Change ... no change.

Change 'we' can believe in? ... No change we can believe in? ... Change we cannot believe ... ? It gets complicated.

To go from point A to point B both points have to be first defined. Do the government want to cut demand as low as possible? Is that the 'Point B'? Or, does the government want to 'stimulate' something or other. The points are incompatible. Taxation is deflationary and high enough taxes would reduce economic activity to zero. Welcome to the Soviet Union.

What is missing @ the NY Times and the government is DC is a 'grand strategy'. Economics is an art; creating an economic policy is similar to Titian painting a picture. A Titian is required and then he has to decide what subject to paint, then decide how to paint that picture - to get from A to B. That 'How' is missing, along with the Titian and the subject. Wow! We've got a lot of problems ...

Okay, I'll pretend I'm Titian; the goal is to reduce demand and subject demand to government control, for an entire set of reasons I won't go into here. I know that raising taxes will have a strong effect on consumption and 'kill the recovery', but any recovery in consumption would be short lived under any circumstances and a waste- based consumer economy is not desireable, anyway. Using this calculus as a short- term strategy, I would raise taxes on gasoline until the cries of pain from the 'pundit nation' were deafening, then I would know that I had raised them about half- way to what they should be. Euro or Turkish retail levels would be good. Twice that would be better.

I would then inform the public that the alternative to high prices (not using the tax word) would be to ban driving altogether except for delivery, police and emergency vehicles. The important part of any strategy is to present clearly the fact that the alternative to any policy can and likely will be much worse. Without any interference at all, the market forces will prevent deliveries of fuel; in many areas there will be an effective ban on all driving, including deliveries, police and emergency vehicles. All the above need fuel.

One thing is sure about this crisis; the markets are wicked. Whatever course of market events can cause the greatest damage to the greatest number, that course of events is most likely. The current drop in fuel prices is part of that course. An economic analogy would be the current round of deflation, leading market participants to sell assets for cash, hoping to use the cash to buy cheap assets later. Our wicked market will accelerate deflation; the flight to cash will also accelerate so that investors have few assets but a lot of cash ... then the liquidity trap will break and hyperinflation will eradicate all cash value.

You can call this 'The Grand Strategy of Circumstance'. This is what we are subject to, now.