamp first. Read more about this at http://www.suntimes.com/output/news/gascheck27.html Of course I'm way behind the ball on mentioning this but I don't have TV so sue me.

Labels: economics, opinion, politics

I have an anecdote:

A nice older lady was checking me out at Wal-Mart. And by that I mean she was ringing up my purchases not as in she was scoping my goods. Near the end her lazy manager, draped over a cash register, spoke. "Doris" (or whatever her name was) "turn off your light for lunch.". Doris was delighted and promptly turned out her number light, indicating her lane was closed. She grumbled a bit about how late her lunch was coming. "Those great Wal-Mart labor practices..." I said. Doris chuckled, "Well its better than when i was worked at Safeway. They never gave me a lunch at all.".

I'm a firm believer that anecdotal evidence is the weakest kind, but it is amusing none the less. Perchance those boycotting Wal-Mart should instead not shop at Safeway.

Labels: culture, economics, opinion, politics