OK…I’ve been not only a bear in this market, selling on any strength, and holding much more cash than normal - like 50%, but actually going out on a limb and talking about it. (see previous posts.) Anyway…today, as the price of oil surges once again above the $100 per barrel mark, only confirms what I believe to be another nail in the coffin to the recession argument.
 These ’stimulus’ packages, and tax rebates, and other ’shots in the arm’ are no match for the clubbing that the American consumer is getting when gasoline is over $3.50 a gallon.
All the talking heads on Bloomberg, and CNBC, all the comments from Paulson, and Bernake, add up to nothing. These people need to level with the American people by telling them that the party of borrow and spend is OVER…Finito, Fertig !
There’s a big jug of Kool Aid that must be consumed. The Kool Aid is the acceptance by the American people that ‘entitlement programs’ and the endless spending by the government is unsustainable. Spending must be cut dramatically, and taxes in some form need to be raised.
 May I suggest the following: A 10% tax on gasoline. This would push the American people to get off oil consumption. The use of proceeds would go towards reducing the debt, and research for alternative energy sources.
 Next blog will talk about how to solve the immigration problem. There’s money the be made there too.
 Sorry to sound so mercenary, but sometimes reality sucks!
Walter Schubert
Posted in Commentary |
It would be great to get off oil consumption - and just the fact that Bush called it an addiction is a nice first step (admitting an addiction is always the first step). So I agree that we need a great deal of investment in alternative energy. But investment does not result in immediate progress. Even with investment, we are decades away from escaping our addiction.
So is a 10% tax on gas the answer? (What are we, European?) First you talk about the ”clubbing” that the consumer will get with high gas prices, and then you want to make them higher? Adding more fuel to the recessionary fires already burning is not the best way to increase investment in alternative energy.
What will be interesting to watch is what will happen to oil prices as the United States’ recessionary cycle spreads to other oil-importing markets (Europe, China), decreasing oil demand and putting downward pressure on oil prices.
Comment by Kelso20 — February 19, 2008 @ 4:43 pm
ok ok…you’re right…good point about 1st step in recovery is to admit the problem re addiction. And the 2nd step as far as I’m concerned is cold turkey! There is no methadone for oil addiction. Also…I don’t think the planet has ’decades’ to spare with greenhouse gases turning the glaciers and polar caps into white water rapids.
Its a questions of time.
Lastly, I don’t believe that the German’s are the only people who can stomach $5 a gallon in gasoline.
Respectfully,
Walter
Comment by Walter Schubert — February 19, 2008 @ 5:11 pm
You’re right that we may not have decades to spare on the environment issue (though estimates still range on this issue…), but you can’t be serious about going cold turkey on oil! Maybe you can lead by example on that one? Good luck commuting into the city… Are you allowed to ride a bike across the GWB? haha
Comment by Kelso20 — February 19, 2008 @ 5:30 pm
Very Funny Kelson20….I will check out the rules on riding a bike - and a horse over the GWB
Comment by Walter Schubert — February 29, 2008 @ 8:58 am
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