Gas Prices

[Cptn Corizon 0]

And economics is a psuedo-science based entirely on broad and vague assumptions of human nature, but has it's purpose. I was simplifying the basic reason why cutting the gas tax won't save you money in the long term. And for that matter I am not entirely sure the standard supply and demand curve can even apply to gas prices since we all know that the supply of oil is an artificially created item. (Thank you OPEC.)

 

That said, Fred's correct on the $3.50 a gallon price (from what I've read on the subject.) Actually a really interesting case-study for this topic is the 1980's when Coffee-junta decided to raise rates and everyone went "screw this, it's not worth it" and started drinking coffee.

 

Honestly, the only way gas prices stop being an issue? We find alternative fuel methods. Another (and let the "Supply-side Economists" complain--I know the argument) is for the government to create a cap on gas prices. I know what issues there are with the government setting artificial prices, but some of that is largely BS. [but then I am not exactly what you call a strict capitalist]

 

Sidebar: Problem with private cooperations doing things? They don't act in interest of the people (example: safety); they act in their own interest--which can often run counter to the interests of the people (read: exporting jobs). That's why for years and years we had government controlled monopolies, till the kleptocracy took over about 20 years ago.

[will_marx 0]

Perhaps we should all invest in a horse and ride to work. ;-)

 

I like that idea. Of course we'll need to bring back the village blacksmith for street shoes.

[Sendai Riko 0]

You could always try carriage-pooling with the Amish.

Edited May 22, 2007 by Sendai Riko

[will_marx 0]

You could always try carriage-pooling with the Amish.

 

:lol: True. You never hear them complain about gas prices. Only feed prices.

[Dumbass 0]

And economics is a psuedo-science based entirely on broad and vague assumptions of human nature, but has it's purpose. I was simplifying the basic reason why cutting the gas tax won't save you money in the long term. And for that matter I am not entirely sure the standard supply and demand curve can even apply to gas prices since we all know that the supply of oil is an artificially created item. (Thank you OPEC.)

Supply and demand curves intersect to form an equilibrium at the market-clearing price. A monopoly puts a barrier on this equilibrium point being achieved, but that does not mean the market forces tending toward equilibrium simply go away. They just have something blocking them - a price control, rationing, etc.

 

OPEC is not a true monopoly however. It is a cartel, which can be thought of as a "temporary monopoly" that is inherently unstable. Monopolys and cartels limit their production and drive the price up above the market-clearing rate. However, one of the cartel participants will eventually find it in it's interests to expand it's production, charge slightly lower than the others in the cartel, break from the cartel, and make a lot of money. Others follow suite and the cartel dissolves.

 

The only thing a price ceiling on gas will do is create a shortage while increasing demand. Maybe it won't be a physical shortage (The oil already exists, it just needs to be extracted and refined.) but with less profits available for oil producers there will be less producers willing to enter (or remain in) the market. You may be able to get gas at $2.00 / gallon but you might have to drive an hour to find an open gas station.

[Guest TroNoQ]

$3.15 out western-way.

[will_marx 0]

Surely the Department of Defense has already done as much damage as they possibly could to Alaska with all their military bases, why not oil production?

 

Sorry to rain on your parade, my dear Frenchman. The Department of Defense has strict environmental protocols. Aircraft are stripped with an environmentally friendly paint remover, ground vehicles have catch basins when they refuel and oil pads for other fluids that are being added or removed, and every installation acts as a wildlife refuge, since hunting is not allowed on military reservations, especially when you consider most Army and Marine installations have massive amounts of acreage within their boundaries and Navy and Coast Guard bases have strict right of ways.

[STSF NDak 0]

The only thing a price ceiling on gas will do is create a shortage while increasing demand. Maybe it won't be a physical shortage (The oil already exists, it just needs to be extracted and refined.) but with less profits available for oil producers there will be less producers willing to enter (or remain in) the market. You may be able to get gas at $2.00 / gallon but you might have to drive an hour to find an open gas station.

 

 

Ahh Supply Side Economics. (I am pretty well versed in economic theory, I just don't happen to agree with it. :lol: )

 

See I don't have a problem with nationalizing our oil industries, so demand shouldn't ever be a problem :P

[Dumbass 0]

Ahh Supply Side Economics. (I am pretty well versed in economic theory, I just don't happen to agree with it. :lol: )

 

Actually, neither do I. Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively managed using incentives for people to produce (supply) goods and services, such as adjusting income tax and capital gains tax rates. This can be compared with the classic Keynesian economics or demand side economics, which argues that growth can be most effectively managed by controlling total demand for goods and services, typically by adjusting the level of government spending. Supply-side economics is often conflated with trickle-down economics.

