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Upside Down Under

Labor frees markets? Howard = Bush? Also: Inflammable taxes. Obama. Jimmy. Plus more.

5.23.07

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AUSSIE HAWKES
Re: Hal G.P. Colebatch's A Government of Idiots?:

While reading the article entitled "A Government of Idiots?" by Hal G.P. Colebatch I wondered who Hal Colebatch was. I also wondered from where he had obtained his knowledge of the Australian political system, particularly as his article was published in The American Spectator. On discovering that he had worked on the staff of two Australian Federal Ministers I realized his view of the current political scene in Australia could not be seen as being either unbiased or objective.

Anyone living in Australia at the moment will be aware of the level of discontent that is running through the community at the present time. Discontent which comes from the repeated lies, deceit, and broken promises of Prime Minister Howard over the last eleven years.

While the Australian economy has every appearance of being in good shape, there is a growing recognition among the electorate that this strength is due mainly to the decisions taken by the previous Labor Prime Minister Hawke and his Treasurer Paul Keating, and not the Howard government. Hawke and Keating were responsible for freeing up the market and abolishing the tariffs that had strangled economic growth over several years, a decision which John Howard, the previous Treasurer, was not brave enough to make. The current resources boom is also largely responsible for the strengthening economy, but this will not last forever and Howard does not appear to have any plans in place for dealing with this once it does happen.

While it is not possible to predict how a Rudd government will perform, the mood for change in Australia is very strong, and the people of Australia will ultimately decide if Kevin Rudd should be given an opportunity to form a government. If they do, then I am sure we will find there are no more idiots in his government than there currently are in the Howard Government.
-- Eileen Roberts
Canberra, Australia

My American friends, try to take Hal Colebatch's latest offering about Australia with a grain of salt. His likening of Australian Labor Party leader Kevin Rudd to that despicable anti-American Chavez is well off the mark. A Federal election beckons in November 2007 for Australians and it will indeed be close, sure to come down to a handful of marginal seats. Don't let Colebatch paint this as ill-informed Aussies unable to make the "Right" choice, but rather it should be about the arrogance and hubris of an 11-year-old Government, the highest spending and taxing in Australia's history. A 5-year drought has parched the country and PM Howard has been outflanked by Climate Change. Conservative stalwart Rupert Murdoch is even making sounds to the left about emission trading schemes and reducing carbon outputs. Add to this the relative unpopularity of the Iraq War and George W. Bush and a massively unpopular Industrial Relations reform that overturned 100 years of Australian tradition and law. Given that Australia has 4.4% unemployment, 2-3% inflation, 6.5% interest rates, you would expect the Liberal/Nationals Coalition (Conservatives) to be in the ascendancy. But Australians value the "fair go" above all, and a government that refuses to countenance the important employment rights, environmental issues and infrastructure spending that the nation requires is finding traction hard to gain. If you're looking for an exciting election to follow while you whet your appetite over the upcoming Republican primary battles, Australia is the election to follow, but if you really want to know what's going on, don't listen to crazy Hal "Hugo" Colebatch!
-- Nathan Maskiell
Melbourne, Australia

Hal Colebatch replies: So John Howard is to blame for the drought? This seems par for the course from a correspondent with a "unimelb.edu.au" address.

An interesting article. It seems the political pendulum in the English speaking democracies follows a single trajectory. The are many similarities between 1970s Australian politics and 1970s U.S. politics. The similarities continue to the present day.

I hope the Western democracies do not turn hard left in the upcoming elections in a vain attempt to dodge the responsibilities in the fight against extremism. History's many examples suggest they may do so.
-- Doug Santo
Pasadena, California

HIGH OCTANE TAXES
Re: Eric Peters's Big Oil Outslicked:

