Gas Prices Will Not Increase and Your Fairy Godmother Will Turn Your Hummer into a Prius

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The Lieberman-Warner-Boxer cap-and-trade climate change bill disappeared from the Senate last week, but not before certain senators uttered, let's just say, some untruths about what its effects on energy prices would have been. For example, Sen. Barbara Boxer (D-Calif.) assured the public, "There is no increase in gas prices."

http://www.fuelnews.co.nz/wp-content/gallery/xmas/cartoon.gif

True, the bill does not directly increase gasoline prices, but the whole point of a cap-and-trade scheme is to ration carbon dioxide emissions. Such rationing aims to increase the price of fossil fuels relative to carbon neutral sources of energy and thus encourage consumers and energy producers to shift to higher-priced climate-friendly energy. In other words, the bill Boxer was championing would in fact increase the price of gasoline and she surely must know that.

As Competitive Enterprise Institute analyst William Yeatman correctly notes:

Under the Lieberman-Warner "cap and trade" scheme, industrial users and suppliers of energy would have to buy the right to emit greenhouse gases from an annual government-run auction, whereas now these emissions are free.

But businesses would not simply absorb higher input costs; instead, they would pass along the burden to consumers. That's why, in a report released last April, the Congressional Budget Office says that "most of the cost of meeting a cap on CO2 emissions would be borne by consumers, who would face persistently higher prices for products such as electricity and gasoline."

Yeatman then cites a number of estimates for what gasoline prices under a cap-and-trade scheme might be:

  • The independent analysis by Science Applications International Corporation (SAIC) predicts gasoline prices will increase between 60% and 144% by 2030.
  • The EPA estimates that the Lieberman-Warner bill will increase fuel costs an additional 53 cents per gallon by 2030 and by $1.40 by 2050.
  • An independent study by NERA Economic Consulting estimates that the price of motor fuel will rise by 48 cents per gallon by 2030.
  • The Energy Information Agency (EIA) estimates gas prices will increase anywhere from 41 cents per gallon to $1.01 per gallon by 2030.

To protect the climate it may be necessary to impose a cap-and-trade scheme or carbon taxes, but please don't insult our intelligence by lying about its effects on gasoline and other energy prices.

Disclosure: As far as I know, I am still an adjunct scholar at CEI, but its president and my friend, Fred Smith is notably unhappy about my views on climate change policy.

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  1. Is the cartoon Australian? Odd juxtaposition of “Dollars” and “Litres”.

  2. Nigel Watt: Astute observation–it’s actually from New Zealand. But still appropriate don’t you think?

  3. the bill Boxer was championing would in fact increase the price of gasoline and she surely must know that.

    If you were referring to almost any other sitting Senator, I would agree. Boxer, however, may very well believe everything that she said. She’s 18 different ways of stupid.

  4. Obama’s calling for a windfall profit tax on oil companies.

    Does he think this’ll lower prices?

  5. She’s 18 different ways of stupid.

    I think that’s what her supporters call her… I think the real number of ways is legion.

  6. industrial users and suppliers of energy would have to buy the right to emit greenhouse gases from an annual government-run auction

    So this is not a cap-and-trade system; this is a tax auction. George Will was right, this sucks. A straight-up carbon tax would be better.

  7. At midweek, McConnell stunned Democrats by forcing the reading of all 492 pages of the bill into the record – an almost unheard of move that took 8 1/2 hours.

    There should be a Constitutional amendment to force those lazy bastards to do this every single time.

    (OK, that’s not realistic. But still, I have no sympathy having our Congresscritters actually have to read the legislation.)

  8. So this is not a cap-and-trade system; this is a tax auction.

    It’s a flat-out money grab. Any situation which can raise revenue will eventually be modified into a form which raises the most money, rather than doing what it was supposed to.

    The parasitic greed of Washington is astounding.

  9. P Brooks: Hey, I said that well before Will did. 😉

  10. At midweek, McConnell stunned Democrats by forcing the reading of all 492 pages of the bill into the record – an almost unheard of move that took 8 1/2 hours.

    At which point the congress noticed that its job would actually be hard if they actually did their job.

  11. It’s really quite appalling. These fuckers are totally willing to pass legislation which will result in increased prices for just about everything, as prices are already rising for fuel and food.

    The only good thing about it might be that there will probably be a backlash as people who were getting by, but not by a lot, suddenly find themselves not getting by.

