Jun 27, 2008

Wall-e



I just returned from seeing Disney Pixar's Wall-E. I don't normally recommend books, movies, etc on my blog or even to friends. It happens, but not that much. I recommend this, it was spectacular. I had high expectations, and Wall-E met them. I laughed, I smiled, I (nearly) cried.

The movie reminded me why Hollywood is doing poorly these days. It isn't because of piracy or disinterest in movies. It is because really truly, most movies suck. It is hard to notice when they all suck, but it becomes glaringly obvious after watching Wall-E. Pixar seems to try to make movies that are enjoyable when everyone else seems to be trying to make movies that will sell. There is a noticeable difference in the quality of the movie depending on where it's creators start out (enjoyable or sell-able), although ironically the enjoyable ones seem to sell better.

Jun 20, 2008

107813400 - You possess a stolen GPS unit.

If by some random chance you typed in the serial number of a GPS unit you bought used on eBay or in a pawn shop into Google and this page comes up, you have my GPS unit (Serial #107813400 -Garmin Nuvi 350). I don't want it back - you seriously keep it, but I do really want to know where you bought it from.

I want to catch whomever smashed my wife's car window making me pay for not only a new GPS and mount, but also a new car window. And since there have been several GPS thefts from my apartment complex as of late, I want to prevent this guy from doing it again.

Update: September 2010
Probably due to the good search rankings this post gets, for example searching for [stolen gps], a number of people have added comments with their own experiences and a few more serial numbers. I'll add them here for better search visibility, although I don't intend to keep this updated often: 1C0462207, 1Q163077, 76902542, 1Q6051977.

One user, KarenR, mentioned in the comments that Garmin will let you register the serial number with them and if they ever get it in for service or a map update, they will not perform the service and will send the customer information "over to someone for further action.", presumably law enforcement. Your mileage may vary.

Jun 18, 2008

I love the whole world



The best TV commercial I've seen in a long time. I only wished this would air on things like the Super Bowl. Go Discovery Channel.

Update (June 27): Apparently XKCD also loves the whole world.

Jun 13, 2008

One more try: Gas Tax Hikes can actually help the poor.



One last post on the subject. The comments on my first post and on this reddit thread make it clear to me that I've not cleared the air and people feel strongly about this. I've been stewing over a better way to express this for a few days and I think I have it.

It is an important topic too. The day after my last post, the NyTimes ran an excellent piece about how higher gas prices affect rural middle America higher than the rest of the country. The graphic above from that article depicts gas as a fraction of income by region of the US, yellow areas more affected than others. It appears that the rising cost of gas disproportionately hurts poorer Americans, which is the opinion echoed in my reader's comments.

Before I reformulate, please ignore anything I said about a gas tax or at least pretend to. Open mind.

First some numbers, assumptions. Gas costs $4. In the US, according to the DOE, gas usage per capita in 2004 was 464 gallons per person per year on average, with Wyoming being around 615 gallons per person max per state. Lets reasonably say that this has gone up and that the average American uses 500 gallons, with Wyoming around 650 gallons.

Here is my new proposal to congress. Everyone in the US gets a "gas credit" of 1,000 gallons per year. For every gallon below that number used, each person is paid $6 by the federal government (if you use more than 1,000 gallons, you get nothing). In Wyoming, if you use the average of 650 gallons, you get paid (1000-650)*$6 = $2,100 at the end of the year. If nobody changes their habits in the least, the average person in the US who uses 500 gallons of gas gets paid (1000-500)*$6 = $3,000. Clearly, this would not hurt *anyone*, and would be a godsend for the poor.

The US has approximately 300 million people living in it. This payment would cost the government $900 billion dollars (the economic stimulus package costs about $156 billion dollars and the Iraq War about 1,200 billion for comparison). If our government is fiscally responsible, they will raise taxes to pay for the $900 billion expenditure. On average, each American would have to pay $3,000 in taxes - but as with any income tax, it will be progressive. Poor Paul might pay a few hundred dollars, or even nothing if their income was low enough. Richie Rich might pay hundreds of thousands of dollars or more depending on how Richie he is.

