They are sticking with their story, while saying other people are distorting things to their own ends ...
Oil prices go from 20-to-40-to-60-to-80-to-100. That's a five-fold increase. As expected, consumption, especially gas consumption, is inelastic.
So, given that the theory just doesn't hold up, ask your favorite Pigovian if their backdoor plan isn't really just a way to shift to a consumption tax, rather than an income tax, since Pigou-style taxes appear to have minimal or no affect on curbing usage.
(Yes, we know that it's all part of a scheme to later on drop the revenue-neutral requirements. Congress has a way of not being able to keep its fingers off revenue streams ... just look at how much Bush has dipped into the social security stream to claim his budget is 'almost' balanced, as will the next President, if we don't demand better).
Meanwhile, in fairness, the main Pigovian asks the punditeers, like me:
Let's see, there are several ways to go about this.
To judge whether my conjecture [Greg Mankiw] is correct, ask your favorite pundit of the left the following: What health reform would you favor if the reform were required to be distribution-neutral? That is, you can change the rules of the health system but you cannot change the distribution of economic resources between rich and poor. My guess is that your favorite pundit would either object to the question or answer by retreating to more modest reforms. If so, this suggests that calls for sweeping reform are mainly motivated by the desire for increased redistribution.
A) Show me that the top, say, 1% of income earners are being compensated at their marginal productivity of labor, and then I'll answer. In other words, you make it sound like "stealing" just desserts, but are these people really THAT much more "valuable" than everyone else, or is something else in play? [...throw in some statistics on downward mobility from the top brackets, too, if you have it handy, to be convincing].
B) Have a look at the potential savings from re-arranging things, cutting out the middle man, and driving excess cost out of the system, essentially reversing the price-inflation trends.
C) If that's not enough, then yes, we can accept some redistribution and acknowledge that is a path but not the goal, especially since it may well increase the overall size of the economic pot, i.e. it may include a benefit for "the rich", by raising worker productivity (even as slight amount as 0.5% would probably be enough, or about 1 more day at work per year per worker rather than "sick", theoretically). There is another way it benefits the rich, too. Ask General Motors if they would like to have someone pick up their health care liabilities. Then ask their "rich" shareholders if changes aren't going to be good for them, too ...
Over to you, meastro.
(If we second-guess your own motives, can we say, fairly, that you see the freight train coming and you are just trying to slow it down enough, in your way, so that the Republicans can undo the changes later?)
