Roughly, a penny drop in the gas price per gallon gives Americans 1.4 billion more dollars a year to spend on other than gasoline. That is a huge stimulant to the economy.

Error (and arrogance) is as much a part of academia as of business. Spectacular failures have come from both, although academics do not have to declare bankruptcy.

The world is flooded with overcapacity in nearly everything except energy. Encouraging more production and expansion in this environment when overspent boomers heading into retirement are not about to go on a spending spree is a mistake.

So, whenever you hear that the top 20 percent receive 45 percent of all income or that the top 5 percent receive 20 percent of all income, remember what that really means. It means that the top 20 percent produced 45 percent of all output and that the top 5 percent produced 20 percent of all output.

In good times, no one wants to end a party and everyone is willing to turn a blind-eye to fraud, corruption, and excessive greed. Bear markets, however, expose the truth.

Any tax comes at a cost, even a corrective one designed to make market participants pay the full social cost of their actions. That’s because the tax reduces the after tax returns to capital and labor, lowering investment and labor supply, and depressing economic activity.