San Francisco Mayor follows Al Gore: Tax waste not work

San Francisco mayor Gavin Newsom is in the kitchen:

Mayor Gavin Newsom plans to ask voters next year to approve a "carbon tax" on businesses that he says would provide a financial incentive for conserving energy and motivating workers to use public transportation.

The ballot measure would increase the city's 5 percent commercial utilities tax by an as-yet-undetermined amount to encourage energy-saving steps by hotels, offices and other nonresidential buildings, Newsom said in a recent interview with The Associated Press.

To keep the higher rates from becoming an economic drag on the city, the initiative would carry a corresponding decrease in the 1.5 percent payroll tax on for-profit businesses in San Francisco, according to the mayor.

Nice, just like Al Gore.

World's largest oil consumer?

The U.S. military, via an article criticizing Al Gore for doing nothing to oppose the same.

If Gore would step up to slicing and dicing (kitchen analogy is a must here) the U.S. military in addition to advocating a carbon tax, he'd have a great one-two punch against global warming!

Xmas lights

Christmas lights. Bah-hum-bug!

Green Your Home Data Kitchen

Green computing is for data centers and with an extreme engery makeover, your home office. Fortunately most of the benefit comes from replacing a CRT with a LCD monitor, which everyone is doing anyway. To take the next steps, read the article and act in your home data kitchen.

Green Your Data Kitchen

Or, green your data center, article on Worldchanging.

Lots more great information (to be followed!) at The Green Grid.

Drought West

Another reason to move agriculture to the East and kill agriculture subsidies. And to fight global warming.

Fural to be green VI: Frugal tax policy

If the shortest path in the kitchen to being green is being frugal, what is the obvious green tax policy? Consumption tax! Why Not Shift the Burden to Big Spenders? doesn't cover the environmental implications but is good background.

However, Kitchen Linker has concerns with the way this proposed tax is cooked. It requires reporting of income and savings: new frontiers in zero privacy.

Far better to concentrate consumption taxation on carbon, which has no privacy concerns and very directly attacks the number one global environmental concern (global warming, of course).

Algae a viable biofuel?

Ethanol from corn is nothing but a shakedown, and other biofuels are marginal, but what about algae? --

Yield of vegetable oil in gallons per acre per year:

• Algae: 100,000

• Palm: 700

• Rapeseed: 130

• Sunflower: 110

• Soybeans: 50

• Corn: 29

Source: GlobalGreen Solutions; Valcent Products

Is there anything to this? And why in dry West Texas?

The two companies behind it, El Paso's Valcent Products and Canadian alternative energy firm Global Green Solutions, have developed a system they claim will allow for cheap mass production of algae in just about any corner of the world.

Why not in the wet East?

Realtor cooking

Highly Entertaining: Realtors Suing Other Realtors.

Yep.

Kitchen Linker searches kitchen for a grinding instrument to use on the guild, then a sharp knife to remove the anti-environment mortgage interest tax deduction.

Green Energy Czar

Google has one, so cool.

Less Watts

Less Watts.org. Go green software, go open source, go green source!

Irrigate the East

Move agriculture from the massively irrigated and dried out West and Let the East Bloom Again. Kitchen Linker says this could be the most important environmental idea in the USA (the carbon tax is a global idea), via The American Scene.

Q.E.D.

Powerful editorial in the New York Times from the Pigoufather:

Among policy wonks like me, there is a broad consensus. The scientists tell us that world temperatures are rising because humans are emitting carbon into the atmosphere. Basic economics tells us that when you tax something, you normally get less of it. So if we want to reduce global emissions of carbon, we need a global carbon tax. Q.E.D.

D conference coverage

Previously mentioned D programming language conference written up at Lambda the Ultimate, Leancode, and Planet D.

Save the Environment: Repeal the Mortgage Interest Deduction

That's the title of a great Tax Policy Blog post:

Powerful U.S. Rep. John Dingell revealed Tuesday new details of his plan to cut global warming, including adding a 50-cents-a-gallon tax on gasoline and ending the mortgage tax deduction on what he called "McMansions," homes larger than 3,000 square feet.

On the same blog, France rejected a mortgage interest deduction.

OpenOffice 3.0 in 2008

Contrary to rumor, OpenOffice 3.0 will not be a rewrite and is scheduled for September 2008, with 2.3 and 2.4 releases coming out of the kitchen between now and then.