The poor do not lose in this scenario - even if they drive the same amount as before, they come out ahead. However, if they drive less, they "save" $4/gallon on gas and "earn" another $6/gallon in incentives meaning that a gallon saved is $10 more in their pocket. This is true for the rich as well as the poor.

The hard part is figuring out how much to pay everyone. Right now, the government is not set up to determine how much gas you bought in total and then subtract that from your 1,000 gallon allotment. Interestingly, there is a simple solution to this issue that is easy for the government to implement and that is a gas tax.


If you tax gas at the pump by an additional $6/gallon and distribute the tax gains to the poor with a rebate of $6,000/year (the difference paid by the rich in income taxes), you get the exact same effect as the "rebate" I describe above, not a near approximation. The poor American who drives 500 gallons now pays $6*500 = $3,000 more at the pump but gets a rebate check at the end of the year for $6,000. If you are worried about waiting until the end of the year (a fair concern), just borrow and start paying out $500/month on the first of each month or pay out the redistribution for the first year before you institute the gas tax hike. This approach is easy for the government to initiate - we know how to tax gas purchases and we know how to write income tax rebates. We even know how to borrow so we can pre-pay the poor Americans.

The scenario I describe here is an identical outcome to a gas tax hike of $6 with a redistribution of the wealth to the poor as I describe in I want $10/gallon gas. I don't understand comments like:

What is going to happen to people - real people with real feelings and real children makes me sick. People today who get to make the decision to buy gas to go to work, or buy formula for the baby.


If you haven't enough income to both buy gas and buy baby formula, this thing is great for you. Your baby doesn't drive and your income is low enough to get the full refunds - so you now get an extra $1,000/month ($500 for you, $500 for the baby) to spend while your gas prices are going up a measly $250/month and possibly less if you can cut down your driving.

Jun 8, 2008

Over Complicated

I over-complicated my last post I think. Here is the simple version:

Adding tax to gasoline doesn't increase cost, it moves money around to incent the right behavior. It is a closed system - if I pay money in taxes in gasoline, that money comes back to me in other forms (lower taxes, lower inflation, better public services) and those forms tend to disproportionately benefit the poor.

Look at it another way. Take the total number of gasoline gallons consumed by all Americans and divide by the number of Americans to get "average" gasoline consumption per capita. Lets call that 500 gallons per year. Now, I hike the gas tax by $6/gallon while giving every American 500*$6 = $3,000 in cash rebates spaced out over the year. The system is closed - if you use an average amount of gasoline, you do not lose any money even if you don't change your behavior. However, there is a much greater incentive now to drop your usage - for every gallon you don't use, you "earn" $10.

Also, I as a senator don't have to distribute that $3,000 per person evenly - I can give more to folks who live in rural areas and depend more on gasoline, or more to folks who have a lower income, etc - most taxes are progressive (benefit poor more than rich), so one would expect that the type of people a gas tax hike would represent a large fraction of their income would actually be be positively benefited by this. My example with Poor Paul getting a tax windfall hoped to illustrate the point.

Jun 7, 2008

I want $10/gallon gas.

It is too bad that economics is often unintuitive. If it was more intuitive, government pandering wouldn't work well and we'd have far saner governments. I'm late to the news, but a few weeks back Senator McCain started pushing the idea of a National Gas Tax Holiday. The basic idea, if you didn't already hear it, was to stop taxing gasoline for a few months in the summer to give American consumers a break from high gas prices. Hillary Clinton jumped on the bandwagon and supported the idea. Barack Obama opted out and did not support it.

The economic question that has an unintuitive answer is the following: Would a National Gas Tax Holiday save the consumer at the pump any money? Lets make the question simpler: What if I were to propose removing the tax on gasoline permanently, Would implementing that idea save American consumers money?

First, let me make up some numbers. Gasoline costs $3.50/gallon in terms of the total cost of drilling it, transporting it, selling it, etc. There is a $0.50/gallon tax on top of that meaning that I pay $4/gallon at the pump. These are simplifying numbers, but any real numbers would work.

