Senators seek to rein in gas prices [Major ignorance of Economics 101]

The News Tribune ^ | September 7th, 2005 | LES BLUMENTHAL

[grundle]

This article is full of ignorance of economics, from both the politicians and the reporter.

Nixon's price controls caused shortages and gasoline lines. After Reagen got rid the price controls, the shortages disappeared.

If price controls save you $10 on a tank of gas, but you have to wait in line for 2 hours, and your time is worth $20 an hour, then the price controls have caused you a net loss of $30.

Prices are based on supply and demand. Just because it still costs the same to make the gasoline doesn't mean the price shouldn't change.

The article says that Nixon's price controls were designed to deal with shortages. That's wrong. It was the price controls that caused the shortages.

The references to "price gouging" show a complete ignorance of economics.

The reporter should have interviewed an economist.

California's not building any new major power plants for over a decade, plus their price controls on the consumer price of electricity, plus their ban on long term contracts for the wholesale purchase of electricity, were the real causes of their electricity crises.

[grundle]

I should have spelled that "Reagan."

[backhoe]

Sticker Shock-$3 a gallon gas? Click the picture:

[ZULU]

"Prices are based on supply and demand. "

Not in this case. Prices are driven by speculation and profiteers who raise gasoline prices as soon as any possibility of a supply disruption is on the horizon, no matter how remote, and then take forever to lower them again, but never to the level they were at formerly.

Unlike corn, oats, or most other commodities, EVERY other economic factor is somehow tied to the price of gasoline and fuel - and if these piggish exploiters aren't called to acount and stopped, the ramifications of the increased costs will have a ripple effect on all other commodities and generate a world-wide recession - just as they did in the mid 1970s.

What the solution to price gouging by these international oil cartels is, I don't know, but something must be done about these thugs.

[agere_contra]

The cure for high prices is ... high prices. It's completely counterproductive to control prices in this sort of situation: its no good having the government proudly boasting that "yes we know there's no gas, but thanks to us at least it's cheap"

and if these piggish exploiters

Ad hominem attacks on tradesmen aren't going to make shortages go away either.

[G.Mason]

Head economist teaching theory to Congress.

[gulfcoast6]

If the government would drop some of the federal gas tax a BIG difference would be seen but, we know the politicians will not do anything with their toy, money from the gas tax, money to just throw away.

[bvw]

Bottle that whine. But no one buys it -- it's just dregs and bitters.

[shibumi]

Someone should simply ask these Senators, most of whom are lawyers, if their legal fees were based on the cost of their rent, or the price of their furniture. If 33% is usury on a loan, then why not on the cost of legal services?

[jammer]

“No one now has clear oversight to protect consumers,”

Wrong. The consumer has it. That sentence is the sand upon which the entire argument is built.

[backhoe]

If the government would drop some of the federal gas tax a BIG difference would be seen but, we know the politicians will not do anything with their toy, money from the gas tax, money to just throw away.

Absolutely.

We should be drilling for oil & gas, onshore, offshore, and in Alaska, like there were no tomorrow.

We should rescind Jimmy Carter's muddle-headed EO forbidding the recycling of nuclear waste-- Europe's done it safely for decades.

We should be building next-generation nuclear plants ( and not just for electricity- any plant that needs heat, steam, or power coud use them ) all over the country. We have a nuclear plant two cities to the west, and it's far safer than the local chemical plants in terms of injury and deaths.

We ought to pursue clean coal technology-- we have a 300-500 year supply of the stuff right under out feet.

There's a lot, we could be doing right now.

[shuckmaster]

If the government is going to regulate what kind of vehicles and what quality of fuel citizens must use to transport on the governments highways then it's the government's responsibility to see that people can get the fuel a reasonable price without being gouged by an unscrupulous segment of the private sector every time the wind blows. There's laws against collusion to fix prices and using inevitable hurricane warnings as a code signal to simultaneously gouge is collusion.

[Joe Boucher]

NOt suprising, Ask all 100 senators te recite the a.b.c.s and I bet half couldn't do it.
Lots of very ignorant folks in that body.

[from occupied ga]

Sen. Maria Cantwell is drafting legislation to give President Bush broad powers to investigate whether oil companies are gouging consumers, and to impose price controls if necessary.

And who's investigating government for gouging people with their massive taxes? The level of hyporcisy over the so-called gas price gouging has reached unprecedented heights.

Last night I listened to the local news first on a misleading story of an increase in the local stales tax for Cobb county from 5% to 6% First the reporterette girl called it a 1% increase. WRONG. Going from 5% to 6% is a 20% increase. Then they called it a penny tax. 10 seconds later they then stated how many hundreds of millions of dollars it would extort from the serfs for the ever needy county. If it's a penny tax then it only raises a penny. But there was nothing but praise for the tax and a sympathetic interview with some fat trailer trash c..t who worked to pass the increase.

Then there was the bedwetting interview with some (black) single mother (with three chillin) as to how she was going to have to do all sorts of cut backs if gas prices continued to rise.

So I guess limitless increasing of taxes for which you get nothing is good, but increasing the price of a commodity is bad.

[frankjr]

" “No one now has clear oversight to protect consumers,”

Yes, the oversight is provided by the market. If you don't like the price, don't buy the gas. Walk, bike. take public transportation or buy a vehicle with better mileage.

If someone can produce a barrel of oil for under $70, go for it.

I pay more for a gallon of milk than I do for a gallon of gas. And I thought cows were renewable.

[mewzilla]

“Most likely Congress will do little or nothing but talk a great deal and hold hearings,” said Sen. Byron Dorgan (D-N.D.) said.

It excels at that....

[mewzilla]

Note to Congress: Better high prices than gas lines...

[Caipirabob]

It makes sense, though. I mean, if you're going to get rid of a tax, get rid of a disproporational tax.

Even illegals have to pay gas tax.

[Jimmy Valentine]

In addition of course, not a single congress member has advocated suspension of gas taxes, or the single blending of fuel rather than the multiple blends the Enviros foisted on the country.

Losers

[RockyMtnMan]

Here's one, built new refineries further inland and build a pipeline from the gulf. Hell put a refinery anywhere in west Texas and you won't here a peep from the enviro wackos.