How to structure a gas tax? You could make it a flat X cents per gallon; alternatively (and this is essentially what a cap-and-trade system does, too) you could make it Y%, with the tax increasing with the price of gasoline.
I’m a bigger fan of this morning’s Geithner/Summers op-ed than Simon Johnson is. As a statement of where we want to be it’s a good one; I especially like the way that, by regulating OTC derivatives trades, Geithner and Summers are taking a rather more sensible route than trying to make all derivatives (or all credit derivatives) exchange-traded. I also like the way in which capital requirements for banks will rise with banks’ size — it’s a good incentive to stay small(er), rather than, Lewis/Weill-style, going on massive acquisition rampages.
I’ve been glued to my Kindle all day, reading Charles Kenny’s compelling and important new book, The Success of Development: Innovation, Ideas and the Global Standard of Living. Kenny is a great writer, and his book is a true pleasure to read; it’s also a crucial addition to a development literature which has gotten bogged down in debates which will never be satisfactorily resolved.
One of the great things about working for Reuters is that I get to pester journalists who actually know what they’re talking about. So after reading Timothy Gardner’s story on the cap-and-trade bill today, I got him on IM, and learned a lot — not least that Waxman-Markey is being considered more of an all-encompassing energy bill, as opposed to simply a way of creating a cap-and-trade scheme. Which on the one hand means that it can be loaded up with enough pork to make it pass, but on the other hand makes everything much more complicated: