But not a socialist. What's become of America that we now have politicians that can actually go around talking like this and not be written off as dangerously intoxicated with the powers of government?
A price signal is just a term applied to the idea that people respond to prices. When prices rise they consume less and when prices fall they consume more.
What Obama is saying is that by raising costs through taxes and fees and regulatory costs, companies and then consumers will be trained to consume less of those products he deems harmful, and companies will then invest in the technologies that will get them around the regulations.
It can work, but with a number of caveats.
1) it's a regressive tax.
2) it'll only work as long as those costs are held artificially high, which may not be long enough for the new technologies to fully mature.
If those new technologies are developed under a regime of false prices, their development could (likely would) be fundamentally harmed in ways that will cripple them when reality does return to the energy market.
This is actually a form of moral hazard. And, as we've seen, reality always comes back into markets at some point, one way or another, at which point we'll be left with a damaged economy and fragile technology that can't stand the rigors of a real marketplace.
So it's his way of giving alternative energies a shot? or is he going to punish corporations that ship jobs overseas? Europe has a huge tax on gasoline and much of our price at the pump is made up of gov't and state taxes.
Scary isn't it.
Don't we all know someone who is more impressed with their own intellect and abilities than anyone else is???
To bad we're about to get a President like that.
He's looking and sounding less socialist and more Totalitarian by the hour.
Tax cuts don't matter if you don't have a job. And with Reid, Pelosi and 30 million newly amnestied voters, this might not be something we can back.
Bye Bye Miss American Pie....
Drove my Hundai to the levy but the levy was...
dynamited by Bush/Cheney/neocons per screwy louie farraKLAN/Jerry Wright/Jim Cone.
Hey please enlighten me - what the f is a price signal and what/why is it used?
A price signal is just a term applied to the idea that people respond to prices. When prices rise they consume less and when prices fall they consume more.
What Obama is saying is that by raising costs through taxes and fees and regulatory costs, companies and then consumers will be trained to consume less of those products he deems harmful, and companies will then invest in the technologies that will get them around the regulations.
It can work, but with a number of caveats.
1) it's a regressive tax.
2) it'll only work as long as those costs are held artificially high, which may not be long enough for the new technologies to fully mature.
If those new technologies are developed under a regime of false prices, their development could (likely would) be fundamentally harmed in ways that will cripple them when reality does return to the energy market.
This is actually a form of moral hazard. And, as we've seen, reality always comes back into markets at some point, one way or another, at which point we'll be left with a damaged economy and fragile technology that can't stand the rigors of a real marketplace.
So it's his way of giving alternative energies a shot? or is he going to punish corporations that ship jobs overseas? Europe has a huge tax on gasoline and much of our price at the pump is made up of gov't and state taxes.
guess so.