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Economics 101: The Price of Gas
mises.org — Gas prices are up and oil executives are once again testifying before Congress. Clearly, many politicians, pundits, and consumers lament the rising cost of gas. Before we join them in their chorus, let us take a step back and ask this question: Are gas prices really all that high?
nomadicoder- 1470 diggs
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- BECoole, on 04/22/2008, -17/+134We need to investigate the Government's windfall profits on oil. Such naked greed is unacceptable. Never before has Government made so much money on oil.
- Sinai, on 04/22/2008, -4/+25The fact that so many oil companies have merged is a strong indicator that things are not all well for them. Of course, if they all merge, then you end up with one giant monopoly with the ability to dictate it's will on people. Like, oh, I don't know, the government.
- ksmcafee, on 04/22/2008, -1/+7gotta keep in mind the way that these mergers work and the fact that if social welfare were to decrease as a result of the merger, the DOJ/FTC wouldnt let it happen. this would imply that "hopefully" these mergers are helping decrease costs, merge R&D efforts, etc.
maybe its just the economist in me trying to look at it this ideal way, but research seems to back this up pretty well- BECoole, on 04/23/2008, -0/+3There is nothing the DOJ/FTC can do about it when international companies decide to merge.
- ksmcafee, on 04/23/2008, -0/+3truth
- BECoole, on 04/23/2008, -0/+3There is nothing the DOJ/FTC can do about it when international companies decide to merge.
- bosssmiley, on 04/23/2008, -0/+3Yes, and eventually it'll prove to be worth people's while to undercut this putative price-fixing oligopoly in oil, either by getting into the business themselves, or by offering alternative energy sources.
The market works in a more sophisticated way than people think. Price-gouging, as with so much else, contains the seeds of its own downfall.- boot20, on 04/23/2008, -0/+2True, but as it stands now the barriers to entry are enormous.
- ksmcafee, on 04/22/2008, -1/+7gotta keep in mind the way that these mergers work and the fact that if social welfare were to decrease as a result of the merger, the DOJ/FTC wouldnt let it happen. this would imply that "hopefully" these mergers are helping decrease costs, merge R&D efforts, etc.
- popfrogs, on 04/22/2008, -0/+9This is all anyone really needs to know about the situation. http://www.spiegel.de/international/business/0,151 ...
- BECoole, on 04/23/2008, -0/+2Interesting how the Peak Oilers are affecting the market.
- LaughingDjinn, on 04/23/2008, -0/+3That was a great article, makes a lot of sense. I had no idea the speculative forces were that high and that the actual oil demand increase was so low (only 1.9%/year)
- tsotha, on 04/23/2008, -3/+0I love these kinds of articles. It's all because of those greeeeeedy speculators. Look, there's no barrier to you or I investing in NYMEX. If you *really* believe Der Spiegel has it right, you can just open a brokerage account and make a killing in the oil futures market. I mean, a speculative bubble is bound to collapse. Why are you posting on Digg instead of putting your money down? Hell, if I were as sure as you I'd be leveraged up to my eyeballs and just waiting hungrily for the windfall.
- boot20, on 04/24/2008, -0/+3This proves, without a doubt, you've no idea what you are talking about.
- tsotha, on 04/26/2008, -1/+0You really don't understand economics do you? Tell me, was this not covered in Marxism 101?
- tsotha, on 04/26/2008, -1/+0By the way, I guarantee you, beyond a shadow of a doubt, I know more about commodities trading than you do. How old are you? Sixteen? Twenty?
- boot20, on 04/29/2008, -0/+1tsotha, your epeener does no impress me. If you look you can find out how old I am (far older than 16 or 20).
I can also promise you that I know far more about economics than you ever will. It's apparent your knowledge of economics is sadly lacking. You really need to brush up on a number of topics before you continue to prove you've not a clue of how anything works. - tsotha, on 04/29/2008, -1/+0Sigh. Well, it turns out you're so ignorant about economics you don't even know how ignorant you are. There's no point in my wasting any more time on you - people who are deliberately ignorant aren't salvageable.
There was a reason I picked 16. You have an adolescent view of the markets. Grow up a little, no matter what your age is. - boot20, on 05/01/2008, -0/+1I pick you for a troll now....I must say bravo....
- boot20, on 04/24/2008, -0/+3This proves, without a doubt, you've no idea what you are talking about.
- mountvale, on 04/22/2008, -5/+34If environmentalists really wanted to save the earth, they'd let the price of oil sky-rocket.
Increased price = reduced consumption.
That's what led to the purchase of fuel-efficient cars in the early 80's.- whoaohh, on 04/23/2008, -0/+8And a larger niche in the market for alternative, environment saving fuels. This would lead to more people going into fuel research and inevitably lead to a better fuel source.
- victorypup, on 04/23/2008, -3/+1Reduced consumption now = higher prices. Got to feed those CEO's and the stock holders.
- rficwizard, on 04/23/2008, -1/+2Why is this market different than every other market on earth? Reduced consumption (demand) moves the price downward, not upward.
- rficwizard, on 04/23/2008, -1/+3I have a related solution: targeted (potentially higher) taxes on gasoline. Start by removing all of the taxes from gasoline, to clear the slate. Add on a tax to cover all of the cost of road construction and maintenance, at all levels (federal, state, local). Add on a tax to cover the cost of maintaining emergency fuel reserves. Add on a tax to cover the cost of all traffic-related law enforcement. Finally, add on a tax to approximate the environmental damage done by burning the gasoline. This final revenue should go directly into a related program, such as wilderness conservation, alternative energy research, pollution control research, etc. In other words, fix the incentives. Once true cost is reflected in price, demand will move to an efficient point.
- funkywood, on 04/25/2008, -0/+2Yes, yes and yes. Someone who understands the economic solution.
Higher oil prices = More demand for biofuels = Deforestation for plam oil.
UNLESS we value forests more than we value palm oil. Al Gore needs to think bigger before we start valuing carbon savings above rainforest.
The answer is to force companies that contribute to pollution to pay for the preservation of rainforests and other precious resources, not to just tax them and give the money to government to spend on child benefits. This gives then same incentive to cut pollution while also making preserving nature pay better than destroying it and the good won't be undone by China ignoring the ban.
Once the World Land Bank owns the forest, nobody can get the resources without invading OUR land. It's called the tragedy of the commons, look it up.
- funkywood, on 04/25/2008, -0/+2Yes, yes and yes. Someone who understands the economic solution.
- awm4, on 04/22/2008, -1/+15The Federal Gas Tax is roughly 18 cents a gallon, this tax is a flat tax on every gallon sold. However were things start getting interesting is when state and local taxes get added. Most of these taxes are in the form of sales tax which is on a percentage basis. In these cases as the price of gas climbs the local income from the taxes also goes up. A flat tax is one thing but make a larger profit based solely on demand is sketchy at best.
This website breaks up the gas taxes by State. See how bad it is where you live.
http://www.gaspricewatch.com/usgastaxes.asp- emutiny, on 04/22/2008, -1/+6state and local taxes? how about environmental regulations and corporate income taxes. so many other taxes on these enterprises too. All the way back to 1970 the government has taken nearly half of oil companies money.
- GeneralFault, on 04/23/2008, -0/+2But then given it back in the form of "exploration incentives" and research grants. I would like to know how much of the government incentives that are given to the oil companies actually go to the purpose stated (such as exploration or research). Do they use it appropriately or are they paying for general expenses, CEO bonuses, payroll, etc. with our tax money? Whether or not they are using it properly, it would be good information.
- tgolferman, on 04/24/2008, -0/+2Remember the Bush Administration Tax Incentives for Business Purchase of Gas Hogs? Helping U.S. Manufacturers sell gas hogs, increasing gas taxes a result of poor mileage, and making the Saudi's, who hold a large portion or our national debt, happy was that ploy. The good book says, "a borrower nor a lender be" and the fact that the U.S. has to worry about all the national debt held by the Chinese, Saudis, Taiwanese, Singaporeans, etc., and cannot utilize proper fiscal and monetary tools to fight inflation is testament to the wisdom of the good book. Keynes and his defecit spending theory. God save us!
- emutiny, on 04/22/2008, -1/+6state and local taxes? how about environmental regulations and corporate income taxes. so many other taxes on these enterprises too. All the way back to 1970 the government has taken nearly half of oil companies money.
- minorthreat, on 04/22/2008, -3/+12Gas has more than tripled in 10 years. It took gas 50 years to triple from its price in 1950. Given Inflation since 1950 pure BS. Federal Reserve printing off money like its hot cakes? Very Possible.
I'm really not trying to spew RP propaganda, but this is the honest truth.. Noone really gives a ***** about gas prices and inflation. People are just lazy and want something to whine about. If they really cared, they would have voted for the only person who criticized the Fed Reserve. - pitlord, on 04/23/2008, -6/+18Hey DUMBASSES!
o.o
You don't need to investigate anything. I'll tell you who is responsible for the gasoline taxes. Those gasoline taxes were all voted for by YOU!
>.>
And by voting for Senator Clinton or Obama you are voting for more of the same thing.- Independentsam, on 04/23/2008, -1/+5 We the people are indeed responsible for gasoline taxes. That said, please explain how gas and other taxes are not going to increase regardless of who is in the White House and which party controls Congress.
We the people are going to have to pay more taxes in order to get us out of our current financial crisis. The big question is what percentage of income will be paid by the rich, middle class (if there still is one), and the working poor, and what loopholes will be available to avoid paying. - BradHAWK, on 04/23/2008, -2/+3Or if we hadn't invaded Iraq gas would be about $1.5/gallon.
- CryRightardCry, on 04/23/2008, -1/+2Funny how you bitch at the Dems instead of the GOP who pushed us into Iraq which precipitated the drastic rise in gas prices.
January 2003, gas was 1.43.
Thanks President Traitor!
Oh well, at least all his oil buddies got richer even if we all pay more.
- Independentsam, on 04/23/2008, -1/+5 We the people are indeed responsible for gasoline taxes. That said, please explain how gas and other taxes are not going to increase regardless of who is in the White House and which party controls Congress.
- utahcanuck, on 04/23/2008, -0/+4From the Spiegel article above.... "The world consumes 86 million barrels of oil a day, but trading volume is 15 times as high. The difference represents bets on future price developments."
Now that investors have figured out that the housing bubble is collapsing, it makes sense that money is being pushed into necessary commodities like oil. These booms are like psychological events with economic consequences. People see that oil supplies are dwindling, people know that people need oil (it's not like million dollar homes right?), so we get huge influxes of capital into oil futures. The only way this changes is if people decide they don't need oil anymore... - techmaster, on 04/23/2008, -3/+6Okay...let's put this into perspective. The typical household spends maybe $40 a month for water. Let's also say the typical household uses 3 tanks of gas in a week, and I'll even be generous and say they're driving a Japanese economy car, so it's $35 to fill up. Four weeks in a month, so that's 12 tanks of gas in a month for the typical household.
