Gas Tax Holiday a vote-buying sham

Both Clinton and McCain’s call for a gas tax holiday would make a neglible impact on your wallet and is nothing more than an election year stunt to win votes.

Clinton campaign spokesperson Geoff Garin said in a conference call this week that the proposal would save each driver $70. The Clinton campaign did not respond to our request to clarify how it arrived at that figure. But the non-partisan American Association of State Highway and Transportation Officialsestimates that the total savings for the average American motorist works out to about $28; for a two-car household, that would be $54.

And there’s no reason to assume that oil companies would pass the 18.4 cent tax cut on to consumers, although I’m sure they’d lower the price somewhat to mitigate bad PR.

With the supply of gasoline pretty much fixed (at least in the short term), the increased demand triggered by the price cut will lead consumers to bid up the price of gas. Len Burman, of the nonpartisan Tax Policy Center, says eliminating the federal tax won’t actually lower the price of gas because "supply constraints will push pump prices near their pre-holiday levels." He goes on to warn that "If that didn’t happen, there would be shortages." The libertarian Cato Institute’s Jerry Taylor agrees that a short-term gas tax holiday will have "little impact on pump prices."

You can get the full economist lowdown at Who will reap the benefits of a gas tax holiday? I clipped part of her conclusion below, but you should read the whole thing.

Hillary Clinton’s proposal is particularly stupid, in my humble opinion, because it tries to get the money back from the oil companies with a windfall profits tax. Tax incidence is tax incidence: if the oil companies can make consumers pay most of the excise tax, then probably consumers can stick them with your windfall profits tax too.

Explaining why health insurance companies should compete

Posted here because I couldn’t do a good job explaining this at dinner last night: Why is competition between health insurance companies useful?

This is not the world we live in, but it is the world we should aim for and I am more than willing to consider how government might get us there.  (Mandating greater price transparency is but one step.)  But if we institute a single-payer system, or highly regulated mandates, we will never have much chance of arriving in that world.  Ever.  We will have a fairly static sector with high coverage levels but rising costs long term and less innovation.

Hillary using Bush style “Town Halls”

Next Up for the Democrats: Civil War

It wasn’t an accurate statement, historical or otherwise. It was a lie, and a bigoted lie at that, given that it branded Hispanics, a group as heterogeneous as any other, as monolithic racists. As the columnist Gregory Rodriguez pointed out in The Los Angeles Times, all three black members of Congress in that city won in heavily Latino districts; black mayors as various as David Dinkins in New York in the 1980s and Ron Kirk in Dallas in the 1990s received more than 70 percent of the Hispanic vote. The real point of the Clinton campaign’s decision to sow misinformation and racial division, Mr. Rodriguez concluded, was to “undermine one of Obama’s central selling points, that he can build bridges and unite Americans of all types.”

Overview of Democratic Health Plan

On Brad Delong’s blog Richard Eskow Talks to David Cutler:

David Cutler: I’d like to start with a general comment…. Two possible reasons why people don’t have health coverage are usually given. One is that the uninsured are gaming the system. The other is that they can’t afford it and don’t know where to get it. Most of the literature suggests that the explanation is mostly the latter. That means the single biggest thing we can do to help the uninsured is to make coverage affordable and accessible.

That’s why all the Democratic plans focus on removing excessive profits where they exist, improving information technology, and so forth. All the plans do those things, although I think the Obama plan does the most.

The mandate argument is: You must buy something %u2013 but I’m not going to tell you what it is, how much it will cost, or where you’re going to get it.

It comes down to this. You’ll never get someone to buy something if it’s not affordable and not accessible. People just don’t do it.

Jump over and read the whole thing.

Reason 457 Why I’m not voting for Hillary

She’s willing to garnish people’s wages if they refuse to buy health insurance even though they can afford it. Hmm, i thought the government would coerce us into a socialized health care system by raising taxes to cover the cost.

In a day dominated by familiar stump speeches, Hillary Clinton made news by saying she might allow workers’ wages to be garnisheed if they refuse to buy health insurance. She has criticized Obama for pushing a health plan that she says would not require universal coverage.

Pressed on how she would enforce her mandate, Clinton said: “I think there are a number of mechanisms” that are possible, including “going after people’s wages, automatic enrollment.”

Demand cell phone competition

Who really loves their cell phone provider?  I moved from Sprint to T-mobile 3 years ago because you can use unlocked phones and they use a standard that’s recognized abroad.  In practical terms, this means when we had to replace Staci’s phone, we simply moved the SIM card from her old phone to the new one and it worked, it also moved all her contacts.  When we were in Germany for the World Cup, I was able to make calls without a hassle.  But I’m still locked into T-mobile – I can’t get say, oh, an iPhone and use it with T-mobile.  Nor can I take my current phone and switch to AT&T. 

The cell-phone providers love this lock in, because it lets them keep rates high and customer service low.  You can’t vote with your wallet, especially with early termination fees hanging onto your contract.  Congress is stepping in with an eye to reform the system.  Helpfully, Consumers Union has set up a simple form you can use to tell your representative that you want real cell phone competition.  Please take a minute to fill it out and send a message.

In this market, companies rarely compete based on price and service;  instead they lure new consumers with complicated and sometimes misleading offers, then use early termination fees and handset locks to stop you from voting with your feet.

The cost of Illegal immigration

The Congressional Budget office released a report on the costs of illegal immigration for state and local governments [HT: Marginal Revolution]  Unfortunately, the report is only available as a PDF file, but its not overyly long, approximately 13 pages in length.  It estmiates the spending by state and local governments due to undocumented immigrants in 3 key ares: Education, Health Care, and Law Enforcement.  Unlike the key paragraph highlighted by MR, the actual document is a lot less clear in its conclusions about related spending.  And in fact, state under the Revnues Versus Spending section:

Most of the studies that include both revenues and costs for multiple programs show that state and local governments spend more on unauthorized immigrants than they collect in revenues from that population

Thanks to Sandy for leading me to realize that Marginal Revolution had fallen off of my feed reader.

US Citizen Deported to Mexico

It’s a scary thought, and something only a few years ago I thought I’d only read in the Onion, but I just read an article about a US Citizen, born in California, that had been wrongly deported to Mexico.  Think it can’t happen to you?   Short of always carrying your Passport, or Citizenship Certficate, if you don’t look or sound ‘merican, how can you prove your a citizen?

On Tuesday, the renewed questions flew from a packed room of journalists: Did ICE cross-reference Pedro’s statements with whatever documents exist related to a prior arrest and conviction? Were any efforts made to establish whether he suffers from a mental disability? Did he knowingly sign a voluntary deportation order, or was he somehow coerced? How can this scenario be prevented in the future?

Best line from the Hit and Run discussion: "Finally, the chilling predictions put forth in Cheech Marin’s Born in East LA are coming to pass."