  12. The only good thing about it might be that there will probably be a backlash as people who were getting by, but not by a lot, suddenly find themselves not getting by.

    Epi –
    Do you forget that people actually think that congress has the ability to lower prices and improve their lot in life through legislation?

  13. MP said,

    “At midweek, McConnell stunned Democrats by forcing the reading of all 492 pages of the bill into the record – an almost unheard of move that took 8 1/2 hours.

    There should be a Constitutional amendment to force those lazy bastards to do this every single time.”

    Actually Downsize DC has put together a bill to do just that.

  14. For example, Sen. Barbara Boxer (D-Calif.) assured the public, “There is no increase in gas prices.”

    Well, if Barbara Boxer says it, it must be true.

    Anyways, didn’t some EU study find 2/3 of carbon credits were fake?

  15. Is it wise to point out that their policies will increase prices? Won’t they just legislate price controls and give us shortages, instead?

    Oh, and stunts like McConnell’s remind me of why I was always proud of him as a KY senator, even if I never agreed with half of his positions.

  16. These fuckers are totally willing to pass legislation which will result in increased prices for just about everything, as prices are already rising for fuel and food.

    Clearly, re-education hasn’t worked on you. You only have two alternatives, poverty stricken uber-statism or Waterworld. Choose wisely.

  17. Sorry, Ron- I missed that one.

  18. A straight-up carbon tax would be better.

    No tax, i.e. freedom, would be even better. But who I am to say? I’m not a cosmotarian, so clearly I’m too dumb to matter.

  19. Can’t we all just agree that these figures and suppositions and predictions are being pulled right from the asses of their respective pimps? None of this has any basis in reality.

  20. Sen. Barbara Boxer (D-Calif.) assured the public, “There is no increase in gas prices.”

    She’s either a liar or dumber than a fence post. Of course she’ll get re-elected.

  21. If McCain hadn’t swallowed the AGW hypothesis hook, line and sinker, with the concomitant “we must do something, this is something, ergo . . .” reflex, this election would now be over.

    Obama could be forced into the corner of either (a) abandoning most of his base by giving up on state control of the climate or (b) pissing off 70% of the country by supporting horifically expensive state control of the climate at a time when $4.00 gas has everyone in a tizzy.

    Because both candidate are in the tank together on this issue, it won’t be aired, and Congress will go sailing ahead with some uber-stupid scheme that may well get them turned out in 2 years, but will still be an economic disaster.

  22. Do you forget that people actually think that congress has the ability to lower prices and improve their lot in life through legislation?

    No. But the connection between any carbon legislation and immediate price increases will be impossible for any but the stupidest to see.

    Clearly, re-education hasn’t worked on you. You only have two alternatives, poverty stricken uber-statism or Waterworld. Choose wisely.

    Clearly Waterworld, as it at least has Jeanne Tripplehorn.

  23. Nice post, Ron. By the way, what is truth?*

    *Only a joke. Please don’t fume. It only adds to the pollution.

  24. Obama could be forced into the corner of either (a) abandoning most of his base by giving up on state control of the climate or (b) pissing off 70% of the country by supporting horifically expensive state control of the climate at a time when $4.00 gas has everyone in a tizzy.

    Maybe he could do the intelligent thing by observing that high energy costs have been trending toward lower energy consumption, leading to a potentially larger change in carbon emissions than the government could have hoped for with any of its half-assed proposals.

  25. Fun fact: the amount of people taking the motorcycle safety course in Phoenix has tripled in the last month.

  26. squarooticus-

    You’re not too dumb to matter, and you’re not wrong. But in terms of relative dopiness, a straight-up carbon tax, with visibility and consistency, would be better than this annual, “How much is it worth to you to remain in business?” scam.

  27. Fun fact: the amount of people taking the motorcycle safety course in Phoenix has tripled in the last month.

    Fun fact: my local bus company’s ridership is up 23% in the past 6 weeks!!!

    Again – stupid initiatives have tried for decades to create this kind of effect and couldn’t even come close.

  28. Are they jacking up the prices for bus tickets, yet?

  29. “Can’t we all just agree that these figures and suppositions and predictions are being pulled right from the asses of their respective pimps? None of this has any basis in reality.”

    I agree that the underlying supposition of this legislation that human generated carbon emissions are causing global warming and need to be reduced has no basis in reality.

  30. Bingo | June 10, 2008, 11:19am | #

    Fun fact: the amount of people taking the motorcycle safety course in Phoenix has tripled in the last month.