Gas: 12x35=420
Water: 40
Then, the profits, as stated by the article:
Gas: 9.5% x 420 = $39.90 profit per month per household
Water: 10.2% x 40 = $4.08 profit per month per household
But, the article claims the water companies are the evil ones? This article is pure propoganda, and it is trying to subvert attention away from the fact that we are being ripped off. This also has nothing to do with the middle east, it has to do with the fact that the refineries are running at maximum capacity. Less refineries = less operating expenses for the oil companies, so more profit. Limited supply and increased demand = higher prices for us = even higher profit for big oil. It's a win-win situation for them. But no, the water utility providers are the evil ones. This is pure BS. Buried as inaccurate.- unusualbob, on 04/23/2008, -0/+2I was thinking the same thing, this isn't about which company has a higher profit margin, its about the fact that the oil companies do so much business that they don't need high prices. The oil companies have annual profits of around 40 BILLION dollars, which is plenty more than they need if u ask me.
- rficwizard, on 04/23/2008, -1/+3This makes zero sense. I hate to be so blunt, but I must. The fact that oil companies are much larger than water utilities means that the total investment in the oil companies is much larger. Investors are looking for return on each dollar. The RATE of return is what encourages investment, not the ABSOLUTE return. Low investment means low supply, which means higher price. In all economic questions, you must just ask yourself: what would you do? If the industry you were invested in had a low rate of return, what would you do? I would move my money into an industry that had a higher rate of return. Note that I don't care about absolute return, only the rate of return. That is what any rational person would do. That is what investors in the oil companies will do if they can't make a reasonable RATE of return.
- HellifIno, on 04/23/2008, -0/+2I like the part where the oil companies claimed that the price of gas was mostly because of the lack of crude and the refineries already running as fast as they could. There's not enough supply! That's why!
Then a few months later: Happy happy! We have managed to tuck away a special stash of gas just in time for your summer driving demands!
Wait, what?! >.- rficwizard, on 04/23/2008, -2/+1I think they raised the price. You understand that demand reduces, and supply increases, as price increases, right? More can always be produced, it is just not always profitable AT A GIVEN PRICE to produce more. At a higher price, supply will increase.
- rficwizard, on 04/23/2008, -1/+3The ABSOLUTE profit doesn't really matter to an investor. Profit is like interest rate. When I put in a dollar, I expect to get a certain return. When I put in two dollars, I expect to get twice the return. Therefore, what matters is the RATE of profit. The rate of profit for oil companies is below that of water utilities. Therefore, the oil company investors are taking a lower return on each of their dollars than the water utility investors.
- unusualbob, on 04/23/2008, -0/+2I was thinking the same thing, this isn't about which company has a higher profit margin, its about the fact that the oil companies do so much business that they don't need high prices. The oil companies have annual profits of around 40 BILLION dollars, which is plenty more than they need if u ask me.
- Random65, on 04/23/2008, -2/+0Gas tax is NOT based on a percentage. The gov made 20 cents a gallon when it was a dollar, they make 20 cents a gallon when it's 4 dollars.
- Sinai, on 04/22/2008, -4/+25The fact that so many oil companies have merged is a strong indicator that things are not all well for them. Of course, if they all merge, then you end up with one giant monopoly with the ability to dictate it's will on people. Like, oh, I don't know, the government.
- SpaceMonkeyZero, on 04/22/2008, -33/+62McCain wanted to repeal the Federal sales tax on gasoline for the summer...
How's that progressing through Congress? I bet the Dems are blocking it to help Obama.- fudsak, on 04/22/2008, -33/+15Let's see... have cheaper gas prices for one summer or a great president for four years...
I've made my decision.- jakobmakob, on 04/22/2008, -4/+13Why not both?
- victorypup, on 04/23/2008, -2/+1???????
- TomK88, on 04/22/2008, -20/+33Do you people not realize that your services have to paid for by something? There is no free lunch.
- p0s3r, on 04/22/2008, -9/+45Tell that to the "Free Healthcare" crowd.
- TRScheel, on 04/22/2008, -15/+6It would be free for most Americans. Hell, very few people pay for the services we currently have.
- Y0tsuya, on 04/23/2008, -2/+8YOU don't. But WE do. My family's health plan is $1K/mo, with my employer picking up half the cost. Then my tax money goes to pay for Medicaid and Medical.
- TRScheel, on 04/23/2008, -2/+3Thats exactly my point Y0tsuya. I didnt mean to come off as if from the other side of things. I am just pointing out that for the majority of Americans Healthcare will be free because whatever taxes they do pay are given back to them.
- TRScheel, on 04/22/2008, -15/+6It would be free for most Americans. Hell, very few people pay for the services we currently have.
- Ne007, on 04/22/2008, -2/+16How about they spend the money that I already give them....CORRECTLY!
It doesn't take the government to make the world go around! - renzien, on 04/23/2008, -1/+4Actually if you peruse that website some more, you'll find that there are voluntary (economic) ways to handle everything necessary that is generally handled in a forceful (political) way. It took well over a year to convince me; try not to jump to any conclusions.
- Zyphron, on 04/23/2008, -0/+2That is exactly the problem though...there IS free lunch. Lots of free lunches to LOTS of people, many of whom either do not dserve it, or could be helped to make their own lunch with some more effective aide.
There are many countries that have a sales tax, OR an income tax but both gets excessive.
- p0s3r, on 04/22/2008, -9/+45Tell that to the "Free Healthcare" crowd.
- petebot, on 04/22/2008, -12/+41You mean the tax that goes towards rmaintaining roads? During construction season?
- TomK88, on 04/22/2008, -18/+33All taxes are bad! Government shouldn't take any money at all. Stuff like roads, police, military, etc. should just be paid for magically.
- ShempRider, on 04/22/2008, -1/+17My taxes are paid with theoretical dollars.
- diggduggDOOM, on 04/22/2008, -1/+11I like your theory of magic spending. Would you care to run for office in the good ol' US of A?
/we offer magic money kickbacks - evilbob333, on 04/22/2008, -2/+18I got no problem paying taxes for roads, police and military. Its the entitlement spending, social security and Medicaid that I don't want to pay for. Why do people always bring up legitimate government services as examples of things that are going to have to be cut, when the bulk of stuff that money is spent is illegitimate money transfers?
- techmaster, on 04/23/2008, -0/+8If our taxes only went to neccessary things, they'd be closer to 5% than the 20-25% most of us pay. Suddenly, you would be able to afford the cost of living here, on an average income, rather than scraping by in a ***** roach-infested apartment, wishing you could afford the down payment on a basic starter home, which is averaging about $250,000 nowadays... And suddenly, everybody in the country would have to work, and our GDP would actually become a number that's worth something! But god forbid that ever happen...
- kdmack, on 04/23/2008, -4/+0But taxes have not stayed the same. The tax per gallon of gas in 1950 was roughly 1.5% of the price. Today, federal, state, and local taxes account for approximately 20% of gas's posted price. Taking inflation and the increase in taxes into account (assuming no change in supply or demand) the same gallon of gas that cost 30 cents in 1950 should today cost about $3.13.
that says is alll taxes!!!! - tech42er, on 04/23/2008, -2/+6Or they could be paid for by the people who actually use the services!
- brad3378, on 04/23/2008, -0/+6Stuff like roads, schools, police & fire protection are paid at the local level.
It's the multi trillion dollar stuff at the federal level that I have a problem with.- techmaster, on 04/23/2008, -4/+1No, a large part of roads are paid for by federal government. The feds subsidize a lot of money to the local governments, especially for interstate highway maintenance.
- nakani, on 04/23/2008, -0/+5techmaster: um.... that subsidization is PART of the "multi trillion dollar stuff at the federal level" brad3378 has a problem with
- afruff23, on 04/23/2008, -0/+2@tech42er
That's some RADICAL thinking! - SpaceMonkeyZero, on 04/23/2008, -0/+4That would be nice if they actually put the gas tax money towards road repairs. Instead it ends up in the big government slush fund... The amount spent federally and by states on repairing and maintaining roads is NO WHERE NEAR the amount of gas tax money they rake in.
- sloppychris, on 04/22/2008, -1/+6No, the "take backsies" tax to bail out people who made poor financial decisions.
The remaining sales tax, income tax, capital gains tax, corporate tax, excise tax, estate tax, and all the other taxes should cover the cost of roads sufficiently.- KyleGoetz, on 04/22/2008, -2/+3Except that gas taxes go directly to paying for road upkeep. In TX, the tax is not even enough to pay for road upkeep. We're having problems funding road work without raising gas taxes.
- sloppychris, on 04/22/2008, -1/+7I would venture to say it is a problem of priorities. Not too few taxes.
- TomK88, on 04/22/2008, -18/+33All taxes are bad! Government shouldn't take any money at all. Stuff like roads, police, military, etc. should just be paid for magically.
- davidemm, on 04/22/2008, -12/+21So what happens if the tax is removed? People are still paying $3.50+ for gas, the demand won't just disappear and prices fall because the tax is cut. In fact, gas consumption should increase because gas would then be cheaper. The demand goes up, supply is stagnant, prices will rise and all that will happen is that the gas companies will pocket what ever money used to go to taxes!
- ksmcafee, on 04/22/2008, -0/+11inelastic gasoline demand still throws a kink in this theory from a materiality point of view
- cheesejaguar, on 04/22/2008, -4/+2Then prices are driven down by competition between the gasoline companies.
- ksmcafee, on 04/22/2008, -1/+5the cournet model of monopolistic competition pretty accurately models this situation.
its an issue of best response curves and residual demand...the main kink is collusion (which seems to play a pretty big part in this industry)
- ksmcafee, on 04/22/2008, -1/+5the cournet model of monopolistic competition pretty accurately models this situation.
- sloppychris, on 04/22/2008, -2/+6You can't just make up economics as you go along.
- thebaron2, on 04/22/2008, -2/+6Cutting taxes is pretty much the *only* way to guarantee a decrease in price at the pump - they just need to tie it to the retail price so the gas companies can't just take that 20% and tack it on to their regular profits.
Gas may eventually catch back up if "natural" prices continue to rise (like if demand grows incredibly due to the decrease in price), but as long as the government isn't taking their cut, and the gas companies are forced to pass that tax credit onto the consumer, prices will be 20% lower than before.- sodade, on 04/22/2008, -6/+1.
- quomen, on 04/23/2008, -1/+5David, since we're talking about economics 101, when you have a tax, there will ALWAYS be dead weight loss. That's the loss to the market the benefits neither consumer nor supplier. Greater taxes only exacerbate that.
- ksmcafee, on 04/23/2008, -3/+1depends on the use of the tax, there are actually cases of increased social welfare in response to a tax. im gonna agree with your 99.9999% but as us economist say "it depends"
- snockhockster, on 04/22/2008, -15/+8Apparently you are unable to differentiate between sound fiscal policy and campaign pandering. Also, you fail to take into account that repealing the tax will have a negative effect on our budget, the country's infrastructure, and the impact of increased gas consumption (due to lower prices).