First D conference next month at Amazon!

D programming language conference.

One step for green software.

Now if Kitchen Linker could just get out of the kitchen...

Be frugal to be green V

Last post in this series Kitchen Linker highlighted one extreme version of being frugal to be green, known as freeganism.

Another (of several) way of being frugal to be green is to turn an economist's eye on the problem. Sometimes the results are counterintuitive, e.g., when recycling uses more resources than it saves.

In this kitchen we want to be actually green, as opposed to just going through the motions. To be sure we are meeting this goal, an analytic component is necessary.

What Kitchen Linker really wants is to take the best of freegan philosophy and economic analysis -- and mash them together into something yummy!

AntiPigou

Iran, Low on Gasoline, to Be Supplied by Venezuela:

Iran, a major oil exporter, imports 40 percent of its gasoline because of high consumption and limited refining capacity. While gasoline costs about $2 a gallon on world markets, the government sells it for 34 cents, a subsidy that costs it about $5 billion a year.

And Kitchen Linker thought NoPigou was bad...

Apology to David Friedman

Kitchen Linker is honored to have David Friedman commenting here, even if the comment is a justified accusation of making a base assertion. Kitchen Linker has now actually read The Coal Question and Climate Change cited by David Friedman rather than taking a quick glance and throwing it into the frying pan.

A strong case is made that most long term global warming scenarios assume much more hydrocarbons will be burned than are available to burn. Unless we trigger a major change now, the long term (year 2100+) impact on the climate from humans releasing carbon into the atmosphere will be relatively small and transient, because we'll run out of oil and coal.

However, Kitchen Linker does not really believe people are concerned about the year 2100 and beyond, at least not very much (and they shouldn't be--if we survive, people then will have incredible wealth and tools to face down the pedestrian challenges of today). People are concerned about the possibility (admittedly small) of near term catastrophic climate change and/or collapse in oil production.

Frankly, any policy implemented now is going to only slightly tweak the probability of either near term disaster scenario. But that is not an excuse for doing nothing, in particular because people want something done, and that something could be very, very bad, such as anti-technology terrorism and/or resource wars.

Let's ward those off with policy that is good and addresses climate change and energy depletion. In a comment on his own blog post, David Friedman has sage advice:

The conclusions I want to reach lead me to conclude that the future is sufficiently uncertain so that it is almost always a mistake to bear large costs now in or to avoid problems in the distant future. For more on that, see the webbed draft of my current writing project, Future Imperfect.

Yes, but a green tax shift does not involve bearing large costs. To the contrary, it costs less than equivalent taxes on production.

Readings from the Pigoufather

He recommends The Tax Free Lunch by Charles Krauthammer.

He also recommends A Green Employment Tax Swap: Using A Carbon Tax To Finance Payroll Tax Relief by Gilbert Metcalf.

Both recommend swapping the payroll tax for a carbon tax, same as Al Gore. Kitchen Linker could not agree more.

He is of course Greg Mankiw. Podfather, Pigoufather, get it? Ha ha.

No bailout for Wall Street!

Gretchen Morgenson interviewed by Bill Moyers:

BILL MOYERS: But I mean, look what they've been doing. Their past experience is no indication that they will respond to what you're saying.

GRETCHEN MORGENSON: Only if they're held accountable.

BILL MOYERS: By?

GRETCHEN MORGENSON: And if they have to pay the bill that comes a cropper. Let's not make it a bail out where the taxpayer bails out Wall Street, please.

BILL MOYERS: Then Wall Street would be the winner and--

GRETCHEN MORGENSON: Then Wall Street would say, "Fine. I'll go do that again. I'll go throw money at a problem and let it blow up, and I don't mind."

BILL MOYERS: Does this contribute to what you and I both know are-- is growing inequality in the country? The gap between the rich and the poor? The greatest gap since 1929? Is this contributing to that gap?

GRETCHEN MORGENSON: To the degree that Wall Street made an awful, awful lot of money on these securities, yes, it contributes to that gap. To people who work on Wall Street, you saw the enormous bonuses, the enormous payouts to the CEOs of these firms. Absolutely. The mortgage mania contributed to that. The little guy doesn't have the benefit of all the powerful friends in Washington and the powerful friends on Wall Street. The little guy is just trying to be able to retire comfortably and not have to scrimp and worry about money. And he and she have a right to that. And if we're in an ownership society that's ballyhooed around, that should be a benefit. That should be who wins. But unfortunately, the little guy is the guy that's usually the bag holder.

