Tuesday, May 19, 2009

Credit Cards and CAFE Standards: Some Good Ideas, And Some REALLY STUPID Ideas..

Buying Gas With a Credit Card: There's Flirting With Disaster ....

This time last year, doing that was the equivalent of financial Russian Roulette. Luckily, gas prices have dropped since then - and gone back up some. Today might give you just a little hope that Washington DC is not an amalgamation of 535 morons who don't get it 24/7. Sometimes, they actually hear, and act. They're just stupid and disconnected most of the time. But, when Americans truly band as one, even Congressmen and Senators get it...





Today, a double whammy for the Average Joe occured today. First, the announcement that Detroit would finally get in line with what Japan and Europe have done for a while, and start producing - almost by force - more fuel efficient cars. Not that they haven't already got the technology, they just don't use it enough. Right now, the average MPG on an American car is 26. By 2016, it will be 35.5 MPG. It would save about 1.8 billion barrels of oil, and in my estimate, lower the price of gas as well. Less demand means lower prices, my economics students!

Yes, cars will cost more because of it, but they always cost more, and the cost will be offset by savings on gas. One bad part is that it's estimated that it would cost Detroit about $47 Billion , but it does help Detroit in a very important way. Instead of manufacturing numerous different emissions systems to comply with different states (ever hear of California Emissions?), they now have one set of standards to follow. That will make them more efficient and save money in production - remember Economies of Scale, class... Now, if they could just work on those Unions.....

Now, onto the stupid. I heard one suggestion, and here is my reply. Thomas Friedman, you are an idiot, and you should have your Economics Degree taken away. Friedman's suggestion to reduce oil consumption was not in efficiency, but in - GULP !!!! - raising gas taxes by 47 cents a gallon. All together now - RETARD !! If we learned anything from $3 a gallon gas, it's that we will bitch and complain, but we still have to drive, no matter what it costs. Raise taxes 20% and cosumption goes down 3% - pretty inelastic demand there, folks... The same advice goes for the dopes that think if keep raising cigarette taxes, that everyone will quit smoking. Duh..... smokers are addicted to nicotine - they're not gonna quit.

Meanwhile the scourge of the Earth - credit card companies - got their butts taken to the woodshed today. Gone are the days of 'you were a day late twice in the past year, so we're raising your interest rate 20 points'.... Now, you must be late by 60 days before they can raise your rate. They also changed rules regarding teaser and introductory rates as well. Hopefully, they also fixed late charges as well by capping it in some way as a percentage of the balance. Paying $39 extra on a $500 card balance for being a few days late is ridiculous and usurious. Yes, I just used the word usurious in a proper sentence !!

Yes, i am very Pro-business, but even the financial sector needs just a little bit of regulation. In that vein, I will say this: the most important part of avoiding credit card debt is in the responsible use of credit by consumers. When we only use credit for emergencies, and not to waste it on toys we don't really need, then we truly have the power over lenders....






On the other hand. THIS is very inefficient use of gasoline........

http://www.youtube.com/watch?v=zQ_u48_fmDc

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2 comments:

mg said...

This was very good Mike

Thoroughbred 401k said...

Thanks Moye, I worked very little on it... ;)