Also your asinine partisan rhetoric is not needed and only highlights your foolishness.- Musicmonkey34, on 04/23/2008, -6/+1burried for jargon.
- Champ2020, on 04/23/2008, -2/+5McCain also voted against drilling for oil in Alaska. Last time I checked, that would increase supply which would help drive the price down
- SpaceMonkeyZero, on 04/23/2008, -0/+2Not without new refineries. We need more refineries first.
- SD70MACMAN, on 04/23/2008, -2/+4Where do you think the money comes from to build roads and bridges (a third of which are considered unsafe by the American Society of Civil Engineers)? Remember the I-35W bridge? If you remove the tax, then you have to fund roads some other way. Don't give the mass transit BS either as 90% (depending on region, ex Seattle is different than somewhere else) of the gas tax goes to non-transit related road projects. As roads deteriorate, congestion grows since capacity is decreased. More people are driving cars these days, which require more roads, then congestion grows even further. Damned if you do, damned if you don't. The Dems would be smart in blocking such knee-jerk legislation.
- SpaceMonkeyZero, on 04/23/2008, -0/+3The states spend less money on road repairs than they collect in gas taxes. If they spent the gas tax revenue solely on road repairs, maintenance, and new road construction, then you would have a point.
- pentupentropy, on 04/30/2008, -1/+1NOTHING WILL DRIVE THE PRICE DOWN IN A COUNTRY WHERE YOUR MONEY IS F'ING WORTHLESS
http://www.nospintalk.com/content/view/104/1/
- fudsak, on 04/22/2008, -33/+15Let's see... have cheaper gas prices for one summer or a great president for four years...
- JimSwarthow, on 04/22/2008, -7/+20in the vein of the old adage "a broken clock is right twice a day", NPR of all outlets has broken down the real-deal in regards to gas-prices. behold: http://www.npr.org/templates/story/story.php?story ...
- KJeffV, on 04/22/2008, -3/+16Eeeeek! You mean to say that in order f/me to to lose weight, I must restrict intake and increase output? Isn't there anything easier?
The fed tax on a gal of gas remains 18.4¢—not much of a price decrease but a little relief. Of course, the Dem-controlled Congress must approve removing it; does one really believe the Left is gonna give up so much as a cent in taxes if it doesn't have to? The percentage that oil cos profit is far lower than other US businesses, but fuel-users cont to complain, not availing themselves of the facts: Bitching is so much easier, isn't it? The REAL gouge is the state taxes on fuel, which range fr/slightly less than the fed's to more than 30¢/gal {where does one suppose THAT is?} and are SUPPOSED to be used f/infrastructure but, of course, are not.- snockhockster, on 04/22/2008, -3/+5It doesn't matter who controls congress, it's a bad idea and nothing more than McCain pandering to the ignorance of the masses. Unfortunately, he appears to have an audience.
- yaddayaddayoda, on 04/22/2008, -0/+8Washington state gas tax: 54.4 cents per gallon
Fed: 18.4 cents per gallon
Total, not including county or city taxes: 72.8 cents per gallon
I paid $3.49 when I filled up this AM. This equates to a total rate of taxation of 26.4%.- gandhii, on 04/23/2008, -0/+3So.. based on your numbers.. that would put the non-tax price of gas at $2.76 a gallon. Still awfully high in my book. It would appear more likely that there are other forces involved that are causing the 'painful' rise in gas prices these days. Is it inflation? Over speculation in the markets? I don't know. But it seems illogical to suggest that taxes are to blame. (disclaimer: I'm more of a libertarian ideologically, and I hate taxes, so it is unlikely that my opinion on this is all that bias)
- yaddayaddayoda, on 04/23/2008, -0/+4It's a perfect storm. Inflation (actually the devaluation of the dollar vs. other currencies, oil, and gold), the military demand for fuel, speculation on futures prices, environmental policies coming home to roost (on oil wells and refineries), refinery capacity, increased demand by places like China, ethanol costs and the cost of special blends that are different in every municipality and state, etc.
The other factor that we have not considered is the indirect taxes. The $0.728 per gallon is the consumer paid taxes at the pump. The corporations, the distributors, and the gas stations all pay taxes, which are passed on to the customers and indirectly paid by us. I submit that the actual rate of taxes from end-to-end, coming out of the ground to going into the gas tank, is somewhere between 36% and 50%. I am pulling those numbers out of my ass, BTW.
- yaddayaddayoda, on 04/23/2008, -0/+4It's a perfect storm. Inflation (actually the devaluation of the dollar vs. other currencies, oil, and gold), the military demand for fuel, speculation on futures prices, environmental policies coming home to roost (on oil wells and refineries), refinery capacity, increased demand by places like China, ethanol costs and the cost of special blends that are different in every municipality and state, etc.
- gandhii, on 04/23/2008, -0/+3So.. based on your numbers.. that would put the non-tax price of gas at $2.76 a gallon. Still awfully high in my book. It would appear more likely that there are other forces involved that are causing the 'painful' rise in gas prices these days. Is it inflation? Over speculation in the markets? I don't know. But it seems illogical to suggest that taxes are to blame. (disclaimer: I'm more of a libertarian ideologically, and I hate taxes, so it is unlikely that my opinion on this is all that bias)
- KyleGoetz, on 04/22/2008, -1/+2Dugg for using the cent sign.
- jeff303, on 04/23/2008, -0/+2OT but your calories point is slightly off base (it considers the first law of thermodynamics but ignores the second). http://video.google.com/videoplay?docid=4362041487 ...
- popfrogs, on 04/22/2008, -3/+3NPR got it wrong. http://www.spiegel.de/international/business/0,151 ...
- JimSwarthow, on 04/22/2008, -1/+3right cuz Die Spiegel said so.. sorry, Spiegel carries about as much weight as Xinhua and Pravda.
admittedly Beat Balzli and Frank Hornig have a certain amount of street-cred regarding this subject (and thanks for pointing out the article, btw), but Speigel's a ***** rag right up there w/ TIME magazine. I'll need more than that to change my mind.- popfrogs, on 04/22/2008, -1/+3http://www.carllevin.com/news/2006/05/08/gas-price ...
A little more info there. It jives with what Spiegel has reported on.
- popfrogs, on 04/22/2008, -1/+3http://www.carllevin.com/news/2006/05/08/gas-price ...
- JimSwarthow, on 04/22/2008, -1/+3right cuz Die Spiegel said so.. sorry, Spiegel carries about as much weight as Xinhua and Pravda.
- KJeffV, on 04/22/2008, -3/+16Eeeeek! You mean to say that in order f/me to to lose weight, I must restrict intake and increase output? Isn't there anything easier?
- fedupamerica, on 04/22/2008, -8/+63Obama wants to add a windfall profits tax as well. Then the Government can make even more.
- spamcrusher, on 04/22/2008, -1/+15Which will further drive up gas prices. One way or another, oil companies will continue to bring in 9% profit. If we tax them to try to decrease profits, they'll just increase prices. Then all we've done is increased taxes you and I pay, we've just hidden it better than saying "Hey I'm going to raise your taxes!". Who'll suffer the most? Poor people.
- dericko, on 04/22/2008, -1/+15The government doesn't "make" money.. it spends it all.
- faithfreedom, on 04/23/2008, -2/+10Where are all the Obama's fanboys?
- whoaohh, on 04/23/2008, -2/+10They hide from economic articles.
- brad3378, on 04/23/2008, -2/+5Crying about Hillary's win in Pennsylvania?
- keozen, on 04/23/2008, -3/+7Ok my US friends, perspective time.
Correct any of my figures if they are wrong. Anyhow, i did a quick search for gas prices in the US on the web just now, I came up with a price of $3.22/gallon in NY so I'm using that as a benchmark, I'm going to measure it against what I paid at Asda to fill up here in the UK this morning which is £1.06/Liter.
Now the Math:
£1.06 was for a Liter, now a gallon is 3.785 liters so I multiply that accordingly. To get a gallon of gas here I'd pay £4.00 more or less. Now, let's look at the exchange rate, as of now google says £1 is around $1.99, do the math and:
Gas Prices:
USA: $3.22/Gallon
UK: $7.96/Gallon
Most of the extra price in the UK is tax, straight to the government. Honestly, you don't know how lucky you guys are on your gas prices.- biotch, on 04/23/2008, -0/+5keozen thanks for breaking that down...
But dont forget what we have to do when we need those services that are socialized in your country through those taxes. We pay for it out of pocket. Our economy is set up differently. If the extra money you pay goes to taxes, then it is funding a service we would likely have to pay for ourselves in the US.
Oil here was about 20-30 bucks a barrel through 2001. Now its $120, 7 years later. Thats a 300%-500% increase, vastly outweighing inflation. Any economy would start to suffer if the cost of a highly consumed and inelastic good went up about 400% that quickly. People who drive long distances to work for instance cant always just up and move. Its the drastic negative shift that hurts an economy that is arranged otherwise.- keozen, on 04/25/2008, -0/+2Yes, we have some government funded things that you don't (the NHS [free healthcare] is the main bone of contention here I guess, as it always is in these situations) but I still challenge you to find pretty much anything that is cheaper over here, I have a friend that moved here from TN and she can't believe how much we pay for things. I know it's not as simple as a direct comparison but it's not as bad as it seems either.
- Charlesbian, on 04/23/2008, -0/+8UK friend, perspective time
the UK is a much smaller country with higher population density. Americans on average drive more, not because its necessarily convenient, but in a large amount of the country, a workplace could be 20 miles away, even 60. We lack the rail infrastructure that most of europe has as well. While your gas might be twice as much as ours, our commutes are that, and then some.- keozen, on 04/25/2008, -0/+2I'm single now so I'm having less sex than I used to, does that mean i have to pay more for condoms? I lack the infrastructure to get a hot girl to my bedroom because I don't go out as most jocks and I don't have the big bulging abs that some "fit" guys have. They may get laid twice as much as me but I have to work so much harder to get there.
Stupid almost-comparison aside maybe you've hit some of the problems on the head. Maybe the US government SHOULD be charging more tax on gas and funneling that money into a better public transportation system for you all. Just because one solution is the only solution now doesn't mean it always has to be the only solution. The world as a whole needs to work out ways to cut it's overuse on gas/petrol/whatever you call it locally. Increased use in public transport is one way.
- keozen, on 04/25/2008, -0/+2I'm single now so I'm having less sex than I used to, does that mean i have to pay more for condoms? I lack the infrastructure to get a hot girl to my bedroom because I don't go out as most jocks and I don't have the big bulging abs that some "fit" guys have. They may get laid twice as much as me but I have to work so much harder to get there.