Kitchen Linker may post this ARM reset schedule chart on the kitchen wall, noting that any housing bubble is in part a kitchen bubble, and any housing bust is in part a kitchen blowout.

Both links via Ben's Housing Bubble Blog.

The Price of Gasoline SHOULD Go Up

Tom Evslin (on the kitchen blogroll) has a must read post on why The Price of Gasoline SHOULD Go Up:

Suppose we were to raise the tax on gasoline and diesel used as motor fuels by $.50/gallon every six months for the next three years. We could immediately end the $.50/gallon subsidy to ethanol producers without discouraging production. We could remove the stupid restrictions on importing ethanol made from sugar since there’s be plenty of demand for both foreign and domestic ethanol. We could stop the tariffs which protect the sugar growers as they find a market – as corn has already done – as a fuel source.

Even more expensive biofuels would become economical without subsidy. The government could stop playing the pork barrel game of trying to decide which alternative fuels to subsidize how much and let the most efficient producers replace gasoline.

Putting aside the politics, there are still two enormous problems with this proposal:

1. The tax is extremely regressive – the working poor pay much more of their income in gas tax than the rich.
2. The government will withdraw huge sums from the economy and legislators’ll invent vote-buying programs to spend it.

Both problems could be solved, however, by reducing or eliminating social security taxes – also regressive – at lower income levels, maybe after keeping a little of the surplus to make sure that social security and Medicare are actually funded for when the baby boomers retire.

Absolutely, though Kitchen Linker will argue that a gas tax is not regressive on a global and long term scale.

Peak Oil vs. Global Warming

David Friedman points out an apparent contradiction in the arguments of those who believe both peak oil and global warming are problems:

A recent post on FuturePundit cites some interesting calculations by CalTech professor Dave Rutledge. Using the estimation approach on which current, widespread concerns about running out of petroleum are based, he finds that the IPCC global warming calculations overestimate future hydrocarbon burning by a factor of at least three or four--because the hydrocarbons are not there to be burned.

Nice try, but Kitchen Linker illustrated how both could be problems in Dangerous conflation of global warming and peak oil:

Clinton to Start $1 Billion Renewable Energy Fund, quote from WaPo:

"The Earth is warming at an alarming rate, we are running out of fossil fuels, and it is long past time for us to take action to correct these problems," Clinton said.

I applaud these efforts, but ain't the symmetry ... ironic, dreamlike, unlikely, ??? Actually there is no symmetry and the above is a gross oversimplification -- we're nowhere near to running out of coal or low quality oil sources (tar sands and shale), each of which is worse for the environment and global warming in particular than high grade crude that we are slowly running out of. So yes, efforts like Clinton's and Branson's are desperately needed, but they undersell the case!

David Friedman, in this kitchen doing nothing (still) is a false choice.

Greening Linux

Kitchen Linker noticed on LWN.net that Linux Foundation says:

Power Management: Throughout the Summit, Linux developers, including the Linux Desktop Architects, met to discuss the increasing need for efficient power management in Linux. As a result of these meetings, Linux Foundation is organizing a “Green Linux” initiative to improve power management functionality in Linux. Making Linux “green” is becoming ever more important in all aspects of Linux adoption: mobile, desktop and server. The Linux Foundation will work with its workgroups, identify key projects and coordinate resources among its members to improve this functionality in the Linux platform. Power management developers will meet next week in Ottawa to continue work in this area.

That smells good in the kitchen.

Be freegan to be green?

Not Buying It in the NYT:

[T]he freegan movement has become much more visible and increasingly popular over the past year, in part as a result of growing frustrations with mainstream environmentalism.

Environmentalism, Mr. Torres said, “is becoming this issue of, consume the right set of green goods and you’re green,” regardless of how much in the way of natural resources those goods require to manufacture and distribute.

“If you ask the average person what can you do to reduce global warming, they’d say buy a Prius,” he added.

Kitchen Linker isn't a freegan, but has some sympathies. Freeganism is the extreme of be frugal to be green.

