I Think Too Much

I stopped at a gas station the other day to grab a bottle of water.  It was a Citgo station and I won’t buy gas at Citgo’s because of Hugo Chavez.  But I do buy water or other snacks since the guys that own them don’t have a say in Venezuela.  Anyhow, there was a little sign by the cash register that showed the total gasoline tax hit in each of the 50 states.  In Wisconsin we pay a total of 51.3 cents on EACH GALLON OF GASOLINE!  Compare that to Kentucky where the combined taxes are 36.3 cents per gallon.  And now Doyle the Dunderhead wants to tax us an additional 7 cents a gallon.  And no, I don’t believe that we will be able to legally stop oil companies from passing along that tax to us.  Pricing a gallon of gasoline is just too damned complicated to prevent hiding that 7 cent tax as an increased cost.

But what gets me is that here in Wisconsin we have this never-ending complaint by the state and local governments that we just don’t pay enough in taxes.  Look at the schools.  If only we paid more in taxes the kids in Milwaukee would learn how to read and might even graduate from high school.  The kids in the suburban school districts wouldn’t have to try to do with less than the very best if only we greedy taxpayers would fork over more.

But I don’t want to argue about paying the taxes.  That argument is stale and overused. No, my point is “what the hell do they do with the money that we give them?”  Look at our roads.  We pay this staggering amount of gas tax in addition to high license and registration fees.  Not to mention that a portion of our income tax goes to road work as well.  And what do we get? Have you ridden on our roads lately?  I put on about 125 miles a day on average.  Most of it is in the Milwaukee metro areabut I also get out on the interstate highways.  I’m about to lose my fillings on some of those roads.  Look at bridges and overpasses.  You can see re-rod showing through on some of them.  That’s on state and interstate roads.  My point is, what the heck are they doing with all of the money that we are sending them?  Where does all of that money go?  When I’ve complained, I’m told that there is not enough money in the budget.  Why?  At the rate that we tax in this state, we should have the finest roads in the country.  But I assure you, we don’t.  In fact, some of the best roads in the country are in states where the taxes are lower than here.  Take Kentucky, a favorite place of mine and my future home.  State, county, and interstate highways are smooth and well-maintained in spite of being pounded around the clock by coal trucks that can legally scale off to 125,000 pounds.  And eastern Kentucky, my favorite area, does get snow and freezing cold and they do use a lot of salt.

Roads are just one area of ire.  Take your schools.  Even in some of the poorest areas of Appalachia the schools are modern and well-maintained.  Yet, the taxes are about 1/5 of what they are in Wisconsin.  My house in a Waukesha County town is a modest 1300 square foot ranch.  The taxes are nearly $4000 a year.  That same house in Floyd County Kentucky would be taxed at about $900.  Yet, we are told that we have to pay all of that big money in order to build and maintain school buildings and hire great teachers.  In fact, we are told that the schools have to hit us especially hard to pay for our schools.  Where is all of that money going?  What are we getting for all of our high taxes?  Why aren’t our schools so much better than the ones in lower taxed states.  They aren’t and the education that the kids get in eastern Kentucky is, I submit to you, just as good if not better than what they get in Milwaukee.  Indeed, the graduation rate is every bit as good in Kentucky.

Parks, we are often told, are the golden jewel and why we have to pay such high taxes along with hefty daily use fees.  Interesting, state parks in Kentucky are free. (You still have to pay a modest camping fee.) You don’t have to buy an annual state park pass or buy a daily sticker.  Heck, you don’t even have to pay to launch a boat! Take a trip to a Kentucky State Park and tell me how much worse it is than the ones in Wisconsin.  I’ll take the Paintsville Lake State Park any day.  The Cumberland Falls State Park is clean and has well marked trails.  It is also huge!  Where is all of that tax and fee money going in Wisconsin?  Why aren’t our state parks meticulously groomed and all equipped with flush toilets? 