- biotch, on 04/23/2008, -0/+5keozen thanks for breaking that down...
- svivian, on 04/23/2008, -2/+3keozen is spot on, gas prices in the US are at least half of what they are in the UK. I'm just about to fly out the America for a road trip and I'm quite looking forward to cheap petrol...
- biotch, on 04/23/2008, -1/+2I thought Id do that once until I took a train across the whole country and realized just how big this country actually is. You're in for a rude awakening if you think gas prices are just half UK prices out there in no man's land.
- XanderDee, on 04/23/2008, -1/+4If you want to really reduce the price get Ron Paul in office. The prices is caused by inflation if there is no inflation then the price does not change.
Proof...
http://www.youtube.com/watch?v=3SjPvTDiNHI
- prashantpawar, on 04/22/2008, -25/+82The Profit margins of various industries.
Damn Water utility supplies has a better profit margin than major oil and gas firms.
Periodical Publishing 24.9%
Shipping 18.8%
Application Software 22.5%
Tobacco 19%
Water Utilities 10.2%
Major Integrated Oil and Gas 9.5%
Hospitals 1.4%
Drugstores 2.8%
Clearly, greedy corporate profits are not the issue.
"First, we need to take into account inflation. The result of the Federal Reserve printing too much money is a loss of purchasing power of the dollar: something that cost $1.00 in 1950 would cost about $8.78 today. As for gas prices, in 1950 the price of gas was approximately 30 cents per gallon. Adjusted for inflation, a gallon of gas today should cost right at $2.64, assuming taxes are the same."
So adjusting for inflation, and taxes, a gallon of Gas which cost 30 cents in 1950, should cost $3.16 today, and the average price of gas in US today is $3.25.
Gas prices are NOT high.- RomeyRome, on 04/22/2008, -10/+4OMG! But I need it more than I need UPS! They should be regulated!
- PhantomZmoove, on 04/22/2008, -0/+8Hey!
(see avatar) :)
- PhantomZmoove, on 04/22/2008, -0/+8Hey!
- Sinai, on 04/22/2008, -6/+21Regressing 50 years is usually considered a bad thing. The price of wheat is positively tiny compared to in 1079, but that doesn't mean we shouldn't be concerned that it's tripled in the past few years.
- cheesejaguar, on 04/22/2008, -4/+1450 years != 1000 years.
- Sinai, on 04/23/2008, -0/+5With the technology curve being the way it is, it's closer than you might think.
- jeff303, on 04/23/2008, -2/+1That's oversimplifying a bit. The price of oil is influenced by costs to extract (probably have gone down over time) but also by demand. Global demand for oil has gone up orders of magnitude since 1950, especially in the developing world, so it's pretty natural to expect the price of said good to increase accordingly.
- skulljar, on 04/23/2008, -1/+2Hell, in 1079 all I had to do for a bushel of wheat was slash my neighbor to bits with a sword. Then I could warm my feet in his corpse. Now that's cheap food and energy, folks.
- rficwizard, on 04/23/2008, -0/+4If you could afford a sword, which would have been very expensive in 1079. It would be easier to just beat them to death with a convenient bit of firewood.
- cheesejaguar, on 04/22/2008, -4/+1450 years != 1000 years.
- tradwolley, on 04/22/2008, -7/+4Relative to the 1950's or even the '70's its not bad, but I for one missed all of the 50's and most of the 70's, so I don't care. What I do know is that 5 years ago gas was about $1.50, tops, so it has more than doubled in the past 5 years. The cost of crude oil has perhaps tripled in that time. But most of the cost is in processing and distribution, which cost has not changed significantly in the past little while.
- Dush, on 04/22/2008, -1/+8Unfortunately much of that oil price increase is due to speculation rather than true market forces.
It's the system of futures trading causing this rather than current supply and demand.- philhatesyou, on 04/22/2008, -4/+4You've forgotten something: speculation IS a true market force. A free market doesn't assume that people buy only what they plan on using. It assumes people will do whatever they can to make a profit.
- sassip, on 04/23/2008, -1/+4Agreed... If "Free-Market" forces will take care of everything, why did the framers of the Constitution put in a system of checks-and-balances? (that is now being permeated with loop-holes) Perhaps because they knew as the Shadow knew, "What evil lurks in the hearts of men?" If checks-and balances are good enough for our Constitution, why not our economic system?
- prashantpawar, on 04/23/2008, -3/+1You are 100% right my friend. Speculators ARE valid market entities. The buy from a place where a product or commodity is in abundance(present) and they supply it where its not(future).
You can prevent the speculators from speculating but then if the supply is already low, today the price of commodity is average, but tomorrow it will sky rocket (because now the supply is truely gone). - boot20, on 04/23/2008, -1/+4Part of the problem with speculators is that they never have to take ownership of any commodity. It's all done on paper. Since HUGE forces are gaming the market, we're all screwed.
- prashantpawar, on 04/23/2008, -3/+2Try your local community college's economic classes, although they will not explain you the validity of speculators, but then you can understand it yourself after understanding economics:
http://www.mises.org/story/2381 - boot20, on 04/23/2008, -0/+3Ignore the elephant in the room.
- philhatesyou, on 04/22/2008, -4/+4You've forgotten something: speculation IS a true market force. A free market doesn't assume that people buy only what they plan on using. It assumes people will do whatever they can to make a profit.
- sublimemm, on 04/22/2008, -3/+11just so you know... gas hit 117 a barrel, it was 20 when Bush went into office.
hey wait, thats a weird coincidence, the price of crude oil increased by 500% under the watch of a president with lots of friends in the oil industry... thats odd - thebaron2, on 04/22/2008, -2/+4In 2006, "processing" (or refining) was 22% of the cost, and distribution+marketing was 4%.
Crude is the major cost at 55% and the government gets the last 19%.
The government's cut is almost equal to the total cost to refine it, market it, *and* distribute across the entire country.
http://www.npr.org/templates/story/story.php?story ...- strathound, on 04/23/2008, -0/+1The government uses that money to maintain our extensive highway system. It's a usage based tax. Would you rather pay for that using income tax?
- Dush, on 04/22/2008, -1/+8Unfortunately much of that oil price increase is due to speculation rather than true market forces.
- kylere, on 04/22/2008, -7/+10The adjusted for inflation rate is poor logic, and does not hold true. If you assume a 10 fold increase over 50 years, almost nothing hold to that rate. BTW, the average cost of a gallon of gas in the US today is 3.508 ( http://www.eia.doe.gov/oil_gas/petroleum/data_publ ... ) so your numbers are all wrong.
- sublimemm, on 04/22/2008, -1/+9yeah, he also didn't cite one source.
- strathound, on 04/22/2008, -10/+4Recently Exxon-Mobile posted the highest corporate profits in US history. Percentage wise, they may have been at 9.5%. But they still set the mark WHILE receiving government subsidies that we tax payers pay for.
I'm done. I'm done sending my tax money to the Middle East to people who hate us. I'm done watching gas prices go up and never come down. It's time for this country to give us options. And that means valid public transportation. The urban sprawl has to end. We have to learn to exist without oil. And it begins now.- mattlreese, on 04/22/2008, -2/+2So wait tell me again why making money is bad. If the company can not make money then why would it even exist
And really so lets say the government passes a law saying oil companies can only make ha 5% profit. So that means gas prices drop from 3.50 to what 3.30 at best.- sassip, on 04/22/2008, -1/+3"So wait tell me again why making money is bad. If the company can not make money then why would it even exist"
What a simplistic answer. No one is talking about putting Exxon out of business, (like we could-how's that spot in the Center of the Universe working out for ya')
What is being said is that the "free-marketers" tell you that it will "all take care of itself. That's assuming there is a fundamental set of ethics ingrained in those that are in positions of power. Need I say more? BTW, that's one place "trickle down" economics does work. The little guys see the fat cats walk away from million/billion dollar scams unscathed and they say, "Well, why not me?" I'm not blaming personal choices on leaders, but that's one of the reasons they call them LEADERS!- sassip, on 04/22/2008, -1/+2http://www.americaisawesome.com/wp-content/uploads ...
Does Lee Raymond LOOK like he needs more of ANYTHING!!!
- sassip, on 04/22/2008, -1/+2http://www.americaisawesome.com/wp-content/uploads ...
- strathound, on 04/23/2008, -0/+1Nobody said making money is bad. If you read my comment again, you'll see that my complaint is that tax payers are still subsidizing oil. That money should be spent on public transportation, in my opinion.
- sassip, on 04/22/2008, -1/+3"So wait tell me again why making money is bad. If the company can not make money then why would it even exist"
- TheCommentThief, on 04/23/2008, -2/+1Diverting slightly from my usual method of posting, but I had to correct you on a point. Canada, in fact, supplies the US with more oil than the Middle East. 99% of Canada's oil supplies are sent to the USA. That's not to say us Canadian's don't hate you but I thought you should know where most of your oil is coming from, eh?
- TheCommentThief, on 04/23/2008, -2/+2When I say 99% of Canada's oil supplies, I actually mean 99% of Canada's oil exports.
- prashantpawar, on 04/23/2008, -1/+3Yeah Capitalism ensures that you get the cheapest price for your money, especially for a fungible commodity like OIL.
- strathound, on 04/23/2008, -0/+1That's fine in theory. But there's a reason why we have anti-trust laws in this country. Your sacred Capitalism didn't serve us too well when AT&T was fixing prices or when Microsoft was pushing smaller companies out of business. To insinuate that capitalism ensures anything is ridiculous. In fact, the opposite is true. Look at the Enron mess. Companies are under huge stress to demonstrate increased profits by their shareholders. Sometimes they cut corners. And sometimes they break the rules. Don't be naive.
- strathound, on 04/23/2008, -0/+1Good point CT. Hey, I love Canada and the people up there are great. I've spent a lot of time in the Great White North. And it's comforting to know that we buy a majority of our oil from yall too, even though you hate us too. At least you're not going to fly a plane into one of our buildings. Worst case, you send another Canadian band down here and spare us all to death. Heh. Ok, that last part was a joke. Anyways, how bout we switch to importing solar or wind energy from Canada instead, eh? Because, every dime that goes to the Middle East is another dime that will be used against us. F them.
- prashantpawar, on 04/23/2008, -1/+2http://www.dilbert.com/strips/comic/2006-02-19/
- boot20, on 04/23/2008, -0/+1Every digger needs to read this, but at the same time, it's not even .000000005% of the oil story...
- mattlreese, on 04/22/2008, -2/+2So wait tell me again why making money is bad. If the company can not make money then why would it even exist
- deuceswilde, on 04/22/2008, -12/+1The Federal Reserve does NOT print money. This is such a blatant mistake, and regardless what your feelings about the Federal Reserve are getting major things like that wrong speaks to poor research.
- blitzman, on 04/22/2008, -0/+11My paper money has "Federal Reserve Note" prominently printed on it.
- duk0r, on 04/22/2008, -1/+4Then who does?