    I still ain’t riding a bike in that city. People couldn’t even seen my fullsize pickup and would run into me.

  31. Are they jacking up the prices for bus tickets, yet?

    They can’t until the next contract they sign for fuel, but apparently some bus routes are actually (GASP) full!

  32. It saddens me that what we had always predicted (high gas taxes would ripple through the economy and destroy it) is getting blamed on everyone else but the greens, who wanted to do it deliberately through super-high gas taxes.

    Well played, fuckheads.

  33. The independent analysis by Science Applications International Corporation (SAIC) predicts gasoline prices will increase between 60% and 144% by 2030

    That was 2030 in military time, like 8:30pm, right?

  34. So if we consider the first study to be an outlier, and take an average of the last three studies, we’re talking about an increase of 75 cents per gallon over the next 22 years. Does anyone think that will really be significant? Considering that on their own, gas prices have risen about three times that amount over the last five years, 75 cents doesn’t seem like a whole lot. I can’t imagine that representing more than about 8-10% of the increase in the price of a gallon of gas over that time, and that assumes we haven’t already hit peak oil.

    So yeah, it’s definitely a lie to say it won’t increase the cost of gasoline, but 75 cents over 20+ years doesn’t seem like a big deal to me, considering that it’s likely to rise several times that without any additional government costs anyway. Besides, I take the train to work.

  35. Nick:

    Yeah I’m waiting for my health insurance to kick in before I get licensed. At least its not so bad now that the bulk of snowbirds and students have left.

  36. The stupid thing here is that the whole point of needing to buy permits to pollute is that it will increase the cost of polluting. THAT IS THE WHOLE POINT!
    Then to go and say that the costs won’t be passed on to the consumer, like the current increases in input costs, is so totally missing the WHOLE POINT of the policy in the first place.

  37. To protect the climate it may be necessary to impose a cap-and-trade scheme or carbon taxes, but please don’t insult our intelligence by lying about its effects on gasoline and other energy price.

    Or, you could just let prices rise in response to increased demand/reduced supply and allow markets to adjust and react rationally (as they are already doing), as opposed to jumping through congresscritter mandated hoops, which could change in the blink of an eye. We’re a wealthy people. Climate is an imprtoant issue to many people in the US and they will act and spend accordingly.

    People who freak out about the price of gas, well, I can’t be bothered to care all that much. Sure, it’s about 33% higher than it was last year, but it’s still a bargain considering what one gets out of if *and* I have a car with a 19 gallon tank and gets roughly 20 MPG with my driving habits.

  38. The average voter is an ignoramus on economic issues.

    And the politicians prefer it that way.

  39. It seems to me that high gas prices are already going to reduce carbon emissions without any government intervention necessary.

  40. Then to go and say that the costs won’t be passed on to the consumer, like the current increases in input costs, is so totally missing the WHOLE POINT of the policy in the first place.

    No way. This legislation only increases costs on TEH KORPORASHINS. It’s TEH CORPURASHONS that cause GW.

  41. Maybe mass transit can start pulling it’s own weight and I won’t have to subsidize NNG’s bus rides anymore.

  42. Hey, if I’m already paying sales tax, I may as well get something out of it.

  43. Maybe mass transit can start pulling it’s own weight and I won’t have to subsidize NNG’s bus rides anymore.

    Yawn. I’m tired of subsidizing your way of life, too.

  44. what do you mean Sleepy?

  45. Next we’ll be told Hummers are better for the environment than economy cars.

  46. Anyways, didn’t some EU study find 2/3 of carbon credits were fake?

    Only 2/3’ds? That’s gotta be a low-ball estimate.

  47. It’s strange how private transportation companies seem to do a decent job moving large groups of people around the entire country, but somehow, only a massively subsidized and poorly run public entity is able to move large groups of people locally.

  48. I think he means the tax breaks H2 owners get because they’re actually large enough to be considered “farm vehicles”.

  49. But- you hafta have a six thousand pound vehicle, with a four hundred horsepower engine, to get a one hundred and twenty pound woman to Pilates class! And it shouldn’t cost more than ten bucks a week to run it!

    This is Amurrika, goddammit!

  50. Bring back the Chevette Diesel

    and the 4 cylinder mustang!

  51. we’re talking about an increase of 75 cents per gallon over the next 22 years. Does anyone think that will really be significant?