 

But either way it is government taking an action to prevent this equilibrium point from being reached. The only difference is one of degree.

 

What I have described with my most recent post is neither Supply-side or Demand-side which are macroeconomics policy initiatives. In other words they presuppose that government should take action and the only decision after that is what the best way to achieve that action is. What I presented is a microeconomic analysis. The reason macroeconomic policies rarely achieve their desired ends is they fail to consider that not all industries will be affected the same way on a micro level.

[FredM 0]

I like that idea. Of course we'll need to bring back the village blacksmith for street shoes.

 

Hey there,

 

I suddenly have an image of rush hour accidents due to horse droppings. "I-95 is clogged for miles. Initial reports indicate one horse slipped into the center lane. DNA testing on the cause of the accident are due back next week." :lol:

[Dox Maturin 0]

Hey there,

 

I suddenly have an image of rush hour accidents due to horse droppings. "I-95 is clogged for miles. Initial reports indicate one horse slipped into the center lane. DNA testing on the cause of the accident are due back next week." :lol:

 

:P perfect!

 

I think mass transit is the answer. Let Americans go back to being 1 car households while still allowing couples to work. We need a huge light rail system in all the major cities, that allow you to bring bicycles aboard, and go out to major suburbs.

[will_marx 0]

:lol: perfect!

 

I think mass transit is the answer. Let Americans go back to being 1 car households while still allowing couples to work. We need a huge light rail system in all the major cities, that allow you to bring bicycles aboard, and go out to major suburbs.

 

Never gonna happen.

 

1) The suburbs and cities need to be redesigned to meet those requirements. Plus everyone'll want to drive to the station.

 

2) "Environmental Impact Studies". A town near me (Tenafly, NJ) demanded that New Jersey Transit go back and look at the environmental impact of diesel powered passenger cars running along the tracks before they would allow light rail service to run along the preexisting tracks. Never mind that Conrail used to run at least one freight train loaded with chlorine gas to a Penetone Chemicals plant (That used to be located in Tenafly). Or the fact that the line is still used by light freight trains.

 

3) Even if the rail infrastructure is already in place (albeit neglected/abandoned) it will cost more to meet safety standards than it is worth. Crossings require not just lights, but gates and lights, stations have to be built, and if the line's been neglected for years by the owning railroad (i.e. Conrail, NS, CSX, etc.) it will need to be rehab'd to meet minimum safety standards.

 

The US was a country that embraced all things "new". Rail improved communication across the country, the car eliminated the horse and buggy, and the airplane and interstate highway system killed the railroad.

[STSF NDak 0]

That's why you kill the interstate system by investing in mass transit :lol:

 

 

Sidebar: Actually, I was using the supply-side economics bit to refer to the argument about price caps. If you actually wanted to control prices, though, you wouldn't want to control them by setting the pump-price. You'd want to set the price at which light-sweet crude could be sold. The problem with saying less people will enter the market is that it doesn't take into account the fact that oil producing companies need the petro dollars as much as we need the oil. They can no more easily stop selling it than we can stop buying it, especially countries like Venezuela, Ecuador and Russia.

 

And if oil companies bulk, you can always just take away their billions in subsidies. (Yes that's right, the wealthiest corporations on the planet are subsidized by our government.)

[WxMurray 0]

I think it was about $3.05 when I last checked...south-central Pennsylvania.

 

Given I can remember when gas cost 99 cents...

As can I. Geeze, that must have been nearly ten years ago now.

 

The gas tax here is something like (according to my latest research) 6.5 cpg

Wow, it's like $0.32 per gallon in the Keystone State. :lol:

 

Hey there,

 

Given the waste of the Federal government in the way of transportation services, I'm almost positive they could find a way to survive. After all, when a private company can build a highway in six months for less but the same project take one year for the government, one has to ask...

And Governor Rendell is actually looking to lease out the Pennsylvania Turnpike. I don't know that they'd be responsible for construction, but it'd be an interesting scenario nevertheless.

 

I am not going to get into the whole tax funding argument on this thread, but cutting taxes is generally a bad idea

I share that opinion.

 

I will be in the market for a new car in the coming months. I am definitely looking for a fuel efficient car, possibly (though not definitely) a hybrid.

