Archive for May 2nd, 2008

The cost of food has gone up, and it has gone up around the globe. A fix for this can be done by the Government using the same solutions as is used to supply energy to the world.

  1. We allow the largest companies to create a standard of what flour, sugar and other food products are. We allow states to mandate in the interest of public safety who can transport food, and we allow states to work with the largest suppliers of food to limit the choices to the public of only the safest and most environmentally friendly foods.
    • This will allow the government to oversee the production of food across the US. The government will ensure that everybody will have more to eat and keep the price of food down.
  2. We limit the distribution of food across state borders to only companies which have agreed to be fully regulated.
    • These companies by virtue of their size will be able to produce food at the lowest possible price.
    • We limit the amount of food consumers can transport to what can be kept in their homes for a one week period. And if traveling over a state border they can not transport food in a trailer other than an RV.
  3. We disallow home gardeners to sell food which is often dangerous by virtue of the fact it has not been tested. All produces of food must have the highest quality testing of the food.
    • While the test facility for the food is expensive, if you consider the saving that the volume of production creates the consumer will actually save money.

    The government will be able to pay for its involvement by a minimal tax on the wholesale production of food, and still keep the consumer prices lower. Aid will be provided to those who can not afford the less expensive food by this tax. Children will be allowed to eat for free and there will no longer be children going to bed hungry. This tax will be enforced by the IRS and checked against government records to insure all producers of food are properly registered.

Popularity: 22% [?]

I myself don’t much care for oil companies; they seem very un-American to me. And with their high profits from the increase of the cost of energy while mom and pop companies struggle and few companies are hiring new employees, they of course set them selves up to be the target of taxation.

In fact GDP barely grew by an anemic 0.6% last quarter. GDP or Gross Domestic Product - is the total (gross) of all products sold in the US, including imports and gasoline. Without the gasoline in the picture we may actually be in a recession: if not for the oil companies saving us from that label.

So Hillary wants to tax the capital gains of oil companies or their profits. What would be the logical end result or the effect of that?

  1. If we consider how a oil company can increase its profits over the other companies … the way to do this is by reducing its cost to produce a gallon of gas. If a company were to use biofuel and make gasoline at 80% of the cost that the other companies can then it can do one of two things, reduce the price to force the other companies out of business (this is illegal) or increase its profits by 20%.

So the end results of Hillary’s plan would be to put American oil companies in the position of keeping their costs as high as possible and make the maximum legal profit. If they want to make more money then the price they pay to make gasoline needs to go up … they will then make the legal percent (lets call it 10% for an example) and have a greater income. IE 10% of $3.00 is $0.30 market buys 1,000,000 gallons they make $300,000. If their cost goes up to $5.00; 10% of $5.00 is .50 and lets say people can not afford to drive as much only 900,000 now they make $450.000 for less product. At $10.00 a gallon; 10% of $10.00 is $1.00 now people really can not afford to drive and only buy 500,000 gallons; so for 1/2 the effort and 1/2 the actual refining costs now they make $500,000. Hillary is happy, they are happy and the consumer is a fool who is trapped in a government regulated nightmare - maybe he can apply for gas stamps which can only be used to drive to work.

A free market solution would allow any body to refine gasoline, Diesel is remarkably easy to refine as is Biofuel; if not for the government restrictions on the freemarket to refine fuel - anybody with say $1,000,000 could set up a refinery. If one company is stupid and increases its cost to produce fuel the other companies increase their sales and the stupid company goes out of business. All companies compete for the same investment capital and attempt to make the most money for the dollar the one who has an innovation that reduces the cost of fuel will increase its profits and attract more investment capital to expand its production, over time another company follows the first company and the price is forced down … stupid companies are forced out by free market economics.

With a little due-diligent thought it seems to be clear that the US will be better off with a free market that allows new players.

Popularity: 64% [?]