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gasoline avoidance day

April 21, 2007

Obviously, the price of gas is pretty high everywhere. Some economist (which I can’t source because I forgot where it was) said that the price of gas will only start to faze the nation when it gets above $3/gallon. This is true to some extent. I think people are planning a bit more because its $30 every time you pass through the station. However, people for the most part are not slowing down their usage.

An article on Smart Growth Online says, “Americans cut gas consumption by six percent per capita nationwide between November 1975 and November 1980 [during the first gas crisis], but only by one percent between March 2001 and March 2006 — in both periods regular gas prices ultimately rising by about 66 percent, from $1.50 to $2.50 in 2000 dollars.”

Smart Growth Online also mentioned that the American lifestyle, combined with suburban sprawl and the change in employment habits, has changed in the last thirty years to include more daily transportation for recreational activity like going to the mall or taking kids to sports practices.

Regardless of the increase in fuel prices, Americans are going about business as normal. In a time of war, this was historically referred to as “normalcy.” However, given the current environmental and economic status of the country, such stasis of habit is not necessarily wise. This same economic atmosphere is what has brought in “price gouging.”

The Great Wiki tells us that “price gouging is a frequently pejorative reference to a seller’s asking a price that is much higher than what is seen as ‘fair’ under the circumstances. In precise, legal usage, it is the name of a felony that applies in some of the United States only during civil emergencies. In less precise usage, it can refer either to prices obtained by practices inconsistent with a competitive free market, or to windfall profits. In colloquial usage, it means simply that the speaker thinks the price is too high. Non-pejorative uses are generally in reaction to what the writer believes is an unjustified restraint on the market.”

There is much defense for and attack on price gouging. However, since the habits of Americans have changed so little, its hard to argue that people can’t afford the gas. They are simply doing it anyway. In fact, the price gouger is serving an important service in the way of economic safe-checks.

Jerry Taylor & Peter VanDoren write on the CATO Institute’s website: “Gougers are sending an important signal to market actors that something is scarce and that profits are available to those who produce or sell that something. Gouging thus sets off an economic chain reaction that ultimately remedies the shortages that led to the gouging in the first place. Without such signals, we’d never know how to efficiently invest our resources. Moreover, we’d have no idea what to conserve. It’s no exaggeration to state that, without such price signals, our economy would look like Cuba’s.”

So, one must think about how important a high oil price is. Back in the 70s, there was a shortage, but we seem to be having no shortage here. That is supposedly because of price gouging. But then, none of us are changing our driving habits. So shouldn’t we be running out of oil?

With that, I leave you with this:

From MySpace: “On May 15th all myspace members are to not go to the gas station in protest high gas prices. Gas is now over $3.00 a gallon in most places. There are 72,110,073 members currently on the network, and the average car takes about 20 to 30 dollars to fill up. If all myspace members did not go to the pump on the 15th it would take $2,163,302,190.00 out of the oil companys pockets for just one day, so please do not go to the gas station on May 15th and lets try to put a dent in the oil industry for at least one day.”

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2 comments

  1. I should ride my bike more. I’m a very lazy pagan, D. Very lazy.


  2. My husband is an economist and his take on it is this:
    There is no shortage. And skipping the pumps on one day, even en mass, will not affect the price gouging ~ these big oil companies and the local gas stations are big enough that you’re only going to hurt the littlest of guys, which is not what you’re after.
    Instead, fill up your tank on day one. Then, on day 3, only purchase the small amount that you need. Likewise on every other day. The affect will be that the gas stations tanks are never quite as low as they were before with folks filling up every time. So the oil companies don’t offload as much gas into the local stations’ tanks as before, so they have to hold onto more and are not (theoretically) as ready to purchase raw barrels at the exhorbitant (in every sense of the word) prices per barrel that the Saudi’s are asking. So the price goes down because the supply has seemingly gone up, outstripping the demand.
    In short, it’s not the local pumps you want to sock it to. It’s the refiinerys. My dad would disown me if he heard me (he worked for a refinery when I was growing up.)
    Anyway, got here to say thanks for stopping by my site for the feast. Enjoyed yours as well. I love bread, it just happens to love my hips way more than I like!



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