You see the point here?  It isn’t Wisconsin versus Kentucky.  It’s why aren’t our facilities and infrastructure equal to the amount that we pay in taxes?  Why isn’t everything about Wisconsin the best of the best–equal to our high level of taxation?  I’ve traveled to most of the states that have low taxes and it, frankly, pisses me off that Wisconsin’s state and local goodies are no better than what I find down there.  I have asked this question of politicians at the state, county, and local level and I can’t get a straight answer. 

It is getting to the point where we in Wisconsin are resigned to high taxes.  So, we need to start demanding solid gold services and amenities for the high prices that we pay.  Look, if I buy a Cadillac or a BMW, I expect that it will be a car way superior to a much lower cost car.  Otherwise, I’m getting screwed.  A Mercedes Benz 450 SEL is a very expensive car.  But it also comes with enough luxury and goodies to make the price paid worth it.  Well, with the high taxes that we pay, we better start demanding more for our money.

It did to mine.

My wife had the day off today and we spent a good part of it just walking around the Historic Third Ward area.  My hat is off to the City of Milwaukee.  They are doing a wonderful job down there.    You’d hardly know that it was old rusted smokestack Milwaukee.  We didn’t do much browsing in the shops.  But the Milwaukee Public Market and all of the little cafes and restaurants are really nice.  We’ll probably go back again some evening and take in a dinner and some jazz.

Just when you think that they sink any further into the abyss, the Fred Phelps bumbling herd crawls up out of the muck and mire and reminds us of why no decent Christian organization wants to be around them.  To wit:

http://www.foxnews.com/story/0,2933,273313,00.html

Charlie Sykes mentions every so often that kids don’t learn about economics in school anymore.  Well, I say “What, anymore?”  The only class in economics that I took was after I had graduated college and my employer at the time demanded that I take at least SOME training in economics.  After all, I was working in the finance industry at the time.  I learned most of what I know about econ by 1.) experiencing it first hand, 2.) learning about it from a very shrewd mentor at the company that I worked at after college, and 3.) from my late grandfather who read voraciously and even though he was a retired cabinetmaker loved the topic of economics.

I love watching how the laws of economics play out on the grand scale and even locally.  People just don’t seem to quite get the concept of supply and demand and how things are constantly changing those two key characteristics.  Take oil for instance:  So many folks seem to think that the price of oil is some arbitrary figure decided on in the Exxon-Mobil boardroom.  I not just talking about the man on the street.  Congressmen and senators and governors and folks who wannabe one of the above, all think that government can step in and throw the bums in jail and the price of oil would come tumbling down to where a gallon of gas sold for the same 28 cents that I sold it for when I worked in a gas station in high school.  Things simply don’t work that way.

First off, even if we pumped every last barrel of our own crude oil, didn’t buy a single barrel on the world market, we would still be dealing with oil priced at whatever the world market says it should be priced at.  If we stupidly charged only, say, $20 a barrel (and we couldn’t even cover our costs at that price) the demand for that cheap oil by the world market place would drive it up to where we either simply could not pump enough and would then have to buy on the world market to meet our own demand, or we would have to raise prices to match that worldwide price because all of our other costs (oil drilling technology, exploration technology, transport technology) would be based upon the worldwide costs.  No technology dealer would undersell just to us.  Well, production costs have to be rolled into whatever price is going to be charged.  No crude oil producer is going to sell at less than his costs.  Indeed, his financial backers (called “investors” kids) would either demand a certain return on investment or they would take their money out of his operation and go invest it elsewhere.

Part of those costs are the costs imposed by government.  I get a real kick out of Gov. Jim Doyle’s idea that he can impose a tax that won’t be passed along to consumers.  If indeed he were somehow to violate every known economic concept to do this, the costs of tracking that money would be way beyond and above of what he would collect!  Remember, any tax is a cost imposed by a government.  If it comes out of the bottom line, then the price MUST be increased to cover it so that the investors would get the satisfactory return on their investment.  If I were fortunate enough to hold 5000 shares of Exxon-Mobil (oh how I wish!) and the company were hit by a non-recoverable charge (read: tax by the State of Wisconsin) that caused my investment return to drop to where I could get more from another company, then I will sell my shares and buy into another company to get that return.  If the price of Exxon-Mobil drops far enough, the shareholders will demand of the board of directors an infusion of profit.  So, the price of gasoline goes up.  Now, here’s what I want the governor to prove:  Did it go up as a result of the tax being passed along to consumers?  Or did it go up as a result of the shareholders demanding a bigger return on their investment?

