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Economics of prices {price-gouging oil companies}
JewishWorldReview.com ^ | May 31, 2006 | Walter Williams

Posted on 06/05/2006 8:43:21 AM PDT by thackney

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To: mysterio

"But avoiding fuel purchase is impossible. Even if I ride the bus, I've bought fuel. If I buy anything that has been transported, I have purchased fuel. If I heat my house or turn on a light bulb, I have purchased fuel. So while there are viable alternatives to the strawmen examples the free marketeers push, there are no viable alternatives to our oil addiction."

How additionally wrong you are.

1. Buy more things made and produced locally - road side produce stand instead of the super market, local store instead of the catalogue or the Internet, "local" entertainment instead of a four hour car trip or a weekend plane trip - and you will reduce your fuel consumption and/or fuel costs. You have choices.

2. Reduce the number of trips you take. Do more "drive buy" shopping by picking up things as you go to and from work instead of making everything a separate shopping trip. Eliminate those very wasteful last-minute, gotta-have-it one-item-purchase trips. Nothing is that important.Walk to the neighborhood mini-mart around the corner for your 11:Pm Hagen Das fix.

3. But "riding a bus" is more fuel efficient than taking a car, when you measure the fuel in passenger-miles achieved by the same gallon of fuel.

4. Turn lights off when not at home. Buy "pilot-less" gas water-heaters and kitchen ranges - they don't waste gas when they are not being used. Spend a little more and install water-heaters that produce all the hot water you want, on demand, without running 24/7 to keep a tank of water hot. Cost more to buy, saves tons of cost and fuel in the long run.

So, every way noted above CAN reduce the EXTENT of YOUR oil addiction.

However, don't lose sight of this fact. As you reduce your "fuel consumption" because the price is high, you will in time bring down that price, and therefore you will continue to use that "fuel" when your conservation efforts help keep the price of that fuel reasonable.

And, conversely, if you allow your useage to remain as it is and the current "fuel" prices do not decline, you will help to insure that someone will bring out more alternatives to the "fuel" you are consuming, because the high prices will make the profitability of those alternatives more likely.

Either way, we have and we do make the choices that result in what is available to us.


21 posted on 06/05/2006 9:49:05 AM PDT by Wuli
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To: mysterio
But as long as I am purchasing anything, I am purchasing fuel.

Yes, like food and shelter, there are some things that must be purchased to survive in today's modern world. Are you really wanting to live in a world that does not have energy use?

22 posted on 06/05/2006 9:58:50 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney
"...maybe adding on a bit for inflation since 1960."

He "maybe" better add on a lot more than a bit. Like maybe a factor of 6.3 according to the inflation calculator I consulted. Like maybe more because I suspeect the inflation calculator did not take into account the real estate bubble we now have. Williams is great but he's behind on the inflation issue. And that is a shame because despite his claim to be a radical for liberty, inflation is very damaging to liberty as it represents the confiscation of property. I think his advocacy of liberty is rather selective.

23 posted on 06/05/2006 10:00:21 AM PDT by Jason_b
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To: mysterio
But avoiding fuel purchase is impossible.

Many people could, if they wanted to badly enough, ride a bike to work.

I did it myself for six months and lost 40 pounds.

Until I had a high-speed encounter with a dumpster.

24 posted on 06/05/2006 10:05:40 AM PDT by Restorer
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To: thackney
Using less fuel is similar to buying a cheaper house. You can also buy a more fuel-economical car or relocate to a place with mass transit. Even if you choose to own a car, you can combine trips, car pool etc.

Unless gasoline prices are based on market forces, people will not have incentives to adapt to the reality that gasoline is a dearer commodity.

I can understand the average American's difficulties with rising fuel costs but no one has a right to cheap gas or a high quality of life. In the end, market forces will encourage innovation and promote as high a quality of life in the US as circumstances permit. Non market forces always fail after a while.

25 posted on 06/05/2006 10:06:59 AM PDT by Saberwielder
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To: Wuli

You can reduce the extent of fuel purchase, but you cannot avoid buying fuel. I can avoid buying coffee. Therefore, the coffee argument is a strawman. How wrong I'm not.


26 posted on 06/05/2006 10:13:18 AM PDT by mysterio
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To: thackney

it's price gouging for me to jack up the price of my house which cost me much less when I bought it, just because there is an increased demand for housing by immigrants.

It's price gouging for me to jack up the cost of my labor to a rate much higher than when I started working, just because there is a shortage of people in my IT skill set.


27 posted on 06/05/2006 10:14:39 AM PDT by spintreebob
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To: thackney

No, I'm wanting to live in a world where there is a viable alternative or two. Right now, we don't really have a choice. I would like to see some competition and some domestic fuels that we don't have to buy from terrorists.