Tax global warming

Kitchen Linker loves this idea to impose high carbon taxes to the extent there is evidence for anthropogenic global warming, quoted via EconLog, as the original source is behind a paywall, so they don't get linked into the kitchen:

climate models predict that, if greenhouse gases are driving climate change, there will be a unique fingerprint in the form of a strong warming trend in the tropical troposphere, the region of the atmosphere up to 15 kilometres in altitude, over the tropics, from 20 degrees North to 20 degrees South. The Intergovernmental Panel on Climate Change (IPCC) states that this will be an early and strong signal of anthropogenic warming. Climate changes due to solar variability or other natural factors will not yield this pattern: only sustained greenhouse warming will do it.

...Suppose each country implements something called the T3 tax, whose U.S. dollar rate is set equal to 20 times the three-year moving average of the RSS and UAH estimates of the mean tropical tropospheric temperature anomaly, assessed per tonne of carbon dioxide, updated annually. Based on current data, the tax would be US$4.70 per ton...

This tax rate is low, and would yield very little emissions abatement. Global-warming skeptics and opponents of greenhouse-abatement policy will like that. But would global-warming activists? They should -- because according to them, the tax will climb rapidly in the years ahead.

The IPCC predicts a warming rate in the tropical troposphere of about double that at the surface, implying about 0.2C to 1.2C per decade in the tropical troposphere under greenhouse-forcing scenarios. That implies the tax will climb by $4 to $24 per tonne per decade, a much more aggressive schedule of emission fee increases than most current proposals.

Really neat idea, but Kitchen Linker still supports high carbon taxes, now, for two reasons: 1) prevention better than cure and 2) a carbon tax would be a big improvement over production taxes even if global warming did not exist.

Javascript 2 reference implementation in Standard ML

Kitchen Linker says this is way cool:

As we've discussed before here on LtU, the reference implementation of ECMAScript is being written in Standard ML. This choice should have many benefits, including:

• to make the specification more precise than previous pseudocode conventions
• to give implementors an executable framework to test against
• to provide an opportunity to find bugs in the spec early
• to spark interest and spur feedback from the research and user communities
• to provide fodder for interesting program analyses to prove properties of the language (like various notions of type soundness)
• to use as a test-bed for interesting extensions to the language

Prediction: Europeans and Asians take over rap

SF Chronicle on jazz fans complaining about too few African American jazz players, although people of African descent pioneered the genre -- in America.

The same will happen to rap and hip-hop. In a generation the vast majority of rappers will be of European, Asian, or mixed descent, and there will be similar complaints.

The big question is this: What is the next big mainstream genre? Will it be pioneered by African Americans? Kitchen Linker has no idea what the next big genre is, but suspects it will be pioneered by Africans or Indians not living in America -- or perhaps Brazilians.

America is too rich, complacent, and stifled by copyright to be the wellspring of the next big musical-cultural shift. "America" includes African Americans.

Blogrolled!

Everything and the kitchen link has been blogrolled for the first time, by Climateer Economics.

The Kitchen Linker has been busy, but will get back to regular posting shortly.

Be frugal to be green III

Kitchen Linker has pointed out a couple times that being frugal roughly equals being green. The San Francisco Chronicle has a nice summary of how being frugal sometimes directly equals being green. Read and implement!

We can do better than Sunstein predicts

Cass Sunstein predicts a cap-and-trade program in the U.S. within five years:

I am predicting, then, that the United States will adopt a domestic program that imposes significant domestic costs for insignificant domestic gains.

Kitchen Linker says that we could adopt a domestic program with significant domestic cost reduction instead -- a carbon tax with a corresponding reduction in anti-growth income or payroll taxes.

Ronald Bailey: "carbon taxes is the way to go"

Ronald Bailey writes about To Spur Energy Innovation,Tax Carbon, Says Newsweek Editor Zakaria. Bailey's conclusion:

Just a heads up--I have done a lot of reporting and just completed an article for The American on carbon markets versus carbon taxes. As a generally market-friendly guy, I've nevertheless concluded that carbon taxes is the way to go. I will link to the article when it appears this summer.

It must be really lonely over at the NoPigou Club.

A big platform needs a big hole in the ground

Recently recommended Techcrunch transcribes a quote from the putative YouTube competitor from big media:

Chernin: this will be the largest advertising platform on earth.