Let me also simplify by saying that the entire United States' population contains 3 people:

  1. Rich Richie - Richie is filthy rich, won't bother to bend over to pick up a $100 bill.

  2. Poor Paul - Paul has a manual labor job paying minimum wage and can barely make ends meet.

  3. Industrious Ike - Ike owns a fleet of trucks, which represents the commercial part of our economy moving goods around. Both Richie and Paul buy things from Ike.



So, what happens to each person when I remove a tax on gasoline?

Any change in the price of gasoline is unlikely to affect Richie Rich since it will literally be a drop in his large bucket of cash. Industrious Ike will be pinched, but he can pass along the price hikes as increases in the price of the goods he sells to Poor Paul and Richie Rich. Poor Paul seems like he will be the big winner or loser from changes to gas prices.

Making up some more numbers, Richie jets around the world every month, so he uses 1,000 gallons of gas. He is going to save himself $500/month with this tax break. He doesn't notice. Ike burns 200 gallons of gas per month driving products around the country, so he saves $100. Since he has competition, he lowers his prices on goods $80 - this saves Richie (who buys alot of crap) another $60 and saves Paul $20. Paul has to get to work every day and goes out on weekends, so he normally buys 100 gallons of gas a month. He now saves $50 plus the $20 Ike's prices have gone down, for $80/month in his pocket. He earns only $1,000/month, so this $80 is very welcome.

That picture seems pretty rosy - Paul, who is the person we really want to help, seems to have 8% more money to spend! The other two are minimally affected, but they save money too! BUT, this picture isn't accurate. Paul saved $80, Richie saved $560, but the government made $80 + $560 = $640 less. That little bit is ignored. What happens when the government has $640 less money to spend? Paul actually benefits the most from the government, since he drives on roads, is protected from theft by the police, depends on social security and medicare when he retires, etc. Richie doesn't care much about deterioration of the government. If the roads are congested, Richie gets to watch the cars out the window of his jet. He has too much value in his house to rely on the police so he already hires private security and buys lots of insurance. Social Security doesn't pay out to him. Ike is ambivalent - if he has to pay more because the government can't support him, he will indiscriminately pass the costs onto Paul and Richie. Richie is saving $500 on taxes, but most of those $500 would have disproportionally gone to help out Paul.

Alternatively, the government might not choose to stop spending money on roads, police, and social security. The government might just borrow more. Government borrowing raises inflation. Inflation is a tax on every dollar earned, regardless of your income. It is a non-progressive "flat" tax which disproportionally hurts Paul again.

It gets worse. Gas has dropped from $4 to $3.50. Since Ike's prices are lower, demand increases for his products. Since he is selling more, he has to use more gas to transport it, raising demand for Gas. As the demand for gas rises, so does it's base economic price. It goes from $3.50 it would have been with a $0.50 tax, to $3.80 without a tax. Still cheaper than before, but not by as much. Now Paul is not saving $80/month, he is saving $32/month, but the government is still out the $640 in taxes which mostly would have gone to support Paul. Where is the $0.30/gallon going? It is going to the person who sells the gasoline - not an American citizen but someone in Saudi Arabia, Russia, or Iran, an Exxon Mobile owner at best, a terrorist supporting regime at worst. Lowering the gas tax is a way for Americans to indirectly pay money to the Middle East through taxes.

Let's try the reverse for fun. New magic numbers, same 3 Americans. Gas's basic economic cost (without taxes) is $4/gallon and there is currently no tax on gas. I propose we add an additional $4/gallon tax on gasoline (or carbon, or oil imports, or whatever) doubling the price at the pump to $8/gallon. What happens?

Richie continues to burn through 1,000 gallons/month of gasoline generating a hefty $4,000/month tax revenue and never notices.

Paul, feeling that gasoline is getting hard to deal with, once a week tries to get to work without his car - carpooling, public transit, bicycling, etc. Maybe he takes a job a little closer to home, maybe he eventually trades for a little bit smaller car. His usage drops from 100 gallons/month to 80 gallons/month. He used to pay $400/month for gas, and now pays 80*$8 = $640/month for gas, $240 more than before.