    If one is to believe William Nordhaus’s environmental economic models as run for his 2008 book, that 75 cents is three-and-a-half times the optimal 18 cent tax on gasoline in 2030.

    So, yeah, that’s significant. It means, bluntly, that the chosen cure for global warming is worse than the disease.

  52. Well, I got it used at a bargain price because of gas prices, but no tax break. And yes, it does cost only about $10 a week to operate it, but that because I drive less than 2500 miles per year.

  53. That sounds more like $192 a week to operate.

  54. what do you mean Sleepy?

    Where to begin? The American Way of Life being non-negotiable, there are all kinds of subsidies lavished on people who choose to live out in the sticks, by both the government (e.g. local road construction and repair) and private companies (e.g utility expansion), that most people conveniently “forget” when this subject comes up.

  55. Rhywun, NNG was bitching yesterday about subsidizing H2s while mentioning he rides the bus. Not very self aware.

    NNG. Your math is wrong. Try showing your work.

  56. BTW I don’t live in the sticks.

  57. This is somewhat off-topic in that it’s in response to the Sean Higgins/AFF article to which Ron links at the end of the post, but I want to know how the hell Fred Smith decided that there’s a “libertarian vision on global warming.” There may be certain opinions that are prevalent within the libertarian community, but a political philosophy of individual freedom and liberty doesn’t tell us anything about how to objectively interpret scientific data. To the contrary, defining global warming skepticism as a “libertarian vision” is just as ideological and unscientific as the very environmentalists whom Smith mocks; it’s just on the other side of the coin.

    Okay. End off-topic rand.

  58. Make that “off-topic rant.” No need to bring the Randians into this.

  59. the Chevette Diesel

    General Motors single-handedly destroyed the market for diesel passenger cars. Those dumb fucks.

  60. Maybe he could do the intelligent thing by observing that high energy costs have been trending toward lower energy consumption, leading to a potentially larger change in carbon emissions than the government could have hoped for with any of its half-assed proposals.

    That would be Climate Change Apostasy (saying that state intervention is not necessary to Control the Climate), and would cost him a good chunk of his base.

  61. NNG was bitching yesterday about subsidizing H2s while mentioning he rides the bus. Not very self aware.

    How about we agree that all forms of transportation are subsidized to some degree? Instead of pretending that only bus riders are subsidized?

  62. You’re pretending I said that. I was gigging the bus riding NNG for his subsidies bitching yesterday. You pretended you subsidized my vehicle purchase. You pretended I lived in the sticks. You pretended to be falling asleep.

  63. You pretended you subsidized my vehicle purchase.

    Wrong. I stated that I partially subsidize the roads you drive on. I said nothing about the vehicle you drive.

    You pretended to be falling asleep.

    By around 4PM it won’t be pretend any more.

  64. I said nothing about the vehicle you drive.

    You’re right. My bad brother. And NNG, I apologize if I criticized you too personally. I was trying to say what Rhywun said better, that we all get some part of our lifestyle subsidized.

  65. H2, thats true and with all the government stuff its hard to figure who (if anybody) comes out on “top”.

    Someone else may help pay for my bus rides, but I’m probably paying for public schools that educate their kids even though I don’t have any kids. Its just a clusterfuck of taxes and subsidies.

    I’d gladly take a private bus ride, but its illegal to start a private local mass transit service.

  66. Problem: No matter how dumb Congress is, the Democrats and Media will always say “It’s Bush’s fault”, and it will be believed. Even three years into an Obama term, they will always say it’s because of bush policies. Nobody says the current problems are because of Clinton’s policies.

  67. Its just a clusterfuck of taxes and subsidies.

    So true. I’m all for dropping it all. An interesting thought experiment would be to describe what America would look like in that case.

  68. Here’s more for the press conference.

    “No more pollution, no more car exhaust, or ocean dumpage. From now on, we will travel in tubes!” the Senator exclaimed, visibly impassioned. “Get the scientists working on the tube technology, immediately.” she added, as an aide repeated the phrase. “Chop, chop, let’s go.”

  69. “I was trying to say what Rhywun said better, that we all get some part of our lifestyle subsidized.”

    Not on an overall net basis we all don’t.

    Some people are net subsidy payors and some are net subsidy recepients.

  70. It’s strange how private transportation companies seem to do a decent job moving large groups of people around the entire country, but somehow, only a massively subsidized and poorly run public entity is able to move large groups of people locally.