- jasonmanley, on 04/23/2008, -0/+2The U.S. Mint?
- whoaohh, on 04/23/2008, -0/+4Under whose authority?
- jasonmanley, on 04/23/2008, -0/+2The U.S. Mint?
- ZeroIce, on 04/23/2008, -0/+9Federal Reserve decides how much gets printed. I can say Apple makes the iPod, but you say:
"no they don't, the people at the factories make them"
Get what I'm saying?
- sassip, on 04/22/2008, -5/+12So if it's not corporate profits, What is it?
I don't know how old you are. But I BOUGHT gas for .25/gal. in 1971. Today's prices are 14 times that. ($3.50 in FL.) I get my homeowners ins and see there is a 20-25% increase in price. I recently got a quote on theft ins. for my business, last year $2M liability and $50K theft was $2,200, this year it's $4,500 a 50% increase. When you get a raise, is it anywhere in these ranges or is it a 3-5% increase. However, Exxon Mobile continues to set record profits. I am not a do-as-I-say economist, just a small business owner watching the water rise year-by-year. So, I don't know where your stats come from, mine come from my checkbook/budget...- mattlreese, on 04/22/2008, -4/+4What is your profit margin. Is it less then 9.5%? Even better lets say next year your company makes a record profit, how would you feel if the government just decided to take all that money from you (some could argue they already do). How would you feel.
- sassip, on 04/22/2008, -3/+5First of all Matt, you use a ? at the end of a question, no? Secondly, my profit margin is continually being atrophied by OPERATING costs. Do you know how to balance a budget? Have you ever been responsible for anything over a few thousand-dollars? If so, tell me about it and we can continue...
- mattlreese, on 04/23/2008, -3/+1You missed my point. Would it be ok if the government decided to put you on trial and take your money just because they thought you made more then what was "normal"
- SuperMoses, on 04/23/2008, -3/+5Mattlreese, are you fogetting the the oil industry gets huge subisidies? Congress has every right to question them (although, this is all a show), because they're getting government subsidies. When it comes down to it.. if they are making rocket profits, what gives them to right to get subsidized by the government?
- mattlreese, on 04/23/2008, -3/+1now that argument I would agree with
- jaymzdean, on 04/23/2008, -0/+3This movement to misuse the words "then" and "than" needs to come to a screeching halt.
- sassip, on 04/23/2008, -3/+4Matt, I did not miss your point, it is a purely academic one however. The real world is much different. "All I needed to know I didn't learn in Kindergarden," I learned it when I got out into the "real world." Your ideas may hold up on paper, but that paper will come in handy for only one thing in a practical sense.
SuperMoses is correct, why should I pay them to charge me more? The unbridled "free market" is out of control, it's self-correcting nature is waning as the Monopoly game has fewer and fewer players. Monopoly is the antithesis of "Free Market." Some social necessities such as fuel don't follow free-market rules.
Why are there checks-and-balances in our Constitution and not in our Economic system? What did the Framers know about the true nature of man and greed, whether it be greed for money or power? - Magwich, on 04/23/2008, -4/+1Sassip, fuel absolutely trades in a free market. It is bought and sold in a totally public forum on the futures / commodities market at auction. It doesn't get any more free than that type of market. I feel you pain though, it effects my bottom line as well. In my opinion we, as a nation, should have learned from the massive energy crisis of the late 1970s. Biofuels would have baled out the American farmer and helped wean us off of foreign oil. Maybe then we wouldn't be in this mess. Free markets can be very painful unfortunately. Some might say this market is too free in fact, that is why the price is so high. I would not say that however. Free markets tend to be the most efficient over time even though they undergo painful corrections.
- sassip, on 04/22/2008, -3/+5First of all Matt, you use a ? at the end of a question, no? Secondly, my profit margin is continually being atrophied by OPERATING costs. Do you know how to balance a budget? Have you ever been responsible for anything over a few thousand-dollars? If so, tell me about it and we can continue...
- mattlreese, on 04/22/2008, -4/+4What is your profit margin. Is it less then 9.5%? Even better lets say next year your company makes a record profit, how would you feel if the government just decided to take all that money from you (some could argue they already do). How would you feel.
- ShempRider, on 04/22/2008, -1/+11"Application Software 22.5%"
The Pirate Bay is making a fortune.- sublimemm, on 04/22/2008, -5/+1...I think the Pirate Bay makes their revenue from ads...
what I am saying is that... your comment is abject- ShempRider, on 04/22/2008, -1/+4more like tongue-in-cheek...
- sublimemm, on 04/22/2008, -5/+1...I think the Pirate Bay makes their revenue from ads...
- razorc03, on 04/22/2008, -7/+8Bury this
- KMartSheriff, on 04/22/2008, -3/+2Whoops, pressed the wrong hand.
- rficwizard, on 04/23/2008, -1/+2Some mean people were doing the opposite of what you said. I fixed it by bringing you back to +1. Just as if you were being completely ignored. I'm always glad to do my part.
- sirloin, on 04/22/2008, -5/+7lloking at profit margins of other industries is insane.
one oil is an economic nessity, tis a bit differnt.
also other industries have to have differnt proffit margins just to survive.
retail, which doesnt pay well is generally about 30-35% proffit
where as the service industry like people that cut your yard, fix your sink, etc can have upto 80%-99% proffit. Heck our politicians giving speeches are 99% proffit.
It doesnt prove gas isnt high.
It proves that anyone who thinks this is an arguement, is high.- AmusedToDeath, on 04/23/2008, -1/+6The people that cut your yard DO NOT have an 80-99% profit. Factor in equipment costs, labor, workers comp, overtime pay, taxes, insurance, fuel, advertising, medical, and you're lucky if it's 15-20%. I swear you guys that just go clock in somewhere are CLUELESS about how hard it is to run an honest business in this country.
- boot20, on 04/23/2008, -1/+1Man, this is digg. The posters are slightly smarter than those that post on youtube
- tsotha, on 04/23/2008, -1/+0So why do you keep pulling down the average?
- boot20, on 04/23/2008, -1/+1Man, this is digg. The posters are slightly smarter than those that post on youtube
- AmusedToDeath, on 04/23/2008, -1/+6The people that cut your yard DO NOT have an 80-99% profit. Factor in equipment costs, labor, workers comp, overtime pay, taxes, insurance, fuel, advertising, medical, and you're lucky if it's 15-20%. I swear you guys that just go clock in somewhere are CLUELESS about how hard it is to run an honest business in this country.
- ats314, on 04/22/2008, -2/+7the article is a little misleading. For example, when they say approximately .30 cents, its actually more like .25 cents at best. A lot of sites I have seen put the number more at more like .20 cents. Lets assume .25 cents. By their math, that equates to $2.60. Now just by saying approximately and .30, it looks more like the price isn't that high. The figure is actually more like $2.60 at most in 19.50 compared to $3.50 today.If you use .20 cents, like several sources do, the difference is even more dramatic. $2.10 vs $3.50 today. And with oil hitting a new record high again, that price could very well go over $4.00 soon.
Looks to me like gas prices are in fact pretty high.
http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.as ...
http://www.fiftiesweb.com/pop/prices-1950.htm
http://www.thepeoplehistory.com/1950.html
http://www.mtc.ca.gov/maps_and_data/datamart/stats ...- whoaohh, on 04/23/2008, -3/+2I love you how you say the article is misleading, and then compare the price of gas to $3.50, when the average today is $3.25.
- ats314, on 04/23/2008, -0/+2you and the article are wrong. As per the sources I listed above, the average as of 3:00pm yesterday was $3.50
- bluelightnin90, on 04/23/2008, -0/+4Gas prices could pretty obviously be lower. In the last 10 years gas prices have doubled if not tripled. Inflation can only account for a tiny fraction in the increase in price. If it doubled in the last 10 years (using conservative numbers) that would mean the price of gas is experiencing 20% inflation per year.
- quomen, on 04/23/2008, -0/+5Gas prices aren't high? Tell that to the agricultural, airline, and pretty much every other industry out there. Just because the price we pay at the pump scales SOMEWHAT to inflation, overall fuel/energy prices have skyrocketed. We're facing a global crisis.
- victorypup, on 04/23/2008, -0/+2Gas Prices aren't high? Oil company profits are minimal? Your NUTZ.
- GoneFishing, on 04/23/2008, -1/+1Hey, all I am saying is that travalling to China and London in the past years I have noticed that gas prices outside American are outrageous, or perhaps we just had cheap oil all this time and expect it to be the norm. In reality, when our country starts to lose its status of capital of the world, we are going to see more things go up in prices. Before everyone wanted to trade with us, because we made up majority of the demand. Now they want to trade with China, India, EU, of course the price is going up. Plus the falling dollar isn't helping when this country imports more than it produces.
- RomeyRome, on 04/22/2008, -10/+4OMG! But I need it more than I need UPS! They should be regulated!
- juankovo, on 04/22/2008, -17/+24High fuel prices are the only way we're going to get ourselves to use our energy sources more effectively. If gas was suddenly $10 a gallon, everything would shut down very quickly, and a lot of people would suffer. But we'd come out of it much better in the long run, because individuals and businesses would figure out how to do what needs doing while using less energy. Telecommuting, for example would rise substantially.
- cheesejaguar, on 04/22/2008, -4/+24Gasoline is used by shipping companies to move food. Higher gas prices mean higher cost of food. Higher food cost means that poor people won't be able to feed their family.
- kidtwist, on 04/22/2008, -3/+4Taxes could be remitted partially or entirely for business use.
- vidaeboa, on 04/22/2008, -4/+7yes, but just think how many people would get to say "told you so!"... isn't starvation a small price to pay?
- Sinai, on 04/22/2008, -2/+5If starvation is inevitable, then biology has taught us yes, starving sooner is better than starving later.
- Logicexe, on 04/23/2008, -2/+3It's just a market correction. Capitalism works!
- victorypup, on 04/23/2008, -0/+2We just wait for the boomerang affect. Right?
- RomeyRome, on 04/22/2008, -10/+4It's OK. Obama will feed them with your food.
- p0s3r, on 04/22/2008, -7/+1Oo ba ma means 'He's with us' in Farsi. Coincidence?
- Elamen, on 04/22/2008, -2/+12Then starvation kills off thousand if not millions, reducing demand and strain on food and gas thus price goes down. The system works!
- merper, on 04/22/2008, -2/+5Higher food prices, yes, but too high to feed? Not in the U.S.
http://www.ethanolrfa.org/resource/facts/food/
Much less than a quarter of the cost of most foods go to transportation costs. Even a tripling of the gas price to $10 would raise prices by just 40%. 40% is a lot, but unless you're dirt poor, it isn't stop-eating expensive. You can survive on Ramen for a while if need be.
It's not ideal, and I can't imagine anyone being happy about it, but we probably will end up in something like this situation eventually. It's the only thing that will change the long term patterns of sprawl and car culture that got us so deep into the problem to begin with.