Mr. Peters article does a nice job debunking the Big Oil myth, but he is too generous to Big Government. He documents government gouging in the form of end-user and highway taxes. He fails to note the gouging starts at the wellhead and is exacted throughout the production and distribution chain as well: severance taxes, wellhead taxes, pipeline taxes, import taxes, franchise taxes, property taxes on assets, taxes on labor, road usage taxes, ad nauseam. These taxes are also built into the price of a gallon of gasoline at the pump. An accurate accounting of this part of the government's take as well as the end-user taxes is necessary to fully appreciate the avarice of the garden variety politico. The phrase "Government Greed" is redundant.
-- Bud Hammons

Mr. Peters is correct on the issue of taxes. Nothing but living itself is taxed as heavily as gasoline. Merely living, in North Carolina for example, is taxed very highly. I am retired and am extorted to pay 47% of my income in taxes to Lincoln County, North Carolina, some special taxing districts, and the federal government. This percentage does not include the increased taxes I will pay as a result of the tax cuts that were not renewed by our socialist radicals now controlling Congress. Aside from walking and gardening, all I do is live.

But I digress. Back to gasoline. The taxes on gasoline are not so much about raising revenue as they are about shaping behavior. Liberals hate automobiles in the hands of everyman. Cars provide uncontrolled mobility. This may give rise to ideas of nonconformity and thoughts of self-worth. One has only to look at the earnestness with which Mr. Gore exhorts us to conserve...conserve, from the driver's seat of one of his half dozen or so SUVs, while his house is using $35,000 of electricity per year. Mr. Gore, happily, offsets his usage by buying some amorphous credits from himself. This is the liberal model for government: "We tell you what you are permitted to do and you do it. We are entitled to rule you, and are very burdened and stressed by meeting your needs. And so we needn't have with any rules for us."

Liberals like the Moscow model of old. Huge chauffeur-driven black behemoths, streaming smoke, going like hell through empty streets carrying.... you guessed it! The liberal ruling class. The rest of us can wait for buses and trains. No matter the time wasted, the cost in efficiency and productivity. Only liberals ought to have access to cars.

If one looks at the use to which these so-called road taxes are put one would find an increasing percentage of them are being used to fund underused and outrageously overpriced public transit systems. (I recall years ago when the government of then Dade County, Florida, was building its Metro rail system -- the actual cost was perhaps quadruple the estimate -- and Ronald Reagan said with what was spent on that, the government could have purchased a limo for each rider. His guess later proved false. The government could have purchased only a new Lincoln Continental for each rider -- every two years for his or her natural life.)

So like everything else about our system of taxation refined over the last 75 years by liberals who are greatly enamored of the European socialist system, gasoline taxes are designed to move us closer to the ideals of Karl Marx.

And one must wonder -- they seem to be succeeding.
-- Jay Molyneaux
Denver, North Carolina

Nothing like getting an industry shill to write an article explaining why gas is too expensive. The fact is gas is too cheap. The gas tax should cover (among other things):

1) The cost of the war in Iraq.

I support the Iraq war because it is all about securing the oil supplies we need to fuel our lifestyles. Whether or not they had WMDs, they certainly had the means and will to perform military mischief in the region. However, this is costing billions a month and the bill needs to be paid.

2) The cost of all the roads we are constantly building.

Every road we build ends up generating more traffic. Here in Houston we are spending a ton on the expansion of our East/West corridor to the suburbs. As a result, people are moving even further west and Houston is continuing to grow. The freeway will need another expansion in 10-20 years and will need ongoing maintenance in the interim. Where will all this money come from?

3) The need to replace oil eventually.

They don't make it anymore so no matter how much there is right now it will eventually run out. Someone is going to have to pay for all the research needed to find viable alternatives.

4) Public transportation.

Part of the solution in some areas is public transportation. We need it to reduce fuel consumption and it costs money. Furthermore, when gas is cheap enough many people will choose a car because it is more convenient.

All of these costs and more should be paid directly by a substantial tax on everything refined from oil, including gasoline. I am one of those nut jobs that want to see gas at $4+ a gallon because it will inspire people to make choices that reduce overall oil consumption. Plus, those that choose to drive a 10MPG behemoth will pay their fair share of all the real costs of the energy they use.