    I think an important distinction is that the former is elective – you don’t *need* to travel between two cities – whereas the latter is mandatory – you *need* to commute to your job on the other side of town so that you can work. The intention of public ownership and subsidy of the latter is that such non-elective travel should be affordable even to the poorest residents of a municipality – sort of an “Iron Rice Bowl” of transportation, if you will.

  71. Obama’s calling for a windfall profit tax on oil companies.

    Does he think this’ll lower prices?

    No, but he is hoping that voters will think this will lower prices.

  72. I’d gladly take a private bus ride, but its illegal to start a private local mass transit service.

    Would that not violate antitrust laws by discouraging competition?

  73. Obama’s calling for a windfall profit tax on oil companies.

    Does he think this’ll lower prices?

    Ag subsidies are supposed to lower food prices or else those evil farmers will charge us more. Maybe we should start subsidizing oil companies?

  74. Maybe he could do the intelligent thing by observing that high energy costs have been trending toward lower energy consumption, leading to a potentially larger change in carbon emissions than the government could have hoped for with any of its half-assed proposals.

    Being Barack Obama, it is something that he can not do.

  75. Has anyone heard of the TTAPS study?

    Why not use the information gathered in that study to fight global warming?

  76. I’m curious Ron. What tid-bit of information, which person or facility, changed your mind of man-made global warming? I assume youve looked at the evidence for global warming on other planets? I assume you know the planet’s temps have fluxuated quite a bit long before mankind ever got here. Like I said, I was just curious.

  77. More CO2 is good for living things on the earth, including humans. The impact of more CO2 on long term temperature is minimal. There is no science that says otherwise. [Yes, there are climate models which assume a drastic positive feedback, but no science to back up the assumptions and much to discredit them.]

    Why would any rational person want to fight CO2? Especially when the world’s poor will bear the overwhelming brunt of the fight.

    Environmentalists have killed millions of the world’s poor by banning DDT for malaria control. To which Charles Wursta, of the Environmental Defense Fund said, “This is as good a way to get rid of them as any.”

    Now they want to keep billions more in permanent poverty in the bogus fight over global warming.

    “My three main goals would be to reduce human population to about 100 million worldwide, destroy the industrial infrastructure and see wilderness, with it’s full complement of species, returning throughout the world.”
    -Dave Foreman, co-founder of Earth First!

    If their policies seem bad for the poor, it’s not an accident.

  78. I think an important distinction is that the former is elective – you don’t *need* to travel between two cities – whereas the latter is mandatory – you *need* to commute to your job on the other side of town so that you can work.

    Really? Do the airlines know this?

    As to the latter, so? If we don’t have a massive municipal bureaucracy no one can get there? Why is it that the default position is that you must have a public, rather than private, service? (And I do realize that there are private transportation companies, taxis, car pools, commuter buses and the like, but those are at the fringe of the bell curve.)

    The intention of public ownership and subsidy of the latter is that such non-elective travel should be affordable even to the poorest residents of a municipality – sort of an “Iron Rice Bowl” of transportation, if you will.

    I really don’t know what they municipalities “intended,” but the effect is that even though I don’t use public transportation, I still pay for it and a good deal of waste and inefficiency.

    There is no good reason why travel for the poorest couldn’t be subsidized by charity. It’s the middle class commuters that are subsidized the greatest under the current system and they need it the least.

  79. I was once at a meeting with Ms. Boxer where some architects promised her that new housing construction could be free of heating and cooling costs using passive solar techniques AT NO EXTRA COST!

    She acted like she believed them too.

  80. Peak Oil is here.

    There is no denying it.

    Denied!

  81. There is no good reason why travel for the poorest couldn’t be subsidized by charity.

    Well, that’s pretty pie-in-the-sky, I’m afraid. I’d say your best bet is to vote for John McCain as he’s got a strong record against Amtrak and other public transit subsidies. As I’ve said in another thread, public transit keeps the price of gasoline artificially low, and the best thing we could do to correct the situation is to scrap public transit. I can’t figure out why the McCain campaign isn’t pushing this more aggressively; it looks like an election winner to me.

  82. I’m tired of the over-bearing greed of the politics in DC. They are already planning how to spend the taxes raised by this cap-trade scheme!

    Do nothing congress is over! Its time to for the Boston Tea Party, Part II, in my opinion. If they don’t start understanding they work for the people, maybe they’ll understand it better at the end of a noose.