Kitchen Linker's comment: A big platform is built on a big hole in the ground. This YouTube competitor is the hole in the ground.

European commissioning smarts

Greg Mankiw points out that the European Commission is considering doing the right thing for the environment and its torpid economy:

The Commission will on 28 March present ideas for “green taxes” to save energy and cut greenhouse gas emissions. It says that such an ‘ecological tax reform’ could increase the bloc’s competitiveness by shifting the burden away from labour taxes.

Could the EU lead down the smart path?

Convenient Truth

Jonathan Rausch makes the obvious point that a carbon tax is the best way to deal with global warming and has good side effects:

Just as conveniently, the most efficient way to get started is also the simplest, albeit not the easiest politically: tax carbon emissions. "At around $30 per ton of CO2 over a 25-year horizon, experts seem to think this is the kind of price that will encourage the kind of technologies that are necessary," says Billy Pizer, an environmental economist at Resources for the Future, a Washington think tank. That would translate into an additional 27 cents or so on a gallon of gasoline and about a 20 percent increase in residential electricity bills (more like 34 percent for industrial users). Unpleasant, but hardly radical. Perfectly do-able, in fact.

Fortuitously, a carbon tax could also reduce the U.S. budget deficit and the geopolitical leverage of sinister "petrocracies" such as Iran, Russia, and Venezuela. Policy prescriptions don't come any more convenient than that.

Blogrollsix: Techcruch

Required reading, circa 2006-7.

Last blogroll addition was very different, the Tax Policy Foundation Tax Policy Blog.

Al Gore's testimony

As reported at Reason, includes:

(2) I believe we should start using the tax code to reduce taxes on production and employment and substitute pollution taxes. We’re discouraging work and encouraging the destruction of the planet’s habitability. We should discourage pollution while encouraging work. Carbon pollution is not currently priced into the marketplace. I internalize air and water and I think that the economic system should too.

Great, but his other nine points consist of a mismash of regulation, prohibition, and subsidy.

Smart people need to advocate the best policy, doing nothing is a false choice (also see Greg Mankiw's criticism of accepting the worst policies by default).

Doing nothing a false choice

David Friedman comes out against carbon taxes (at least he's an anarchist, so that is a valid policy choice for him, not so for others). But Friedman really just opposes doing anything:

Finally, I suspect that widespread acceptance of the catastrophist view of global warming would result in quite a lot more than carbon taxes. It would provide a new justification for politically motivated interferences in a wide range of human activities. Anyone who questioned such policies would be labelled a denialist, accused of wanting Bangladeshis to drown and African children to starve. Again, look at the ongoing exchanges on Brian's blog.

Hence I conclude that serious efforts to combat global warming would have large costs, costs justified only if there were good reason to be confident that not taking such efforts would have catastrophic effects.

Not doing something sane (i.e., cabon tax) is going to lead to result in other practices Friedman will like much less, for example blunt regulation, crazy subsidies, and politically manipulated cap-and-trade markets -- also far worse than Pigouvian tax, as spelled out by Steven Postrel:

So the final score is: Permits get a moderate edge on political economy/public choice issues; taxes have a big advantage on institutional/governance issues; and taxes deliver a big can of whipass on traditional economic efficiency concerns. So conditional on accepting the weak case for CO2 emissions control, the Pigou people have a strong case against the cap-and-trade brigade. Maybe they should start making it.

Last quote via pointed out by Greg Mankiw.

The Friedman post comes via the NoPigou Club, which has yet to answer the question if not Pigou, then what?

Taxation six plus times more efficient than regulation

Econbrowser on CAFE standards:

Overall, Jacobsen estimates that a one-mile-per-gallon increase in the required average corporate fuel efficiency would increase the average fuel-efficiency of all new cars sold by 2.5%. However, since most of the older cars would still be on the road, Jacobsen estimates that during the first year, total U.S. gasoline consumption would decline by only 0.8%. He estimates the costs of this 1 mpg tightening of CAFE would be $20 billion in the first year, with these first-year costs shared about equally between U.S. consumers and producers. For comparison, Jacobsen claims that a gasoline tax could accomplish the same first-year effect at an efficiency cost of significantly less than $1 billion.

Over time, the fuel savings from tightening CAFE would of course increase, but even after 10 years, Jacobsen concludes that that a gasoline tax could accomplish the same thing at 1/6 the cost.