- RomeyRome, on 04/22/2008, -5/+4Not I. I'd drive around & enjoy the empty streets.
- ngmcs8203, on 04/22/2008, -2/+7So is this where I insert the obligatory "I paid $3.98 for a gallon of the cheap ***** yesterday" comment? I think your comment is true, but cheesecat has a good point. This isn't only messing with your and my gas bill. It will effect the economy as a whole. We do rely too much on oil, but until every major industry that relies on trucking, train and other forms of shipping gets on the "cleaner fuel" bandwagon, it's going to hurt us much more than we can handle.
- peestandingup, on 04/22/2008, -3/+4Yeah, it just sucks that it had to come to that. Everyone made bad choices, from the industry & congress, right down to the soccer moms driving tanks. Now we all gotta pay for it during the transition to better alternatives. And pay in multiple ways.
Thats the only way we seem to learn. Same with tragedies. We dont fix stuff that we know is a problem until its a real issue. - mbraynard, on 04/22/2008, -5/+1Well, it would be ok if it graaaadually increased to $10 and the economy had time to transition. Pretty much the ONLY thing that causes shock changes to gas prices are government actions.
The world will never run out of oil; it will just get harder and harder to find and the alternatives will become more and more attractive (hello Nuclear - the unlimited power source) and, as technology and economic efficiency increase, even cheaper than oil ever was.
- cheesejaguar, on 04/22/2008, -4/+24Gasoline is used by shipping companies to move food. Higher gas prices mean higher cost of food. Higher food cost means that poor people won't be able to feed their family.
- ZenaTWQ, on 05/05/2008, -10/+6Thanks for the solo, we need more of these!
- fodbirdy, on 04/22/2008, -23/+13Economics 101: The price of oil will continue to rise due to peak oil
- TGMD, on 04/22/2008, -5/+12Please cite proof that peak oil production has been reached.
- sirloin, on 04/22/2008, -5/+5do you really want proof?
besides for production at gwar the worlds largest oil field dropped last year?
besides for the leader of shell saying demand will outstrip production in less than 7 years?(that is oil geek speak for peak)
beside that hubble was exactly right on the us?
beside that after reworkign teh embargo of the 70's using hubble equatiosn we get a peak at 2008-2012?- daecrist, on 04/22/2008, -0/+8Demand will outstrip production because India and China has a rising middle class who all want to drive cars. It's a symptom of the U.S. no longer being the only country of drivers, not of oil running out. Production is increasing, but sharply increasing demand is outstripping increasing supplies. Basic economics buddy.
- p0s3r, on 04/23/2008, -4/+4I see more questions than answers...
- gandhii, on 04/23/2008, -2/+2Nah.. he asked for proof.. .cause it sounded cool. (listing things in bad grammar with out references don't count)
dumb ass.
- sirloin, on 04/22/2008, -5/+5do you really want proof?
- p0s3r, on 04/22/2008, -6/+13Economics 102: The demand for oil will continue to rise as more 3rd world countries become industrialized.
- popfrogs, on 04/22/2008, -1/+7Economics 103: The NYMEX index added oil a few years ago and hedge fund managers, looking for safe bets during a huge hole in the economy, make ungodly amounts of cash for their investors. See also: gold prices. Oil and gold traditionally track together and rise in value during economic downturns.
- p0s3r, on 04/23/2008, -5/+3Why is George Soros trying to ruin our economy?
- popfrogs, on 04/22/2008, -1/+7Economics 103: The NYMEX index added oil a few years ago and hedge fund managers, looking for safe bets during a huge hole in the economy, make ungodly amounts of cash for their investors. See also: gold prices. Oil and gold traditionally track together and rise in value during economic downturns.
- TGMD, on 04/22/2008, -5/+12Please cite proof that peak oil production has been reached.
- ShempRider, on 04/22/2008, -14/+45That's one of the better submissions I've read in a while.
- brufleth, on 04/23/2008, -1/+3But it is inaccurate. We've had numerous posts explaining that supplies of oil are actually up right now in the US but oil speculation has driven up costs against simple supply and demand.
- ShempRider, on 04/25/2008, -1/+1Are those posts more accurate/valid/truthful than what this guy wrote?
Cite please.
And no, I don't work for oil companies, or any energy company at all.
- ShempRider, on 04/25/2008, -1/+1Are those posts more accurate/valid/truthful than what this guy wrote?
- brufleth, on 04/23/2008, -1/+3But it is inaccurate. We've had numerous posts explaining that supplies of oil are actually up right now in the US but oil speculation has driven up costs against simple supply and demand.
- mrlivingston, on 04/22/2008, -22/+15Free Gas! Pull my finger.
- cphelps, on 04/22/2008, -7/+8Yes, yes they are.
- Quick2822, on 04/22/2008, -9/+61I'll admit, I did enjoy seeing the Ludwig von Mises Institute website on the front page of Digg.
Ron Paul bases his economics on Ludwig.- deuceswilde, on 04/22/2008, -23/+8Which makes me lose respect for Ron Paul. I continued reading, but stopped caring after the article said the Federal Reserve prints money. Such gross ineptitude from an economics "institute" is unacceptable.
- ninepointfive, on 04/22/2008, -1/+8/sarcasm ?
- BadseedJR, on 04/22/2008, -2/+6No, I think he really believes it.
- vincekiessling, on 04/22/2008, -10/+2They do control the printing of money, but to say they print "too much" and that is what caused the inflation over the past 50 years is kind of ridiculous. Inflation is going to happen when the economy grows, and on average over the past 50 years we aren't above the natural rate.
- kuantan97, on 04/23/2008, -1/+10Wrong. Inflation is nothing but the printing of more money. Rising prices are a result of such extra printing. As an economy grows, that is, as it produces more, prices tend to drop. That is why goods often begin as luxuries for the rich; after mass production prices will tend to drop and the masses can more easily afford such goods.
- Quick2822, on 04/23/2008, -2/+6You obviously know very little about inflation.
- victorypup, on 04/23/2008, -2/+2Inflation is nothing more than a control mechanism whereby the controllers take profit from those to stupid to know they've been had.
- rficwizard, on 04/23/2008, -0/+2Inflation is NOT inevitable when an economy is growing. An increase in the money supply is required to prevent deflation when an economy is growing. A money supply that kept pace perfectly with growth would lead to zero inflation. An fiscal strategy that attempted to keep inflation at zero would sometimes overshoot slightly, and sometimes undershoot slightly. The average inflation rate would be zero, even over a long period. Our fiscal policy has a positive average inflation rate, only because that is the goal.
- mbraynard, on 04/22/2008, -0/+13It is accurate; the Fed controls the M2 and M1 supply. As this increases, the dollar is worth relatively less. What is to disagree with?
- whoaohh, on 04/23/2008, -0/+4zomg econ nooobs the fed doesn't print money, the mintz do!
- ninepointfive, on 04/22/2008, -1/+8/sarcasm ?
- BadseedJR, on 04/22/2008, -3/+7There's a name I haven't read in a while... Ron Paul.
- Lewie, on 04/22/2008, -5/+4Who?
- Pixelpaws, on 04/23/2008, -3/+1Shame we couldn't keep it that way.
- thechitowncubs, on 04/22/2008, -2/+13They deserve it, best think tank on the web!
- bc289, on 04/23/2008, -1/+2Austrian economists make up a small minority of economists. While this doesn't disprove their theories, their theories have trouble finding enough support among academics because a lot more data supports keynesian theories.
- deuceswilde, on 04/22/2008, -23/+8Which makes me lose respect for Ron Paul. I continued reading, but stopped caring after the article said the Federal Reserve prints money. Such gross ineptitude from an economics "institute" is unacceptable.
- eclectro, on 04/22/2008, -12/+14Because there is no competition, no alternative, in the market place, we will pay for whatever they ask for a gallon of gas. There has been no *real* energy policy for the last twenty years. The last seven years are unforgivable. They really do have us over a barrel of oil.
- p0s3r, on 04/22/2008, -13/+10Yes there has been a real energy policy since the 70s. 'Do not allow America to utilize it's own resources in order to save the blue-bellied spotted owl!'.
- nblsavage, on 04/22/2008, -11/+10Gee, you're anti-environment, I never would have guessed.
- p0s3r, on 04/22/2008, -12/+9Gee, you wanna keep us dependent on foreign oil. Color me surprised.
- nblsavage, on 04/22/2008, -6/+7there are other ways - but I'm assuming you've never heard of the word compromise.
- p0s3r, on 04/22/2008, -6/+10Pray tell what compromises have the environmental crowd made? No new nuclear power plants. No new oil exploration. No new offshore drilling. No new nothing in decades. How long have people been developing solar and wind power? 3 Decades? It provides what 2-3% of our energy? Lets get off foreign oil first, then get off oil.
- KyleGoetz, on 04/22/2008, -5/+6To be fair, it's kind of hard to advance solar and wind power research without government assistance. This is why many people favor the President pushing us toward an alternative energy policy; the American people clearly are loathe to do it without statist encouragement.
- p0s3r, on 04/23/2008, -6/+5Do you know how to advance solar and wind research without government mandates? Find a way to make solar and wind alternatives profitable. Until that happens provide tax incentives to research alternative methods (which ironically, the Dem's just removed for oil companies) in the mean time. But don't punish traditional means of energy production when there aren't viable alternatives.
- nblsavage, on 04/23/2008, -2/+5only some environmentalists oppose nuclear energy. I certainly do not. In fact the biggest problem in getting new plants built isn't environmentalists, its the suburban NIMBYs
- p0s3r, on 04/22/2008, -12/+9Gee, you wanna keep us dependent on foreign oil. Color me surprised.
- Lewie, on 04/23/2008, -0/+3http://en.wikipedia.org/wiki/Arctic_Refuge_drillin ...
At 5% of our current oil need, ANWAR will last 12 to 32 years. But there will be little price benefit to the consumer.
At 100%, ANWAR oil will last 215 to 525 days.
Our oil reserves are just that, reserves. They are not meant to sustain us. My guess is that the US is holding onto it "just in case" which is pretty smart. I love the environment, but I'm also reasonable. ANWAR is not an option until we're out of oil and need it to prevent the collapse of our economy.
- nblsavage, on 04/22/2008, -11/+10Gee, you're anti-environment, I never would have guessed.
- BadseedJR, on 04/22/2008, -6/+1They do, and all we can do is find different sources of oil rather than reduce the consumption of it. I wrote a letter to Obama and my reps about it. You can read it here:
http://digg.com/political_opinion/An_Open_Letter_t ...
Yes, it is my own blog, but it's a good read! - mattdono, on 04/23/2008, -3/+2Nice how you get the "last 7 years" slap in. Everything is Bush's fault, right?
The article clearly states (at least) one fact that buries your "last 7 years" crap slap.