Wake up! We live in the equivalent of Disneyland. If we want to stay rich, we have to find ways to reduce our dependence on the mostly hostile and dangerous countries that control most of the oil. The only way to do this is to stop using so much and find alternatives as soon as we can. Unless we do this, our young men will continue to die defending the resources we need.

Thanks
-- Tom Cabanski

After reading Mr. Peters's article, I took his advice and did the math. Using his figures, I discovered that using $50 worth of gasoline per week at $2.75 per gallon means that I would use approximately 18.18 gallons of gas per week. At $2.75 / gal, I would spend approximately $2,600.00 on gasoline per year. For the sake of argument let us stipulate that the federal, state and local taxes equal $572.00 of that amount. The taxes would equal 22% of the cost of the gasoline.

Now if we raise the per gallon price of gasoline to $3.15 / gal, the yearly expenditure would amount to $2977.84, an increase of $377 or 14.5%. But, as the dollar amount of gasoline taxes is a fixed amount in virtually every state in the union, the taxes paid on the higher amount is the same as that on the lower, $572.00 per year. At the $3.15 / gal rate, the amount of the taxes equals only 19.25% of the purchase price, rather than 22% of the $2.75 / gal rate. Based on this, the consumer actually pays a lower tax rate on the higher priced commodity.

It was a good try, but you cannot link taxes to the fluctuation in gasoline prices. These fluctuations are controlled solely by the oil producers, the refiners, the jobbers, the wholesalers and the retailers; and no one else. The price of refined petroleum products is set at the level that will maintain a profit margin of approximately 10% for refiners. It must be remembered, that profit margins, unlike gasoline taxes, are a function of percentage charged rather than a fixed dollar amount. Therefore, any increase in the price charged for refined motor fuels will result in an increase in the actual dollar amount of profit earned by the refiners.

The point here is, that the oil companies never lose if they maintain their profit margins and can win big if they are successful in raising the selling price of their products. People can go without milk, but they cannot go without petroleum products. Fuel is a unique commodity in that regard.
-- Michael Tobias
Fort Lauderdale, Florida

Having gained my rudimentary comprehension of market price by reading such journals as The American Spectator and the writings of conservative authors such as Thomas Sowell, I find an article like Eric Peters's blaming the government for high gasoline prices due to taxation to be incongruous. It seems to me that should all governments, local, state and federal, immediately rescind all taxes, that the price of gas would remain the same as this does not increase the supply of gas by a single gallon. Without an increase in supply, current demand would ensure that the price remains the same. What was paid in taxes would go to the oil companies. Gasoline would be no cheaper for the working poor than it is now.

The real crime of the government is that through regulations that restrict discovery, recovery and refining of new supplies the government has artificially limited the supply of oil and its by-product, gasoline. Herein lies the blame we should assess the government regarding higher prices. In a less restrictive (and less taxed world), the "excess" profits the oil companies made could readily be re-invested in new sources and new refining capacities, thereby increasing the total supply. In tandem taxation and regulation have worked to limit the money available to re-invest and the opportunities to do so. Attacking government taxation as the source of high gas prices may have a populist appeal but, in the short run, it provides no real answer to the real problem of providing the supply we need to meet the demand at prices we consider comfortable.
-- Pete Jermann
Olean, New York

HANDS OUT
Re: Philip Klein's Obama in the Granite State and Erem Boto's letter (under "Root Cynicism") in Reader Mail's Desperate Decisions:

It is troubling that after years of historical experience, both Barack Obama and his defender Erem Boto still believe terrorism and the "clash of cultures" can be averted with foreign aid. When faced with real hate and threats, liberals think our adversaries can be bought off.

When the subject is violence, the liberals' diagnosis breaks down to poverty and thousands of young men milling around with nothing to do. Ideas have nothing to do with it. Pride has nothing to do with it. Desire for power has nothing to do with it. Revenge has nothing to do with it (unless evil "Amerika" is in the mix somehow).

We live in a world in which vast populations do not think as we do and do not feel as we do. For all the condescending talk about multiculturalism, the left and some segments of the right display what anthropologists call "pluralistic ignorance": the naive sense that at bottom others are like us. In a Disneyland state of mind, the costumes and customs are all interchangeable; but underneath it all we are all "human with the same human needs, hopes and interests."

