Goodbye, $3 gasoline: I Loveded You!
I've been holding off, but today finally had to shell out $4.059 cents per gallon for a tank of gas — the first time I've had to pay over four bucks a gallon (not including those odd times when you are stranded in a mountain between here and there and have to pay the inflated cost at some isolated outpost).
And I know that $3/gallon gas ain't coming back. Once the price hits a certain break-point, and people keep buying, there's no incentive to reduce the price.
Beyond some sudden influx of new energy, and since (very strangely, in my opinion) the federal and state gubmints — save Alaska — seem to be resistant to the whole energy-independence idea, there will be no such influx.
I've never seen such an upside-down country before, at least that I've lived in. For some weird, Twilight-Zony reason, we've decided — at the governmental level, again — that Natural Resources are ... not... to be used... as ... Resources?
Like I said: weird.
I don't blame Saudi Arabia, or Mexico, or Venezuela for our energy / food shortage and the soon-to-come inflation surge. I blame us.
And — there doesn't seem to be any consistent relaxing of the upward pressure on oil prices, and since energy drives everything else, from food to clothing to utilities, all I can say is:
Hold onto your hats; we're in for a bumpy ride.
Assuming sanity doesn't get ahold of our politicians anytime soon.
And — with 3 senators in the mix to be our next president, I don't see how sanity is going to prevail anytime soon.
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NOTE: No, Rowan; it is NOT a consolation that over in Europe y'all are paying something like $50 a gallon for fuel. I'm just sayin'. ;o/
Well...I did think about going down that road, so to speak. But then I braked, within seconds of being second-guessed. ;o)
I am not really affected by scary fuel costs, cos I am a Tay Estuary pedestrian. I don't get very far afield, in general, but can pretend that this is actually a choice, and keeps my carbon footprint in the 'bound and tiny' category. (It kind of makes up for leaving lights burning all night. Cos I am a feardie.)
I am sorry for your fuel costs. I guess that soon there will be solar chargers for cars in the US, and wind turbines lurching perilously on the roofs of those in Scotland.
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The phenomenon, if I read you correctly, is called the "ratcheting-effect", where, once prices of inputs go up, they tend to remain up.
The best example of this type of ratcheting-effect is labour as an input. Most notably, union labour, which chooses to enforce high wages over full-employment. And, when faced with layoffs, it is the least senior employee who is let go first. This creates a condition akin to that of the Prisoners' Dilemma.
The more senior you are, the more likely you are to cut loose the junior members, for your own sake.
Unlike labour, the elasticity of price for gasoline is quite different. Price, being the determinant of Supply and Demand, reacts quickly to changes in inputs. And the market is so large, the the product produced by one company is in most cases entirely substitutable for the same product made by any other company, that companies must quickly adjust their prices to maximize their profit. Being slow to reduce price can be more costly than the attempt to artificially retain higher prices.
So, the market works. Now, if we can only get Congress to stop enforcing it's Vision of Change! and let industries do best what they do best.
Nice post! Thanks.
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Your post enhances mine rather nicely. I presume you are living in *eastern* Oregon, with a political attitude like that? ;o/
I like the Market; my presumption is that no one is going to step up to the plate and turn us into the #1 producer of oil and coal, as we should be and could be without sacrificing the environment. So -- until oil becomes less relevant to us, in maybe 5 years -- prices of *everything* are going to be squeezed up.
Today is June 6. Have you read about what the airlines are resorting to just to survive? I guess we can all kiss that whole jet transportation thing goodbye for awhile -- unless you are Gore, or Bono, or Pelosi, or Gates... one of the Important Folk.
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I actually have to turn my face away from the total as I can't bear to look. Sigh. To think I used to gasp at the $50 a tank mark.
As an aside, did you know that you come up first on Google if you search "wrymouth"? Neato...
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thanks to the Lass from Alaska, I still rank pretty high if you google "eskimo sunglasses" too!
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