The last oil refinery was completed in 1976. That's 32 years ago. THIRTY FREAKING TWO YEARS AGO!
I don't buy the man-made global warming bullsh*t, so I say that we responsibly explore for our own oil resources, build kick-ass (modern) refineries, and tell the Saudis (who may not be our enemies, but they sure aren't our friends) to go hump a camel.
That just the other day the Saudis said "there is no reason" to increase oil production for the near and distant future should be enough for Bush, McCain, Clinton, Obama and most Americans to say, "Enough is enough. We'll get it ourselves". The Saudis (and others) are keeping supply unnecessarily tight.
There was some research that I read that was interesting: it stated that if the US government were to merely ANNOUNCE that they were opening one of the many oil deposits (ANWR, Gulf of Mexico, etc) for drilling, the price of oil would drop a minimum of 20%. Why? Because oil suppliers would increase supply, making the profitability of drilling for crude, building and running an refinery go down. The increase in supply would cause a drop in the price, which may lower their overall profits, but it would also present a cost-effective barrier to those potential refinery builders.
So,why doesn't the President/Congress/Someone/Anyone just announce were opening up X oil field starting tomorrow and watch the price go down?
I mean they flap their gums about some much other stuff, why don't they at least throw that "initiative" out there?- ThugThrasher, on 04/23/2008, -1/+3I'll never understand why people keep touting supply/demand as a reason for gas prices when our reserves are larger than they've been in 15 years....supply is THERE in plenty
- Arahail, on 04/23/2008, -3/+2No alternatives? You could buy a much smaller car that is fuel efficient, carpool, ride the bus, ride a bike, or even walk more. Your job is far you say? Move closer to your job if you rent. While public transportation is not that great and takes a long time, it is still an alternative. Just because it takes you an hour to get to work doesn't mean that it is not an alternative. When gas price is too high, you will find alternatives. There is nothing that says you cannot make any sacrifices. Just because other people produce a good that you really want does not mean you are entitled to it. Suppliers lose if they charge too high because demand DOES actually decrease. They charge what most people are willing to pay. If people are still willing to buy SUVs and pay for it, that's the price they deserve. Where do people get this sense of entitlement? The only thing you are entitled to should be the opportunity to succeed with hard work and your intellect. To get the stuff you want, you have to earn it with the hard work and intellect of yours.
- boot20, on 04/23/2008, -0/+4*sigh* while this does help, it's but a very small drop in the bucket. You do realize that fuel only makes up a small percentage of oil consumption, right?
- tsotha, on 04/23/2008, -2/+0There are alternatives for every drop of oil we use. Oil is preferable only because it's cheap. You do realize that, don't you?
- boot20, on 04/23/2008, -0/+2Please do tell me what alternatives have the same economies of scale as oil.
- tsotha, on 04/23/2008, -2/+0Coal is the first one that comes to mind. Nuclear as well. You really don't know much about this, do you?
- boot20, on 04/23/2008, -0/+1You were talking about fuel, then switch to oil, then moved on to power and ignore production...
- tsotha, on 04/23/2008, -1/+1See? This is what I mean. The Germans developed a way to turn coal into diesel fuel more than sixty years ago. It's not as cheap as turning oil into diesel, but when the price of oil goes up it will be. The reason I mentioned nuclear is because if you have power you can turn CO2 into gasoline. So in a very real sense, nuclear, wind, hydro, whatever can be turned in to liquid fuel for our cars.
We use oil because it's cheap - no other reason. We'll continue to use the cheapest method to do whatever it is we use oil for now. If it's still oil, we'll use oil. If not we'll use coal, or nuclear. We have enough coal in the US to run the economy for something like 300 years, depending on your projections for growth. - boot20, on 04/24/2008, -0/+2Dude, seriously, you need to take a debate course. Your arguments are all over. I'm not even sure what your point(s?) are anymore.
Nobody is saying switching to other power sources is a bad idea. What is your point?
As for oil being "cheap," you are wrong on a few counts. But what it really boils down to is that the barriers to entry are enormous and nothing can match the economy of scale of oil.
Cheapest isn't always the winner, but it is usually the case. - tsotha, on 04/24/2008, -1/+0I can't decide if you're being deliberately obtuse or you're just dense. What is it you don't understand? As the price of oil goes up, it will be replaced by other forms of energy. That was my point. What is yours?
- boot20, on 04/24/2008, -0/+2Your other posts do not fit with this theme. You REALLY need to make up your mind.
Answer me this:
A) What substitutes are currently available for oil that are, or could be very soon, on the same economies of scale as oil
B) What does the futures market do to the price of a barrel?
C) When is oil not "cheap?"
- tsotha, on 04/23/2008, -2/+0There are alternatives for every drop of oil we use. Oil is preferable only because it's cheap. You do realize that, don't you?
- boot20, on 04/23/2008, -0/+4*sigh* while this does help, it's but a very small drop in the bucket. You do realize that fuel only makes up a small percentage of oil consumption, right?
- p0s3r, on 04/22/2008, -13/+10Yes there has been a real energy policy since the 70s. 'Do not allow America to utilize it's own resources in order to save the blue-bellied spotted owl!'.
- Sinai, on 04/22/2008, -10/+40Good article, this always pisses me off when people blame the oil companies. The corporate oil companies don't control either supply or demand, they're middlemen. In oil, government is always at the top, sometimes by taxes, and sometimes by government run oil companies. All the corporate oil company giants put together don't match up to a single major national oil company.
- Abomonog, on 04/22/2008, -4/+5"All the corporate oil company giants put together don't match up to a single major national oil company."
Please make some sense!
And all those Corporate oil companies are technically called refiners. They drill and refine oil. They do not willingly buy imported oil. However, they do artificially inflate the prices of the imported stuff they are federally mandated to buy. Exxon, Shell, BP, Mobile; every one drills locally. The oil companies are not entirely to blame buy they have purposely gouged the public pocketbooks.- Sinai, on 04/23/2008, -2/+1The point you have misses is that they they cannot gouge the public's pocketbooks because they do not have the leverage to do so.
- boot20, on 04/23/2008, -1/+2I'm sorry what? I couldn't hear you over the stupid.
- Sinai, on 04/23/2008, -2/+1The point you have misses is that they they cannot gouge the public's pocketbooks because they do not have the leverage to do so.
- Abomonog, on 04/22/2008, -4/+5"All the corporate oil company giants put together don't match up to a single major national oil company."
- colinbg, on 04/22/2008, -15/+6As thought provoking this article is, check the source "applied economics at Texas Tech University" thats right Texas State, where are oil companies based out of... do you think this college gets alumni funding from... oh say Oil companies.
- cheesejaguar, on 04/22/2008, -7/+4The oil companies can't buy out academics in other states? Your logic fails.
- colinbg, on 04/23/2008, -0/+4Of course they can, but after reading the article I think it was less scientific as it was a propaganda piece about making us feel like capitalism is working and that because big oil isn't posting a profit margin as large as other industries we should leave it alone, which if you look at the actual profit numbers, Exxon and others are posting profits larger than almost any other business in the world. My logic is that Texas is based in the heartland of those companies and it seems suspicious that this "piece" would come from there.
- cheesejaguar, on 04/22/2008, -7/+4The oil companies can't buy out academics in other states? Your logic fails.
- Emachine, on 04/22/2008, -13/+8While I agree with the article, but 9.5% is still a *****-ton of money when you consider how much fuel we consume...
- dsmx, on 04/22/2008, -6/+6You do realise that most investors expect at least a 10% return on there investments?
- mattlreese, on 04/22/2008, -2/+6When my 401k makes less then 10% I think its a bad year
- nekama, on 04/23/2008, -0/+6You do realize that stockholders are not God?
- Independentsam, on 04/23/2008, -1/+3They are God if you are employed by their company.
- victorypup, on 04/23/2008, -0/+3Oil Company propaganda.
- dsmx, on 04/22/2008, -6/+6You do realise that most investors expect at least a 10% return on there investments?
- Zlorp, on 04/22/2008, -5/+10yeah we arent overpaying so much as we got used to/spoiled by extremely low gas prices.
- dericko, on 04/22/2008, -4/+6The thing is.. when prices were lower.. the companies selling it to us were obviously still making a profit enough to stay in business.
Now, they're just taking us for a ride.- Mothrog, on 04/22/2008, -3/+2Yeah... That huge change in the price of oil... Why would that change anything?
- philhatesyou, on 04/22/2008, -2/+3You mean the Free Market driven speculation? Yes, we should do something about that. The ACTUAL price of oil hasn't changed. It's the speculative price that has.
- Zlorp, on 04/22/2008, -2/+5actually its the worth of the american dollar thats changed so much, oil prices are climbing because the american dollar is falling. most regular consumer goods have gone up in price lately, just look around you.
- countingthedays, on 04/22/2008, -2/+2Zlorp, You're wrong. The dollar has fallen in value, but not nearly by the amount that you think it is. Thank you and goodnight.
- Zlorp, on 04/22/2008, -1/+6the euro is worth twice as much against the american dollar as it was in 2000. gold is worth 4 times. ***** the american dollar is even worth less than the canadian dollar now
- boot20, on 04/22/2008, -1/+3While the American Dollar decline has helped, the speculation on oil is out of hand.
- philhatesyou, on 04/22/2008, -2/+3You mean the Free Market driven speculation? Yes, we should do something about that. The ACTUAL price of oil hasn't changed. It's the speculative price that has.
- Mothrog, on 04/22/2008, -3/+2Yeah... That huge change in the price of oil... Why would that change anything?
- dericko, on 04/22/2008, -4/+6The thing is.. when prices were lower.. the companies selling it to us were obviously still making a profit enough to stay in business.
- warlokaz2004, on 04/22/2008, -16/+14I've looked at the whole Gas issue -- the oil Companies actually WANT cheap gas -- in an ideal world people would drive their SUV's up to a Gas company owned store, fill up on cheap gas then linger over 64oz drinks and hot dogs. The world oil market is based on speculation and this combined with the dollars implosion, has driven up the price of gas, however, here in america gas is distributed by an oligargy of oil companies -- and they are limited to whatever they can get out of the refineries. We haven't updated refineries in this country in 30+ years due to environmental concerns, so the slowness in the refining process is the true bottleneck.
For folks clamoring for the government to 'do something' I'd propose the Dept. of Energy nationalize all refineries, then run them 24/7, while selling gas at a loss. The point here being not to make money but to 'ease' the domestic price effect of Oil being expensive. Does our government lose money? sure. But at present we are 'losing' 500 Billion dollars a year in Iraq. given a choice between spending 500 billion dollars a year on Iraq (the war that was supposed to pay for itself) and cheap gas...what will the American people select?- p0s3r, on 04/22/2008, -3/+9How very fascist of you.
- philhatesyou, on 04/22/2008, -4/+3You say that like it's a bad thing.
