Thursday, September 01, 2005
Be Thankful for High Prices
PRICES PREVENT SHORTAGES. Gas prices have been increasing at a faster rate than most people have ever seen. We are about to hit a new national record. The highest price of gas that the nation has ever seen (adjusted for inflation) is an average of $2.91 per gallon in 1979. I paid $2.89 this morning. Even though the high prices are a common topic of complaint from water coolers to radio DJ's (who are making this country dumber by the minute) these prices are preventing something much worse. High prices are preventing gas shortages. A shortage is a very specific occurance where supply is unable to meet demand. This is regulated by prices. High prices lower demand and create incentives to increase supply. Unfortunately many people (including the mind numbing morning DJs) are under the impression that we are experiencing a gas shortage. What we are experiencing is a decreased supply; NOT a shortage. We WILL experience a shortage if prices are not allowed to continue to rise. We saw this in 1979 when Carter put a price ceiling on gas prices. We also saw this last year when economically ignorant Florida laws put a price ceiling on gas prices during and after our four hurricanes. So be grateful that prices are increasing; your alternative is an empty gas tank.
# posted by The Professor @ 4:11 AM 
Comments:
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High gas prices are currently causing a shortage in my gas tank, and that's all that matters to me to be honest.
And is it true that they're actually producing about 1.5 million barrels in excess every day?
And is it true that they're actually producing about 1.5 million barrels in excess every day?
# posted by 
: 7:28 PM
: 7:28 PM
oh yeah and the people freaking out about possible shortages are the ones causing 7-11 to put bags over their pumps after they fill up 20 containers full of gas, pissing me off >:[
# posted by : 7:33 PM
: 7:33 PM
I'm not sure who you are referring when you say "they" are producing excess oil everyday. The problem right now is not the amount of oil, the sharp increases that we have seen are caused by a decreased ability to refine the oil into gas. Keep in mind that there are many uses for oil other than gas (only about 40% of each barrel is used for gas and diesel).
Sorry, by "they" I mean OPEC, and by 1.5 million I mean 1 million.
Wall Street traders are using the hurricane -- not the supply -- as an excuse to jack the prices despite OPEC itself saying that there is plenty of oil and that they are concerned about the high prices (and actually plan on doing something about it). This is high-scale price gouging, and is complete bullshit.
Wall Street traders are using the hurricane -- not the supply -- as an excuse to jack the prices despite OPEC itself saying that there is plenty of oil and that they are concerned about the high prices (and actually plan on doing something about it). This is high-scale price gouging, and is complete bullshit.
# posted by : 12:27 PM
: 12:27 PM
I travel at least 60 miles per day for my work commute, so I am just as unhappy as everyone else about the gas prices. Here are a few things to think about regarding the above post:
1. Wall Street traders don't like high gas prices. Companies get large and profitable by offering products at LOW prices, not HIGH prices (look at Standard Oil, Wal-Mart, Microsoft, Ford).
2. If high gas prices lead to soaring profits then why did all of these gas and oil companies wait until 2005 to raise their prices?
3. If high gas prices lead to soaring profits then why did the gas and oil companies STOP raising prices when they hit $3 per gallon (that is the average high price here in Florida)?
4. How would you define "price gouging"? I have yet to hear a viable definition for price gouging, so I will continue my search.
Looking forward to your comments.
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1. Wall Street traders don't like high gas prices. Companies get large and profitable by offering products at LOW prices, not HIGH prices (look at Standard Oil, Wal-Mart, Microsoft, Ford).
2. If high gas prices lead to soaring profits then why did all of these gas and oil companies wait until 2005 to raise their prices?
3. If high gas prices lead to soaring profits then why did the gas and oil companies STOP raising prices when they hit $3 per gallon (that is the average high price here in Florida)?
4. How would you define "price gouging"? I have yet to hear a viable definition for price gouging, so I will continue my search.
Looking forward to your comments.
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