Affluence, education and gainful employment does not turn third world denizens into the warm-hearted, sensible, rational, and urbane people liberals imagine themselves to be. There is no law of nature which dictates that all civilizations will fully evolve into the modern age to be the same. It is time abandon the old hobbyhorses and engage the world as it is. When an adversary tells you he despises who you are, what you do, what you believe and how you are changing the world around him, its pretty much a safe bet he means it.
-- Michael Wm. Dooley

PROJECTING
Re: Paul Beston's I'm Jimmy Carter, and I Can't Help Myself:

I suspect that late at night, when Jimmy Carter writes his funny-books beneath the blankets, he understands what he is and what he did not do. He may even know how much damage he did America, and that nothing can ever change that. But when the sun is up he holds the past at bay by running his mouth. (Hello. I'm Jimmy Carter and I'm running for cover.)

As he reprimands the men trying to bring peace to the Middle East, it must occur to him that had he possessed the testicular integrity needed to keep the Shah on the throne of Iran, much of the trouble there would be of far less import, and far more easily contained than it is today. But he let the man who had been our friend and ally be undone by a mob of scripture-slapping gunmen. Were a man like the Shah in charge in Iran now, the entire region (including the Soviet Union) would be far more sedate. America would have more than one puny ally in that part of the world, and the Islamic Death Squad would not have an office in every city in the second and third worlds. (And there would be no maniac little rug merchant in Iran building an H-bomb and ending every phone call with Death to America.)

If Carter had stood his ground in Afghanistan, had put a thousand men on the ground and let the Soviets know they were going to pay for their occupation of that country, it would not have been necessary to coddle and finance the Islamic barbarians who wore Russia down and in the process acquired a taste for the blood of civilized men, women and children.

Had Iran and Afghanistan been secure, there would have been no need to nurture Saddam Hussein in an effort to prevent a Muslim movement in Iraq and Soviet control of every oil field in the Middle East.

Had all that been done, had Jimmy Carter had something more in his pocket than a hymn book and a copy of Love Story, we would have missed the OPEC-driven Great Inflation of the late seventies, an experience as debilitating and awful in its consequences as the Great Depression of the thirties. Without it, we would have missed the severe recession of the early eighties.

We might have missed the Cuban boatlift, and all the subsequent events that enabled Castro to smack Carter's butt with a slapstick. There was Nicaragua. And the hostages. And so much more, but no time to talk about the rest of his faltering steps down the road to full buffoonery. Summarize by saying this: When he was president he behaved like a rural Sunday school teacher. Now that he's a rural Sunday school teacher he is trying to make noises like a president.

But now his surly little yips and growls are giving aid and comfort to people trying to kill our soldiers, and who will kill us if they get a chance. Today Mr. Peanut's petulant snarl is more than an embarrassment. Today his have-a-nice-day pacifism is a genuine disgrace.
-- Edmund Dantes

QUESTION PERIOD
Re: Ralph R. Reiland's Getting Crazier by the Week:

If these sham debates are to continue, then perhaps the candidates might be queried about the following to ensure the debates' true worthlessness: Does water run up or down hill? Is the earth flat? Do you believe in the Tooth Fairy, Boogey Man and/or Piltdown Man? Who's buried in Grant's tomb? Did Bill Clinton inhale or didn't he? Though it's been more than two years when he vowed to do so, but still hasn't, John F. Kerry will keep his word and release his full military records, right?
-- C. Kenna Amos
Princeton, West Virginia

CELL OUT
Re: Michael Fumento's Adult Approaches:

Stem cell therapy will become effective a year after solar cells become economic, which will be one year after the Brazilian economy grows strongly.
-- David Govett
Davis, California

BLAMELESS
Re: Enemy Central's To Your Stealth! :

Good column. The U.S. has about the same blame for 9/11 as a rape victim has for being...a woman.
-- Sonny Lykos
Naples, Florida

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