Those shareholders are not just you and me and the little old granny down the street.  They are also big, huge, investment portfolios for mutual funds, pension plans, college endowments.  If one of them decides it is time to yank their 500,000 shares of Exxon-Mobil because the return on investment is dropping off, that movement has an incredible earthquake-like effect on Wall Street.

What I’m trying to point out here is that the economics of the oil biz (and the airlines, and the auto industry) is not as simple as “sell more oil”, “pump more oil”, “make more cars”. Back in the  recession of the early 80’s some folks where saying that some of the steel companies should just continue to make steel regardless of whether it was being sold, just so that the steelworkers would continue to have jobs.  Frankly, that is why the steel companies WERE in trouble–they continued to make steel when no one was buying it.  And they continued to make it using old technology that was way more costly than the technology of their foreign competitors.  But to me, that sort of thinking is also why we are such a lame-brained country when it comes to economics.  Folks simply don’t understand how money works.  They think that money, cold hard cash, has value in and of itself.  No, that quarter in your pocket is simply symbolic of the value of one-quarter of a dollar.  If the mint stamped out a bazillion quarters, it wouldn’t be making more money, it would be producing metal stampings with a decreasing value because there would be more of them. That is why the 1916 German 1000 Deutschmark note that I have in my dresser drawer is not even worth the paper that it is printed on.  The German economy was so ruined by the mass production of paper money that its very paper bills did not buy a blasted thing much less the loaf of bread.

Well, now you see how my mind works.  I’ve gone far astream of where I intended to go and my wife is getting peeved at me for being on the computer so long.  I’ll find something else to think about tomorrow.

Hello world.  Basher51 here.  Don’t ask how I got that name.  I don’t even know.  One day I signed up for a Fox6 blog and they asked for a user name.  It was the first thing that popped into my head.  It is vaguely similar to the call sign of Capt. Scott O’Grady, the US Air Force pilot who was shot down over Bosnia and survived on his own for a few days while the enemy was looking for him.  He eventually was rescued.  His call sign was Basher 5-2.  For some reason I was thinking about him and that whole episode about the same time as I signed up for the Fox6 blog.  So, somehow that influenced me.

That is pretty much how my brain works.  I think way too much.  I mean way, way, way too much.  Ever since I was a little kid people told me to just do stuff and not think so much about it. Sorry, that’s just me.  A few years back I thought my way into a case of Generalized Anxiety Disorder.  That was no treat.  But some decent SSRI’s and a better than decent psychologist got me over the hump and now I don’t think quite so much. I know the warning signs.

One thing that I learned is that I don’t need to think about so many things.  I was a firefighter for 26 glorious years.  The department will remain un-named.  It was a terrific job and I really wish that when I started it I had known about things such as being overly analytical.  One thing that I learned as a result of GAD is that thinking when reacting is called or is a bad thing.  “Shut your brain off and do the job” was pretty much what the shrink advised.  Don’t think about what you are doing–that is what your training is for.  You react the way that you were trained.  When I go bowling or golfing I don’t sit and think about each motion.  The same with doing the old job. 

So, now I do a different job.  I’m an inspector for insurance companies.  I inspect residences, offices, factories.  A neat job.  A good thng about doing it is that I have learned to think less and rely on my training.  It makes for a great job.  I put on about 125 to 200 miles a day. (Yes, gas prices suck!) That gives me a lo of time to think.

What to expect?  Analysis, thoughts on trends and current events.  Some political analysis. And the end product of my fascination with economics.  I think it will be interesting–to me at least.