That's not even including that gas taxes produce revenue which can be used to reduce horribly inefficient taxes on labor and capital.

For the n'th time Kitchen Linker says Pigou means less planning, more growth, a cleaner environment, nor that OPEC pays part of any gas tax.

OPEC tax shift

Greg Mankiw provides some hard budget info:

For example, if I am reading it correctly, we could increase the gasoline tax by $1 (see revenue option 48) and reduce all ordinary income tax rates, AMT rates, and dividend and capital gains rates by 2 percentage points (see revenue option 1) to produce an approximately revenue-neutral tax reform.

That's a start.

But Kitchen Linker really likes a comment by "Mr. Mercy Vetsel" on Mankiw's post:

Amen! Now we just need to package that with a clever name that doesn't inspire thoughts of pork...

Preparing to join the "OPEC Tax Shift (Shift Taxes to OPEC)" club

Amen!

Toyota #1: fear and marketing or pricing and environment?

BusinessWeek on Why Toyota Is Afraid Of Being Number One -- anti-foreign backlash. So Toyota is afraid, and running ad campaigns to emphasize its U.S. employment base.

Kitchen Linker's observations:

• Toyota doesn't have to take the #1 spot no matter how bad the Big Three get. Toyota can raise prices instead.


• Toyota should emphasize (and invest in) green cars. Nothing could be more patriotic, or good for the U.S. economy. Fear and marketing is no substitute for doing good.

Ruby 2.0/Yarv for green software?

Ruby 2.0 will be very fast, which is a good thing for the planet.

Return of the Gao tree

Must read article in the NYT on return of trees to Niger during a period of population explosion.

Enlightened policies leading to such results are badly needed for the poorest to cope with (now inevitable) global warming:

Still, more trees mean that Niger’s people are in a better position to withstand whatever changes the climate might bring. “This is something the farmers control, and something they do for themselves,” said Dr. Larwanou. “It demonstrates that with a little effort and foresight, you can reduce poverty in the Sahel. It is not impossible or hopeless, and does not have to cost a lot of money. It can be done.”

A combination of efficient policies to make sure global warming doesn't get increasingly worse from industrialized countries (i.e., green tax shift) and low cost but highly effective green policies like those that led to the re-greening of Niger, and we can get through this.

Continental Europe: Getting out of the way?

Greg Mankiw links to an interesting column that has nothing to do with Pigouvian taxes ... Ed Phelps on Why European economies lag behind the U.S.:

The values that might impact dynamism are of special interest here. Relatively few in the Big Three report that they want jobs offering opportunities for achievement (42% in France and 54% in Italy, versus an average of 73% in Canada and the U.S.); chances for initiative in the job (38% in France and 47% in Italy, as against an average of 53% in Canada and the U.S.), and even interesting work (59% in France and Italy, versus an average of 71.5% in Canada and the U.K). Relatively few are keen on taking responsibility, or freedom (57% in Germany and 58% in France as against 61% in the U.S. and 65% in Canada), and relatively few are happy about taking orders (Italy 1.03, of a possible 3.0, and Germany 1.13, as against 1.34 in Canada and 1.47 in the U.S.).

So EUians don't want to lead or follow. As a result their relatively shrinking economies are getting out of the way.

Now if the US would just take a dynamic lead on efficient environmental policies...

Congestion pricing goes well with other eco-efficient policies

Kitchen Linker is a big fan of congestion pricing. While not as important as (much) higher gas taxes replacing less efficient taxes, congestion pricing is another win-win: more efficient and more environmentally friendly transportation system.

Save the environment and the economy, yada yadda yaddda.

Branson's billions putting brains to work for the earth

Richard Branson's investments in biofuels were welcome but not exciting, as biofuels are marginal at best (and environmental suicide via politics at worst).

With the Virgin Earth Challenge (and some instruction from Al Gore?), Branson's money is working smarter. Very very cool.

The Virgin Earth Challenge is a prize of $25m for whoever can demonstrate to the judges' satisfaction a commercially viable design which results in the removal of anthropogenic, atmospheric greenhouse gases so as to contribute materially to the stability of Earth’s climate.

