Re: SPAM-LOW: RE: [ST] FYI Gas prices

[Thomas Emberson <thomas@xxxxxxxxxxxxxxxx>]

Andrew F. Kay, Jr. wrote:

> You simply prove my point, Rod.  Why would ANYONE pump oil or make/sell

Econ 101, cool, but I would suggest you go past the intro course. I am 
sure you would also need a some Post Doctoral work in Psychology to 
understand the demand side.

IMNHSO the oil companies and government have been educating us over the 
last few years to expect higher prices, I can remember the up roar when 
gas prices passed the $1.00 mark, and the first time they bumped up 
against $2.00, this time around, hell, with Scivo, the Pope, Crown King 
of Monico, more stuff in the Gulf, Minute Man project, $2.30/gal is 
barely a foot note.

Basically, my point is, if you think supply and demand is simple, you 
are fooling yourself. I think the term "What the Market will bear" is 
probably a truer statement. Right now it is pretty darn clear the market 
will bear $2.20-$2.50 price range.

So, you might see prices drop to $1.95, and people will be happy to pay 
that, yup, you heard it here first :-)

> Who gets the oil?  The highest bidder.  Simple, but that's why your gas
> costs what it does.  Of course the government, in many countries, is the
> single largest cost factor.  Odd, that the entity with little or no
> contribution to production, sale or distribution makes such a large
> "profit".

Okay, when I start to see the oil companies build roads, I'll bite.

I personally believe that gas tax should go up another $.20 or so, at 
least here in TX, right now we are subsidizing the trucking industry. 
Our cars and bikes virtually do no damage to the roadways, those 80k lbs 
trucks on the other hand do the bulk of the damage. So up the gas tax, 
and drop tolls on roads. Of course, I almost forgot, the gas tax paid by 
the trucking industry is tax deductible ........

> Econ 101? Phooey.

Exactly, lets see some post grad work on the subject. Don't forget Poli. 
Sci. and that PhD. in Psychology. Think Bush/Chainey would had had as 
easy of a time 6 months ago if the price at the pump was $3.00/gallon.

There is so much science, research, black magic behind the prices we pay 
for stuff it is not even funny. Econ 101 never talked of Psychology 
barriers. Price it took cheap and theirs no value, to expensive and you 
may pass irrational barriers.

If you passed a gas station that was selling gas for $.75/gallon, you 
would think something was wrong no? And at $3.00/gal people may just 
scrap the car and take the bus.

In the end, of the only part of Eco 101 that will always be true, is a 
company will maximize its profits. Well most of the time, tax 
ramifications and all .... :-)

cheers,
Tom


- -- 
Thomas Emberson



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