Edited May 24, 2007 by WxMurray

[Dumbass 0]

Just for the record I was trying to have an intellectual discussion on a very important issue - and then Fred has to go and talk about horse poop.

 

What you are ignoring, NDak, is if you reduce the profit oil companies can make - whether through pump taxes or tarrifs or price ceilings - you are creating an incentive for these companies to go into whatever line of business their next best alternative is.

[STSF NDak 0]

That's assuming they have another business to go into, which for the most part they don't. They also still would make /billions/ of dollars even if price cap or profit capped them to something like 50 dollars a barrel.

 

Here's an interesting piece of information. Last year at this time, LSC was 7 dollars higher per barrel, yet gas prices are on average some 50 cpg higher. Want to fix gas prices, stop price gouging. How, have the government regulate prices the same way they regulate other energy prices.

[FredM 0]

That's why you kill the interstate system by investing in mass transit :lol:

 

Hey there,

 

You seem to forget that the Federal-Aide Highway Act of 1957, that ended up creating the interstate highway system, did not have "public use" as a key point. The interstate highway system exists primarily for the use of the United States military at a time of war and to (originally anyway) allow the evacuation of major cities in the event of a nuclear attack. :P

[STSF NDak 0]

Which of course isn't it's practical use anymore. However, we'll likely never abandon our interstate system because we're so firmly attached to it.

[Dumbass 0]

That's why you kill the interstate system by investing in mass transit :lol:

 

All the money we have poured into mass transit over the years hasn't even put a dent in our use of highways, interstates, whatever you want to call them.

 

People do not vote for mass transit systems because they want to use them. People vote for mass transit systems because they want their neighbors to use them. If you have a car you are going to use it, especially if you are traveling with things you don't want to carry on a bus. That simple.

[Cptn Corizon 0]

Who said Bus? Cut the funding we dump into the interstate system and put it in mass transit, investing in light rail and bullet trains and see how quickly the interstate system dries up.

[Dumbass 0]

Who said Bus? Cut the funding we dump into the interstate system and put it in mass transit, investing in light rail and bullet trains and see how quickly the interstate system dries up.

San Jose, California has spent more per person/mile on our light rail than any other major North American city, and our highways are among the most congested in the country. Only LA has more congested highways than we do.

[Col. C.E. Harper 0]

I try to keep out of these kinds of forum topics, I really do. They inevitably aggravate me, and I get enough of that in real life. But I really do have to drop in $0.02 on that last --

 

The measure of a transit system's quality is not in the money spent on it, but in its practical usefulness to a community. The most expensive, cleanest, fastest, most comfortable train in the world will never be used if it goes only three places and none of its stations are convenient to the people who might use them. Los Angeles (and surroundings) suffers from this problem -- what little public transit there is doesn't go places people want to go, and doesn't go places where people live. The bus system is also notorious for being late -- the classic example, which I've had experience with myself, is a line that stops at a station every half-hour being over 45 minutes late - and no, it's not one bus doing a loop - this is one bus over 45 minutes late followed by a second bus running at LEAST 15 minutes late.

 

By contrast, New York and London (and Paris and Toyko, from what I understand - I've never been to either) have transit systems that are well-designed to be useful to the population most likely to use mass transit, and run reasonably close to on-schedule. And they are used, frequently and heavily.

[Coach Pratt 0]

I bought a motorcycle. 60 MPG !!!!!!!

[Captain Huff 0]

I can run backwards in high heels. Maybe that won't help. Oh well. ;)

[Grom 0]

All of this presumes that gas prices really are an issue (and the community gasps). Americans are good at complaining, but when you look at the percentage the average American spends on gas per month, it really isn't very significant. Case in point, Americans will go out for a dinner for two at an Olive Garden and pay $30, the same price (if you drive what I drive) it costs to fill a tank of gas for a week or two. You see the same griping from consumers for ridiculous costs of coffee, and yet, every morning, Starbucks is jammed packed.

 

Regarding mass transit: Americans seem to be wired differently than Europe, so a European solution isn't necessarily the best. Americans enjoy their independence and if it takes sitting in an extra hour of traffic versus the pains and inconveniences of light rail, they'll do it. I liked what Mike said...Americans hope their neighbors will use mass transit, not them. In Washington D.C., we've got a decent metro system that doesn't suffer from the problems that Harper points out, but that people rarely use. It's lead some to suggest why even build rail when other alternatives are cheaper and more likely to be used by the consumer. And I agree, a project is only cost beneficial if there's an actual demand for it. Alaska's bridge to nowhere anyone?