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Observations 2011 06 12- the downside of altruism

The CEO of General Motors wants to tax gasoline an additional $1.00 a gallon.  Let’s think about that. The higher the price of gasoline the less one drives a car, and the less one drives a car then the less one  needs a car and the less cars are sold. So now the CEO wants a tax that will negatively impact the sales of the product his company produces.  Unless of course he is producing a product that nobody wants such as a very small high mileage car that needs a very high price of gas to justify its purchase.  This just shows you how screwed up an industry can get once the government gets its sinister claws in it.

There are those who think that money is evil, and that we should produce without consideration of monetary compensation.  Welcome to the blogosphere where a lot of very bright PhDs and a lot of  well read amateurs share some incredible ideas without any thought of compensation.  In fact the greatest advance in technology is in social networks and information sharing with little consideration of monetary compensation.

The problem is that this advance generates very little revenues which generates no taxes which is sorely needed to offset this ballooning deficit.  Unlike the automobile and the airplane which generated millions of jobs the internet enriches very few and encourages many to share valuable information for free.

Ironically the very people who think money is the root of all evil need the income the most to balance the budget and the new economy is not generating the revenue to fund their programs.  Neither tax cuts nor tax increases will generate the revenues needed from a new technology that has so many sharing so altruistically ( i.e.  “for free”)

We are addicted to a growth in revenues that is not being generated by the new economy.

Banking regulations are restricting a recovery more than we realize. I know very wealthy people who are unable to get a mortgage.  Some of the most experienced real estate investors are kept from buying the very distressed properties that so desperately need a buyer.  People who have never been a day late on a payment are having their credit lines cancelled and driven into near bankruptcy by banking regulations that make absolutely no sense. There is no left and right in this insanity, just right and wrong.

Weiner  is checking into sexting rehab. This may be the compromise that keeps his job. What are the odds of a relapse of some sort? His problem is less about his perverted digital juvenile behavior than the fact that he is just basically an incredible jerk.   I am not entirely confident that rehab can cure that.

Category: Economics, Politics

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