28 posted on 06/05/2006 10:15:49 AM PDT by mysterio
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To: mysterio

Actually you can.

You can walk, lite candles, get a wood stove, get an "ice-box", grow a "victory-over-fuel" garden in your back yard, and a zillion other things.

You CAN.

Whether or not you WANT to, is your choice and not a "strawman", to essential economics.


29 posted on 06/05/2006 10:21:23 AM PDT by Wuli
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To: mysterio
Even if you effectively "must" purchase fuel and have a static demand that doesn't change, you respond to changes in the price of fuel by adjusting your purchases of other things.

You can reduce your consumption of coffee and bottled water in response to price increases for coffee and bottled water, but you can also reduce your consumption of these things in response to price increases for gasoline.

30 posted on 06/05/2006 10:29:33 AM PDT by Alberta's Child (Can money pay for all the days I lived awake but half asleep?)
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To: mysterio
No, I'm wanting to live in a world where there is a viable alternative or two. Right now, we don't really have a choice. I would like to see some competition and some domestic fuels that we don't have to buy from terrorists.

And there are choice available that affect how much you spend for fuel. There is plenty of competition. Our Legislature needs to make some choices that bring more America's resources available for us to use.

31 posted on 06/05/2006 10:36:33 AM PDT by thackney (life is fragile, handle with prayer)
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To: mysterio; Wuli
...but you cannot avoid buying fuel...

This place is filled with helpless wimps.  The only thing you can't avoid is death. 

I got dozens of neighbors who don't buy fuel.  It's amazing how we don't hear a back woods dirt farmer whining about how helpless he is even though it's a lot easier for a fuel-buyer to lower his lifestyle and stop, than it is for the farmer to improve his lot.

32 posted on 06/05/2006 10:41:37 AM PDT by expat_panama
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To: thackney

If people spent a few bucks to buy some stock in an oil company, they wouldn't moan about the company's "record profits" when they're a shareholder.


33 posted on 06/05/2006 11:09:14 AM PDT by Rte66
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To: mysterio

Way back in my freshman macroeconimics class my instructor mentioned the availability/scarcity of alternatives in commodity pricing. You're right, the fact that there really is no alternative to gasoline for transportation fuel means that the only thing the consumer can due is change behavior (& b*tch).


34 posted on 06/05/2006 11:27:43 AM PDT by Tallguy (When it's a bet between reality and delusion, bet on reality -- Mark Steyn)
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To: Wuli

You would still have to buy gasoline if you did those things. You would just buy less of it. Every American is forced to buy gasoline.


35 posted on 06/05/2006 11:57:37 AM PDT by mysterio
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To: expat_panama

Do your neighbors who don't buy fuel buy any goods which were transported? If so, they buy fuel.


36 posted on 06/05/2006 11:59:28 AM PDT by mysterio
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To: mysterio
Do your neighbors who don't buy fuel buy any goods which were transported? If so, they buy fuel.

Holy smokes, what an amazingly helpless attitude!

They don't buy goods that are transported, they grow their own food, make their own clothes out of what they can scrounge and when they travel they ride horses.   They cook on wood that they've gathered.   

Bear in mind that this is not some kind of goofy 'back-to-nature' shtick, this is how hey live.  Those that can will grow some cane, mill it, and sell it to get cash so they can buy fuel.   Fuel is bought by anyone that is able to, but those that can't don't just roll over and whine like whimpering helpless ninnies.   It's them that has money that's got the choice, and it's those that don't have a choice that doesn't buy fuel.

Americans don't have to buy fuel if they don't want to. They do because they can.

37 posted on 06/05/2006 12:51:40 PM PDT by expat_panama
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To: mysterio

using your logic we're forced to buy all kinds of stuff. The trucking industry is fueled more by coffee than it is by gas (shipping trucks mostly burn deisel, but truckers pound coffee like normal people breath), and everybody knows that to make a better cup of coffee you need better water, which means bottled water, so with your "trickle down purchase" concept we're "forced" to buy coffee and bottled water.


38 posted on 06/05/2006 12:54:55 PM PDT by discostu (get on your feet and do the funky Alphonzo)
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To: Cobra64
It would take a typical dumb, uninformed, uneducated liberal mindset not to understand this simple business concept.

OOPS, FreeRepublic is loaded with people who don't get it.

39 posted on 06/05/2006 12:58:33 PM PDT by Protagoras ("A real decision is measured by the fact that you have taken a new action"... Tony Robbins)
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To: Cobra64

Some are on this thread.


40 posted on 06/05/2006 1:03:41 PM PDT by Protagoras ("A real decision is measured by the fact that you have taken a new action"... Tony Robbins)
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