Ike starts raising his prices which causes demand to drop a little and hence he drives a little less - using 10% less gasoline out of the gate. He also notes that since the prices for his and his competitors' good have gone up more, there are more options for cutting costs. All of the sudden, the time it would take to get a pay-back from buying a more fuel-efficient truck drops from 10 years to 3 years. He upgrades his fleet and starts using another 25% less gas, in total bringing his gas usage down 35% in short order. Now, I's is using 130 gallons of gas instead of the 200 he was before the tax hike. It costs him $1040 for that gas instead of the $800 he was paying before ($240 more), so he charges Paul $60 of that and Richie $180 of it since Richie buys more stuff to make up the difference in prices.

Poor Paul is now spending $300 more on gasoline a month in total ($240 through his own use and $60 through cost of goods).

The government is collecting $4,000 more in taxes from Richie, $320 more from Paul, and $520 more from Ike for a total windfall of $4,840/month in taxes. Most of that nearly 5 grand is going to Paul, either in terms of less taxes or better public services.

Gasoline demand has dropped as well - In total our 3 citizens used to use 1,300 gallons and even though Richie hasn't cut back, they are now using 1,210 gallons instead. So the base price in turn drops. Instead of sending 1,300 * $4 = $5,200/month overseas, the price drops to $3.50 and we send 1,210 * 3.50 = $4,235/month overseas - collectively our 3 Americans save almost $1,000 combined that we would otherwise be sending out of the country. Some of that might go into Richie and Ike's pockets, some might go into better public services like schools and roads.

Over the course of 10 years, things get even more exciting. Now that the cost of energy is so high ($7.50 / equivalent of gallon gasoline), other options which didn't make sense before start sounding useful. A company that can make fuel from prairie grass at $6/gallon equivalent starts making bunches of money when before nobody wanted their products. Paul, Ike and Richie start buying this fuel instead of gasoline. Paul's gasoline related costs drop from $640 to $480 (just $80/month above what he was paying before the $4 tax hike).

Demand for real gasoline drops even more - it has to keep a price of $2/gallon (+$4tax) to be competitive with prairie grass fuel or nobody will buy it. Demand and price having dropped, we collectively buy 500 gallons of gasoline at $2/gallon - or only sending $1,000 of what would have been over $5,200/month overseas. Eventually, the prairie fuel company ratchets down their cost to $5/gasoline gallon equivalent. Gasoline demand drops further to 250 gallons until the untaxed price hits $1/gallon, sending a measly $250/month overseas. Eventually prairie gas costs $4/gallon or less or electric cars become economical. Gasoline demand literally dries up for most all applications. A few antique "collector" cars belonging to Richie still run on it occasionally for fun, but the usage is negligible.

In the process, we've created tons of tax revenue for the government, convinced Paul to get some exercise once a week biking to work, saved all Americans a ton of money, stopped funding terrorism, built several new American technology industries (prairie gas and electric cars) which we start selling around the world, and of course - averted the climate crisis.

You might think I have wishful thinking, but these changes are already coming about with only $4/gallon gas:

- Walmart is upgrading it's entire truck fleet to double the fuel efficiency gradually between now and 2015 (http://www.rmi.org/store/p15details10.php)
- Public Transit usage has grown 25% in one year (http://www.apta.com/media/releases/080602_ridership_report.cfm
- Ford's Monster Truck the F-150 has been the highest selling vehicle nearly every month for the last 30 years, but last month was 5th behind several fuel-efficient vehicles (http://online.wsj.com/article/SB121250107132341361.html
- GM's Hummer sales have dropped almost 60%, GM is discountinuing plus-sized Tahoe, Suburban and Yukon lines as early as 2009 and is closing or coverting several plants that produce these large inefficient vehicles (http://www.bizjournals.com/milwaukee/stories/2008/06/02/daily9.html
- One of my co-workers commented that in just the last couple weeks he has seen a marked increase in the number of people biking on his morning commute. Some of this is likely the great weather lately, but some may not be.

I want the second scenario, not the first. I want $10/gallon gas, and I want it yesterday. $20/gallon if I could get it. Bring it On.