- warlokaz2004, on 06/20/2008, -0/+0And today Dem's in Congress callede for the Nationalization of Oil refineries. I called it. I should be in Congress or something.
- jefferygomer, on 04/22/2008, -2/+3I could poke a lot of holes, but I'll avoid the obvious and say that the oil companies aren't really an oligargy, but you do have OPEC as a cartel.
- philhatesyou, on 04/22/2008, -0/+6Indeed they aren't an oligarchy, oligopoly is the word he was looking for. That they are.
- dericko, on 04/22/2008, -6/+4You mean that oil companies don't appreciate hitting record highs for profit, that they currently are?
"the oil Companies actually WANT cheap gas" - mbraynard, on 04/22/2008, -4/+3I realize that is an assumption that some people have, but to not bother to explain it so that someone else can at least point out the folly of that assumption is, well, lame.
The War in Iraq has nothing to do with the price of oil. Oil was inexpensive before it started. If oil was the objective, the US could have made peace with Saddam in exchange for getting some huge export contract with his regime, given that the US alone could have removed the sanctions on his regime.- ksmcafee, on 04/23/2008, -2/+2to further that - stats actually show that increases in gas prices are the result of demand side causes (stupid consumers) and not supply side causes (opec, war, etc)
- p0s3r, on 04/22/2008, -3/+9How very fascist of you.
- jkahrs595, on 04/22/2008, -8/+24High or not, gas sure is hard to pay for as a college student.
- rockefeller2, on 04/23/2008, -0/+2I had no problems paying for gas as a college student when I was high.
- JamesBrown, on 04/23/2008, -1/+2you could always take the bus
- pdxnick, on 04/23/2008, -0/+1the average college student is poor, but realistically get the best loans out there. I wish i was still a college student, man so much less stuff to worry about.
- stevejobs, on 04/22/2008, -6/+16Hospital 1.4% and Pharmacy 2.8% profit margins? Is that really accurate?
- cheesejaguar, on 04/22/2008, -5/+20As someone with family that works in the Pharmaceutical industry, yes. Think about it, you spend 10-15 years and billions of dollars researching a product and begging the FDA to let you sell it on the market before you even start to sell the drug.
- ksmcafee, on 04/22/2008, -3/+3well put, but the average costs of developing a drug is around $500M
still a ***** load of money though for sure - jefferygomer, on 04/22/2008, -1/+5Also, the majority of hospitals are non-profit to begin with.
- Abomonog, on 04/22/2008, -2/+2Tell that to Pfiser.
- mattlreese, on 04/22/2008, -1/+5Don't forget if some sues you that is another 2 billion to add
- ksmcafee, on 04/23/2008, -1/+1well put
- gandhii, on 04/23/2008, -1/+2And all the money the pharms spend on marketing..
- ksmcafee, on 04/22/2008, -3/+3well put, but the average costs of developing a drug is around $500M
- spamcrusher, on 04/22/2008, -3/+20As somebody who works for a hospital, I can tell you that sounds about right. I work at a for profit hospital, and after it's all said and done our profit margin was about 3% last fiscal year. They give us the full financial statements to encourage penny pinching and saving money when we can (as long as doing so does not effect the quality of care our patients get). Remember, we have to treat anybody who comes in our ER, even if it's not an emergency. Over 50% of our ER patients get treated without paying us a dime. Most come in, get treated, and leave never to be heard from again. Not pointing fingers or laying blame, but illegal immigrants account for a nice percentage of patients we will never collect money from.
- java81, on 04/22/2008, -12/+4More reason for Universal healthcare-- just saying.
- nastronomical, on 04/22/2008, -5/+12Yeah so everyone pays for illegals.
- Mothrog, on 04/22/2008, -3/+12How the hell is that more reason for universal healthcare? The only thing it says to me is that the cost of healthcare would stay about the same should it be nationalized, until of course it becomes nationalized and every hypochondriac decides they need $50,000 worth of tests every month. I'll pass.
- ksmcafee, on 04/23/2008, -1/+4i applaud you sir
- Marc39, on 04/23/2008, -0/+2"Not pointing fingers or laying blame, but illegal immigrants..."
WTF? You ARE pointing fingers AND laying blame.
- java81, on 04/22/2008, -12/+4More reason for Universal healthcare-- just saying.
- ksmcafee, on 04/22/2008, -7/+3it is very accurate in fact.
little known fact is that sometimes government regulation (patent laws in this case) actually work.
im the first to say that this is a rarity, but you must keep in mind the massive amount of fixed costs associated with developing a drug/providing health care.
they have a hard time transferring all of the massive amounts of $$ we give them to their bottom line.- mbraynard, on 04/22/2008, -4/+1Too bad the government opposes some simple proposals I have that would change so much of this:
1) Remove the burden of proving efficacy in the approval process. This is the strictist, most expensive part of the process and results in more orphaned drugs than anything else. It killed so many people for so many years - just because it prevented public notices that you can help a heart attack by taking an aspirin.
2) Make patents permanent (would result in much lower prices for new drugs as pharma would not have to pay itself back in just the few years before generics are on the market and the patent is a marketable asset)
3) Allow reciprocal drug approval. If the UK says it's ok, then there is no need for it to get approval here as well.
4) Outlaw punitive damages for drug use in state and federal courts. If someone fracked up bad enough, it's a criminal matter. Sure, compensation for damages, pain and suffering, etc are fine but punishing a corporation makes no sense.- ksmcafee, on 04/23/2008, -1/+1i agree you with sir, wasnt implying that i didnt
- PompousPilots, on 04/23/2008, -1/+1there certainly are ways to change the pharmaceutical regulations to lower prices, but you're wrong on point 2. The company is going to sell its product at the price that maximizes profit at all times. It can't just sell at whatever price "covers its costs". It is a passive player in determining price.
- mbraynard, on 04/23/2008, -0/+2No, no, no, let me explain. The NPV equation, the demand/supply curve, etc. ALL change when you limit the number of years. In many cases you get stuck with a negative NPV and no cure and more dead children. It's not purely an 'as much you can pay' deal. It's an intercept of two curving lines.
- mbraynard, on 04/22/2008, -4/+1Too bad the government opposes some simple proposals I have that would change so much of this:
- cheesejaguar, on 04/22/2008, -5/+20As someone with family that works in the Pharmaceutical industry, yes. Think about it, you spend 10-15 years and billions of dollars researching a product and begging the FDA to let you sell it on the market before you even start to sell the drug.
- BlueCadenza, on 04/22/2008, -4/+10When people complain about gas and "pain at the pump," they are forgetting pain at the register... Food here for a family of five was about 200$ with savings, now its well over 300 and closer to 400$ at times. The difference of gas at 3.00 and 4.00 is 18$ for an eighteen-gallon tank. For Southern Californians, the difference between what they pay now and years back is the price they pay more than twice a week for their coffee.
- popfrogs, on 04/22/2008, -1/+10Don't know why anyone dugg you down. High energy prices are crippling the US economy. Farming is more expensive, shipping is more expensive, consumer spending is near an all-time low. When the economy depends on consumers to buy ***** constantly, and energy prices are outrageous, it tanks. Consumers are giving up larger and larger portions of their incomes while salaries stay flat and unemployment rises. It's a dire situation and it's all the fault of speculators and a falling dollar value.
- tsotha, on 04/22/2008, -7/+1There's no "crippling" going on. Inflation is going up a bit. Growth is slowing, and it may or may not be negative this quarter. Unemployment is still lower than the Clinton "goldilocks" economy of 1996. So far, this is a very, very mild downturn, not even a recession.
Don't blow things out of proportion.- boot20, on 04/22/2008, -0/+7Someone is drinking the Dittohead Koolaid.
- tsotha, on 04/23/2008, -5/+0Someone needs to calm down and look at facts instead of hysteria.
- boot20, on 04/23/2008, -0/+4So help me out here...What are the "facts?"
- tsotha, on 04/23/2008, -2/+0As I pointed out. We aren't even in a recession yet. We don't even know if growth is negative for one quarter, let alone two. Inflation is up a small amount - 6% year over year was the last figure I saw.
Like I said, so far this is pretty mild. It may get worse, but it may not. People who say we're gonna have a Great Depression are talking out their asses.
- victorypup, on 04/23/2008, -0/+3Somebody is listening to the Dim Wit Fuz Bawl, or drinking koolaid laced with bushugar. LOL. The facts are this train is just now leaving the station.
- tsotha, on 04/23/2008, -2/+0My friend, I don't think the train stops at your station anymore.
- boot20, on 04/22/2008, -0/+7Someone is drinking the Dittohead Koolaid.
- tsotha, on 04/22/2008, -7/+1There's no "crippling" going on. Inflation is going up a bit. Growth is slowing, and it may or may not be negative this quarter. Unemployment is still lower than the Clinton "goldilocks" economy of 1996. So far, this is a very, very mild downturn, not even a recession.
- popfrogs, on 04/22/2008, -1/+10Don't know why anyone dugg you down. High energy prices are crippling the US economy. Farming is more expensive, shipping is more expensive, consumer spending is near an all-time low. When the economy depends on consumers to buy ***** constantly, and energy prices are outrageous, it tanks. Consumers are giving up larger and larger portions of their incomes while salaries stay flat and unemployment rises. It's a dire situation and it's all the fault of speculators and a falling dollar value.
- sambapati87, on 04/22/2008, -3/+3I agree as well, but I think it's important to mention the RATE of the increase in gas prices over the past few years. I still don't think it's the oil companies' or governments' "fault", but it's something to note.
- KyleGoetz, on 04/22/2008, -2/+3I'm actually surprised that the article addressed inflation, but did not address the dropping value of the dollar. These phenomena are distinguishable in that inflation may address the value of the dollar as compared to domestically-produced goods, while the value of teh dollar addresses its purchasing power worldwide.
The value of the dollar has also dropped dramatically over the past year or two. This more than accounts for the extra couple of dimes' difference between gas prices adjusted for inflation in the article and the actual price of gas currently. - JesusHatesYou, on 04/23/2008, -1/+3It's so simple, the anwser is staring you right in the face. Econ 101: Supply and demand. Bush destroys a major oil supplier in Iraq and constantly threatens to eliminate the other - Iran. Just follow oil prices every time Bush threatens Iran. Oil futures prices are like any other commodity futures. But Bush wants to blame the chinks in China for high demand and the environmentalists for ethanol. Either way, the Republican core base hates both - chinks and tree huggers - so their core base rallies behind Bush.
Also, having the US dollar worth half the price of the Euro in just 5 years doesn't help either. That alone doubles the cost of gas. Blame the $10 trillion national debt for the worthless USD.
- KyleGoetz, on 04/22/2008, -2/+3I'm actually surprised that the article addressed inflation, but did not address the dropping value of the dollar. These phenomena are distinguishable in that inflation may address the value of the dollar as compared to domestically-produced goods, while the value of teh dollar addresses its purchasing power worldwide.
