Thursday, April 27, 2006

Economic notes of the day 

Yesterday was "tax freedom day," the day on which the Average American stopped "working for the government." Meaning that if we imagine that Average American paid all his taxes for the year up front, he would get his first take-home pay today. Blogger Will Franklin has a don't-miss post on the subject, with nifty tables and such. You can see how early tax freedom day was in previous centuries. Before World War I it landed on January 20, and it moved from roughly February 10 to April 1 under The FDR, peace be upon him. The last big ramp was during the Clinton years.

Blessed as I am with a New Jersey residence and top federal and state marginal rates, my own tax freedom day remains in the future. My top o' the Post-It® Note calculation puts mine at roughly June 10. No wonder I think gasoline remains a great value!

Speaking of which, check out Mr. Franklin's even better post on the question of higher gasoline prices. Rather than merely rant and rave, Will demonstrates with pie charts and stuff that the disposable income of Americans has increased far faster than gasoline prices over time. He also shows that prices for virtually every other important category of consumer purchases, including rent, owned housing, food and medical care, have all increased faster than gasoline over the last 25 years, and that the oil industry is not particularly profitable by the standards of American industry (a point I made a couple of days ago in my hearfelt pean to the oilmen).

Notwithstanding my rants and Will Franklin's graphs, people obviously care a lot about gasoline and that fact has a huge impact on the national mood and therefore the political fortunes of incumbants. Bill Clinton, the last millenium's most attuned American politician, was (supposedly) obsessed with the price of gasoline to the point that he was afraid to press the Saudis to cough up the Khobar Towers suspects for nasty interrogation at the hands of Louis Freeh (thereby preventing us from "proving" what we all suspected and subsequently proved, that Iran sponsored that attack on American servicemen). Supposing for a minute that Bill Clinton understands his own obsessions and that Will Franklin and I are correct that gasoline remains a great value, why do Americans care so much about gasoline prices? If you think you don't know, Megan McCardle has a useful thought or three on that subject. I don't agree with all of it, particularly her claim that "it's very difficult and painful to economize on," which I think is flat wrong, but as usual she makes you think.

Finally, I note that the Euro is moving up against the dollar, having climbed above $1.24 the last couple of days. The dollar remains stronger than it was 390 days ago when The New York Times declared that "the dollar is headed down, no matter what" and blamed that arguably useful condition on the Bush administration, but if there is momentum behind the Euro's current move the Grey Lady may yet be proven right, at least in a "broken clock" sense.


By Blogger SeekerBlog.com, at Thu Apr 27, 01:35:00 PM:

Thanks - a useful collection of resource links.

Here's another first-rate economics resource: Steve Conover's Skeptical Optimist. Steve describes himself as "a semi-retired ex-Fortune 50 executive". I wrote a short post early April on his International Debt Thermometer and his historical US debt/GDP charting.

Steve's latest is a real hoot "National Debt Whack-A-Mole".  

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