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The Current Stagnation of Natural Gas Vehicles in America

A good balance of comments. For those who favor domestic oil production, perhaps I would be more sympathetic with your comments if I ignored the environmental impacts of same. What has not been mentioned in this stream is VERY important to turning the corner. A bit off subject, but intimately interrelated to the issue.

Consider the following four giant effects on tax policy that those who only look at the income tax seem to conveniently forget:

1. Our effective cost per gallon of gas is ~$10.00 when one factors in the roughly $30 billion dollars in tax subsidies ANNUALLY provided to the oil and gas industry. This is the most egregious, downscale tax imaginable. Moreover, the oil and gas companies simply need to bid and secure future leases and INTENT to drill for the largess we reap upon them every year. This ponzi scheme against the American taxpayer is one of our dirtiest tax secrets.

The attempted movement away from an oil-based economy is long overdue. Eliminating these subsidies and replacing them with a carbon tax and offsets would be a dandy replacement for current outlays while returning the investment towards modernizing the electrical grid and smart energy technologies while contributing towards deficit reduction. Even an oil guy as purile as T. Boone Pickens has attempted to wake up and smell the coffee.

2. Add to that tax subsidy the protectionist import rules on sugar, milk, etc. Removing sugar tariffs alone and replacing this supply with a much more efficient cane sugar ethanol source could end the corn producer/fertilizer manufacturers stranglehold on the taxpayer's neck. If one wants to make the small farmer argument, then set resdiency, gross receipts and size requirements on farm subsidies. This reward for planting inefficient crop supply and for NOT PLANTING crops drawfs even the oil subsidies.

3. For people who don't count the payroll, FICA, SUI, etc. automatic worker payroll contributions while conveniently ignoring the offshore accounts, shell businesses, and other manipulative uses of the tax code by those who can afford tax attorneys, don't be so quick to condemn the extra pittance through earned income tax credits, adjusted rate schedules for wage earners and such put into the pockets of those who actually contribute a day's labor for a fair wage vs. the incredible sums paid to those who move money through the system. Look where that system of rewards has put us.

4. Finally, would someone please explain to me why there is a ~$100 K cap on wage contributions to Social Security?

Efficient Markets Present Opportunities for Savvy Buyers

People are bandying about alternative meanings of Efficient Market Theory (and there is enough historical data to class this economic explanation as a theory). Some are calling it wrong, and that markets are inefficient, because of government intervention. Some misuse the word "rational" in place a efficiency.

If everyone will dust off their Burton Malkiel ("A Random Walk Down Wall Street), he effectively, efficiently and expertly deals with why this approach to long term investing is the best and safest strategy for investors.

His historical analysis, dating back well into the ups and downs since well back into the 1800's, factors in all of the comments about investor psychology, market conditions, access to information, etc. Though impossible to summarize his analysis in a post, basically he proves conclusively:

1. Technical analysis, reading tea leaves, hoping that the past movement in stock patterns predicts the future is simply wrong. For every guru (whether its the current doom machines like Rubini or the tech gurus of the late 1990's) with a system or explanation, there are always unforeseen counter forces moving patterns back to the mean.

2. We have always experienced market bubbles and we always will. These don't point to inefficiencies in markets, simply a demonstration of the greater fool who tries to guess or time the market.

3. Any historical analysis of asset classes and ROI comes up with roughly the same conclusion: stocks = ~8-11%; bonds = ~4-6%, etc. His recommendation about diversification clearly extends beyond investments in the stock or bond markets.

4. As boring as the approach seems, the only logical way to invest is broad diversification, dollar cost averaging when this is feasible, and stock investment predominantly in broad indexes that track the various market caps. In fact he suggests that the Wilshire 5000 is the best predictor of long term return of stocks.

I know. The counter to EMT is that in the long term we'll all be dead. Though I'm one of the current suffering along with all of you, I'm willing to admit that I'm not smart enough, unable to collect and absorb information that result in enough correct guesses to win the lottery, and unwilling to risk losing all my investment when a formerly "safe" company goes belly up.

I've ridden that rollercoaster since before 1987, and the worst that I can say is that I've lost no more money than the "active investor".

As for evaluating market inefficiencies and government ideology, it was the ideological mess of supply-side, Friedman shock economics and the Laffer Curve that got us into this mess, discounting all of the micro reasons (repeal of Glass Steagall, deregulation, creative debt obligations, etc.) driven by the theorectical approach, so I wouldn't recommend ever trying to figure out any magical answer to running an economy or market investing.