High risk of housing BUST

Kitchen Linker doesn't like writing about the housing bubble, but sometimes the facts are too much. Take this paragraph from the San Jose Mercury News story on a National Association of Realtors survey:

The highest loan-to-value ratios for first-time buyers were in the South, where the median mortgage was 100 percent of the sale price. In the West, the median was 99 percent, in the Midwest 98 percent, and in the East, 96 percent.

By comparison, the typical repeat home buyer nationwide invested a median 16 percent as a down payment to purchase a replacement home -- typically from the proceeds of a prior sale -- and financed the remaining 84 percent.

Kitchen-mates, a price decline over the next year or two is going to put millions of home "owners" under water. Any increase in unemployment is going to send millions to the hills, or rather cheap apartments and parent's homes (think abut that recursively). Result: housing BUST.

Truth too inconvenient

The Washington Post has some excellent columnists. Robert Samuelson says:

What we really need is a more urgent program of research and development, focusing on nuclear power, electric batteries, alternative fuels and the capture of carbon dioxide. Naturally, there's no guarantee that socially acceptable and cost-competitive technologies will result. But without them, global warming is more or less on automatic pilot. Only new technologies would enable countries -- rich and poor -- to reconcile the immediate imperative of economic growth with the potential hazards of climate change.

Meanwhile, we could temper our energy appetite. I've argued before for a high oil tax to prod Americans to buy more fuel-efficient vehicles. The main aim would be to limit insecure oil imports, but it would also check CO2 emissions. Similarly, we might be better off shifting some of the tax burden from wages and profits to a broader tax on energy or carbon. That would favor more fuel-efficient light bulbs, appliances and industrial processes.

It's a debate we ought to have -- but probably won't. Any realistic response would be costly, uncertain and no doubt unpopular. That's one truth too inconvenient for almost anyone to admit.

Kitchen Linker is 100% for a realistic response.

Global Warming's Simple Remedy

Anne Applebaum in the Washington Post:

Any lasting solutions will have to be extremely simple, and -- because of the cost implicit in reducing the use and emissions of fossil fuels -- will also have to benefit those countries that impose them in other ways. Fortunately, there is such a solution, one that is grippingly unoriginal, requires no special knowledge of economics and is easy for any country to implement. It's called a carbon tax, and it should be applied across the board to every industry that uses fossil fuels, every home or building with a heating system, every motorist, and every public transportation system. Immediately, it would produce a wealth of innovations to save fuel, as well as new incentives to conserve. More to the point, it would produce a big chunk of money that could be used for other things. Anyone for balancing the budget? Fixing Social Security for future generations? As a foreign policy side benefit, users of the tax would suddenly find themselves less dependent on Persian Gulf oil or Russian natural gas, too.

Most of all, though, the successful use of carbon taxes does not require "American leadership," or a U.N. committee, or a complicated international effort of any kind. It can be done country by country: If the British environment minister or the German chancellor wants to go ahead with it tomorrow, nothing is preventing them. If a future American president wants to rally the nation around a patriotic and noble cause, then he or she has the perfect opportunity. If the Chinese see that such a tax has produced unexpected benefits in America and Europe, they'll follow. And when that happens, we'll know that the apocalyptic climate change rhetoric has finally been taken seriously.

Bono the tax hypocrite

See the New York Times story on U2's use of tax shelters.

This story isn't about Pigouvian taxes, but Kitchen Linker will take the opportunity to advocate 'em. If taxation were shifted from activities with positive externalities to activities with negative externalities then U2's licensing income would not be taxed and hypocritical tax dodges would not be "required" by U2-the-business, nor would they be possible.

On the other hand, U2 and U2 fan's jet-setting ways (KL includes the fans, as let's face it, only rich fans can afford to attend top stars' concerts, and fans often travel to do so) would be heavily taxed.

Pigou Club vs. Pig Club

Bryan Caplan:

Given all the pork involved in the biofuels ripoff, I think that those politicians who support it ought to be called the Pig Club.

Indeed. Let Kitchen Linker give Caplan a hint: the Pigou Club is the alternative to the Pig Club.

Tax Saudi Arabia, Iran, and Venezuela

A hefty gas tax would initially be paid by American drivers. But as Americans became more fuel efficient as a result of the tax, the tax would be paid by oil producers. Read about tax incidence.

So the U.S. can replace taxes on goods with taxes on bads, save the environment, and make American foreign policy enemies pay the tax!

Kitchen Linker asks: Why are we not doing this already!?

