Thanks for your effort by the way.
I think there is a difference between a market increase in prices such as $3.50 a gallon gas and price gouging. The state law in Florida says a price increase has to be unconscionable. It's rare for a case to be prosecuted, but it does happen.
You hit that nail on the head, when the Government mandates price controls we will all pay the highest price no matter where we shop.
There have been some horribly irrational posts about. Appalling, really, when you think the vast majority of FReepers are smarter than all that.
It is a vital part to our lives. It is as vital as electricity and phone service which are both regulated.
We NEED GASOLINE and will pay almost any price to have it. Without GASOLINE most of America can not go to work. Major companies/airlines would fail.
There are very few companies which drill pump and refine gasoline due to the high costs of this process. Most of the world's oil are in the hands of a very few nations Known as OPEC who does not use the supply/demand economic model but will set production at a certain price target and will reduce supply i.e. output to get this price this in classic economic theory is called price fixing. Price fixing only can work when there is no competition to speak of.
Thus you have a product which has almost unlimited demand. Which people will pay almost all their expandable money to get and at the some time you have OPEC and the oil companies creating bottlenecks and artificial supply reductions to keep the price stable. It is no wonder that when you add an unforeseen event to this calculation the whole system fails.
There is no reason why the US has not built a refinery in 30 years. The oil companies blame the environmentalists but they have NO incentive to build a new refinery this would increase supply and drop the price. The OIL companies should be regulated just like the electric companies. The electric companies make a profit, they repair and upkeep their lines they pay dividends and they have to request price increase which most are approved. This cause the electricity to be stable in price. Exxon made 32% more earnings in the last 3 months year over year. You can not have a company that is vital to you Country's survival under the control of stockholders who only can about the next 3 months profit. This does not promote redundancy pipelines new refinery production, nor as we have seen increase in exploration nor does it create an incentive for new technologies This creates a very low risk environment One final not if gas station must charge more for the product then they bought it for to be able to buy the next batch why do they not sell for less then they bought it for if the next batch is going to be cheaper. the price rises with the market true but it never falls with the market. It falls very slowly if ever. Oil companies will charge higher prices until an economic impact is felt then the will lower prices.
Hey, that's my line. But you're welcome to it.
Right On! Thanks...
[I]Would you rather be able to buy gas at $3.50 a gallon, or not be able to buy gas at $2.50 a gallon?[/I]
Yep. Exactly. Ritz Crackers at $10, or nothing for $1.50.
I'm sure the people of NO would gladly pay up for a little comfort and sustenance, if only it were legal (well, I'm sure they are anyway). And I'd bet you'd see those who have the means to pay up sharing with those who did not (and didn't turn into savages).
Well, no, you might not see it, because it would do too much to discredit socialist docrine, so the media probably wouldn't allow it to be shown.
>>>>Would you rather be able to buy gas at $3.50 a gallon, or not be able to buy gas at $2.50 a gallon?
The biggest problem here is the lack of a physical manifestation. I always used to think gravity sucked when someone planted me in turf during rugby matches. There isn't an overwhelmingly obvious physical analog to point out economic laws with so people try to deny their existence when they lead to unpleasant consequences.
It's always tough arguing emotional issues with people who are getting hosed by the market.
Ditto. Twenty years ago I was making a little over ten thousands dollars a year and paying about a dollar a gallon for gas. I managed to survive and not change my driving habits with the then high gas prices. Now I am making about fifty thousand a year. Gas would have to be five dollars a gallon to equal what I paid for it in the eighties. Recently I have talked to people who complained when gas was about a dollar and one half. This is just in the past few years. These same people were and are making over fifty thousand a year. People have no perspective.
Good find. I've had to explain this to almost everyone I know. It's nice when the little lightbulb over their heads turns on.
I was trying to explain this to someone today. An Oil guy said that their is no way they would lower the price. The supply is NOT their. If they arificially lowered prices people would use MORE gas and then we will RUN OUT. Instead of making 4 trips to do errands, combine thme into one. But that requires planning and disciline.
Zero, Thanks for posting this.
Bunny/Zero, We have a local morning radio show and for the last week or so they have been railing about gas prices. They have made statements that they understand supply and demand and then rail on the huge profits the oil companies are making off the backs of the people in the disaster.
Well, this morning in their first news segment they covered a story about gas stations not raising their prices due to fear of prosecution for "gouging". Then a story or two later they covered a press release that asked that people not come to the Gulf to help with the efforts. This was due to there not being enough GAS to power all the vehicles being brought there.
They couldn't get the connection that the use of the inability to raise prices was causing the use of the scarce resource to occur in an area where it was not needed.
Anti price gouging legislation prolongs suffering!
Time to revive this thread, I think. David Asman was on Fox News this morning telling people to take pictures of gas stations with high prices so they could be reported to the authorities. And Bush was talking about “gougers” this morning.
Sigh...