  83. By the way, what would the government do with the revenue from the cap and trade system? Let me guess, use it wisely?

  84. There is no denying it.

    Denied!

    It’s a librul lie just like Global Warming and Evolution!

  85. Why is it that the default position is that you must have a public, rather than private, service?

    Because private mass transit–which at the time was expected to pay its own way 100%–proved to be non-competitive against all the subsidies that automobile transportation received.

    the best thing we could do to correct the situation is to scrap public transit

    That’s acceptable–IF you also scrap all other tranportation subsidies to the automobile and airline infrastructures. I don’t see that happening any time soon.

  86. Well, that’s pretty pie-in-the-sky, I’m afraid.

    Wait now. They can be subsidized for food and housing, but not transportation somehow? How does that work? Hell, the gubmint can give them bus fare if they have to. It’s cheaper than the current scheme by a factor of about a gajillion.

    I’d say your best bet is to vote for John McCain as he’s got a strong record against Amtrak and other public transit subsidies.

    Just the same, no thanks. I’d rather not vote for someone who’s promising me free ponies.

  87. Because private mass transit–which at the time was expected to pay its own way 100%–proved to be non-competitive against all the subsidies that automobile transportation received.

    I wasn’t asking why it was scrapped, rather why it can’t be done at all? Should we have a national bus system so the poor can get from one city to another, or can we just rely on Greyhound and the Chinatown buses to do that? They seem to to do an OK job.

    But, you illustrate why we should scrap the whole system in place. It’s too distortive and you only end up with entrenched interests chasing their rent seeking.

    Screw the subsidies and go with user fees. Just the same, roads have more uses than moving just people, uses that have a significant effect on the economy (that’s not saying we should continue the subsidy). Public systems can’t say that.

  88. The Republicans have settled on a simple form of opposition to climate change policy: Nothing Must Cost Americans A Dime.

    Until the Democrats figure out a better counter to “your policy will raise prices on X!”, they’ll keep insulting our intelligence.


  89. Wait now. They can be subsidized for food and housing, but not transportation somehow? How does that work? Hell, the gubmint can give them bus fare if they have to. It’s cheaper than the current scheme by a factor of about a gajillion.

    That is pretty close to my own position, which is scrap public transit and use the savings to pass to the lower-income folks in the form of a voucher for a new SUV. This would help stimulate the struggling SUV industry and would help raise the gas prices to a more normal range, which are being artificially kept low due to lack of demand caused by the public transit subsidies.

  90. e-An excellent idea. We should award bonus subsidies for total road kill (on a point basis of course) and parking sideways across the lines.

  91. Um, that was me.

  92. As I’ve said in another thread, public transit keeps the price of gasoline artificially low, and the best thing we could do to correct the situation is to scrap public transit.

    How does public transit keep the price of gasoline down?

  93. How does public transit keep the price of gasoline down?

    Michael, people who would otherwise drive take public transit. This queers the market for gasoline, making it cheaper than it otherwise would be. A lot of it comes down to laziness – people who should be working harder to make the payments on a car are relying on a government handout in the form of public transit. We’re incubating a culture of dependence, especially in our inner cities, where kids need to learn the importance of ownership, and what better way than by owning a car; learning about budgeting, making monthly payments, etc.

  94. We should award bonus subsidies for total road kill (on a point basis of course) and parking sideways across the lines.

    Koko, there’s some interesting work done by Cato on how parking lot lines (especially those mandated by antiquated government building codes) are harming our competitiveness. Argentina under Pinochet’s rule, abolished parking lot lines and their economy boomed as a result.

  95. Argentina under Pinochet’s rule, abolished parking lot lines and their economy boomed as a result.

    Psssst…Pinochet was in charge of Chile, ya know, the country next to Argentina. I know, I know, the 2 countries sound so much alike.

    Sarcasm is soooo much funnier when it actually contains a fact or 2, rather than just jerking off.

  96. Pinochet was in charge of Chile

    d’oh!

  97. But businesses would not simply absorb higher input costs; instead, they would pass along the burden to consumers.

    This is not entirely correct…what really happens is the cost of production of those goods and services rise and therefor less of it would be produced and because of a limited supply the price would rise.

    What the above statment implies is that businesses have the freedom to raise prices arbitrarily and simply pass on costs of their new profits onto customers…Businesses do not have that sort of freedom. People will only spend what they are willing to spend period.

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