Fix corporate tax competition with green taxes

Today's Financial Times has a subscriber-only article Europe's tax rivalry keeps multinationals on the move bemoaning tax competition and an eventual "race to the bottom" for corporate taxation.

Kitchen Linker says this is not a problem but a grand opportunity: replace corporate taxes (and taxes on increasingly mobile labor) with green taxes. Save the environment, economy, and state, all in one fell swoop!

Another FT article hints this is the way things are going:

French VAT is already at 19.6 per cent, and Germany had implemented some significant structural reforms that remained elusive in France. However the ministry was examining whether some of the tax burden on labour could be transferred, for example through environmental charges, he said.

France’s expression of interest in Berlin’s VAT experiment could be the first of many, according to economists.

“You can see that possibly even Britain is going that way with the debate on the environmental tax,” said Holger Schmieding, senior economist with Bank of America.

Excellent, now go faster, and also in America!

Mankiw's blunder

Greg Mankiw posts that Robert Samuelson has joined the Pigou club in calling for a $2/gallon gas tax. Wonderful.

And Mankiw says:

One purpose of Pigovian taxation, in my view, is to avoid heavy-handed regulations with all their unintended consequences.

Absolutely, a point Kitchen Linker has loved to harp on these last few months.

Approving links to Mankiw have been a feature of the Kitchen for awhile now, even coming to dominate what Kitchen Linker intended to be just another blog about cool tech stuff. But that's good. What could be more important than saving the environment in the most efficient way possible?

Anyhoo, Mankiw makes a blunder in this last post:

I have proposed a more modest $1 increase, in part based on the research of Parry and Small, but of course there is a degree of uncertainty about how high the optimal tax is.

No, no, no! "Optimality" in the sense of correcting for externalities is the wrong, wrong, wrong metric to judge a Pigouvian tax by.

What is the right metric? Is the tax an better than growth-destroying taxes on labor and capital? That's all. Debating optimality may be a pins-on-the-head-of-an-angel-counting excercise for academic papers but is totally irrelevant to the public debate and to reality, which consists of trillions of dollars of taxes on production that could be shifted to taxes on destruction.

Pigou Talk!

Two important updates from Pigou-father Greg Mankiw. First, signs that a carbon tax is being taken seriously in the halls of government. Way cooler, Ray Magliozzi of Car Talk has a page advocating higher gas taxes.

Government employees and public transit

Freakonomics points out that a New York Times article notes that in Manhattan government workers are the group second most likely to drive onto the island (most likely are workers in "transportation, warehousing and utilities"), likely because they get free parking with their government jobs (and probably many get free use of vehicles).

Kitchen Linker says government employees should be required to take public transit or at least should not get any subsidy for private transportation. This will result in more lobbying for better public transit (who is in a better position to lobby than government employees?), better transit, and more of everyone using public transit, in a virtuous cycle.

Be frugal to be green II

stecay makes the case that frugality is the easiest and best way to be green:

A typical, and in my book unimaginative response to An Inconvenient Truth is along the lines of 'My next car's a hybrid'. Other commentators wax lyrical about 'a Prius in every garage'. And so on. Sorry, but I find it hard to buy a notion of the car as a route to ecological nirvana.

It's not very high tech, but the best (and easiest) way to be green(er) is to consume less.

Be generous. Use your car less.

Kitchen Linker agrees.

Bush's Pigouvian opportunity

It is no surprise that in order to pay for massive increases in federal spending (think Iraq and drug payments) Bush will raise taxes. If Bush is smart (stay with Kitchen Linker; even a broken clock is smart twice a day) he would use this "opportunity" to join the Pigou Club and increase the federal gas tax.

Dear GWB,

Extending the payroll tax will not contribute to your legacy. Taking the first step to efficiently save the planet from climate change will. You decide.

Sincerely,
Kitchen Linker

p.s. Top Democrats have good ideas on tax simplification that should be bipartisan. Work with them.

Welfare Sun King

Solar-Powered Welfare shows what you get when you choose planning over Pigou. Tax credits for the wealthy.

Pigou means less planning and it saves the environment. What a deal!

D 1.0 coming

According to Slashdot version 1.0 of the D programming language is coming soon.

Very exciting! Kitchen Linker endorses big compatible improvements to the current paradigm.

D made an appearance in the kitchen once before, regarding green programming.