Creeping Back towards $3.00
- Thread starter DFSNOLE
- Start date
A lot of the mass transit complaints don't put things in proper perspective.
We have a massive issue here in the Tampa Bay area with lack of mass transit options. It's one area where the business community and tea party are at complete odds with each other. All forms of transportation are subsidized and yet some folks only want to be against transit, saying it's too expensive.
The I-4/Selmon Expwy connector here in Tampa cost $450 million. That's just for one interchange. Imagine how much mass transit $450 million could build and yet people will complain about $10 million for a streetcar extension. It makes no sense.
We have a massive issue here in the Tampa Bay area with lack of mass transit options. It's one area where the business community and tea party are at complete odds with each other. All forms of transportation are subsidized and yet some folks only want to be against transit, saying it's too expensive.
The I-4/Selmon Expwy connector here in Tampa cost $450 million. That's just for one interchange. Imagine how much mass transit $450 million could build and yet people will complain about $10 million for a streetcar extension. It makes no sense.
Bro, I just reread all of your responses in this thread and while there is plenty of prevaricating I don't see a response to my question of why you pay less than you would be willing to pay for gasoline if there is no competition for your gasoline dollar.
It would take a few seconds for you to copy and paste whatever you consider to be an answer to that question. Your inability/unwillingness to do so is odd, especially considering you took the time to respond again.
BTW, you didn't tell me which of the oil producers listed in that chart of global production you consider to be the 'big three'.
I'm not sure why you insist on not quoting which part you think addressed my question.
If there isn't competition in selling you gasoline, why are you paying less than it is worth to you?
The striving for profit by these companies is a competition in and of itself. The reason you don't have 1 million oil companies is because even if every government regulatory burden was erased tomorrow you couldn't hope to put together a company by yourself to compete with the efficiency these behemoths have evolved. And they are under constant pressure from one another, and from the international and national oil companies that actually have most of the production in the world.
Your gawking at their profits, but it's as if you don't see the fact they earn that money by serving the needs of hundreds of millions of people daily. What would you expect them to make, when you consider how valuable the stuff is? What number pops in your head, and on what basis do you justify it?
I ask these questions because I'm trying to understand how you come to your conclusions.
I realize you're not alone in your opinion, but I have curiosity in how it was formed.
I didn't have to live under real monopolies. But I had the chance to visit them. When my dad was stationed in Germany from '83-'85 we had the opportunity to take a train to East Berlin.
I got to actually see how horrible actual monopolies perform. When there is no competition the problem isn't the price on the label, it's the fact what you want isn't on the shelf.
Do you know what a Trabant is?
I'll be the first to tell you our economy, and thereby our wealth and livelihoods, are suffering from price collusion. But the reality is this collusion takes place at a level that takes this conversation out of bounds for this board.
The real manipulations takes place in the interest rates and the credit markets.
There is nothing to 'dictate' that inflation of the money supply, and distortion of the society's time preference for money, will be reflected evenly in prices throughout the economy. Prices going up evenly is but one result out of practically infinite, so in itself should be considered quite unlikely. So the price distortions will flow wherever the hands that get the new money first send them next. This is why you see the rich getting richer under our policies - they have access to the credit markets moreso than the middle class or those in poverty. That will never change.
Plenty of people in the middle class cheered when the new money flowing into the price of an asset they owned.
Now go back and think about how much less you pay for gasoline than it is worth to you. This happens with practically every good you buy.
But if I inject (print, add to the Fed balance sheet - whichever descriptor you prefer) a trillion dollars into the economy, wouldn't we expect the prices of the things we value the most to be the ones to rise the most as supply and demand adjust prices?
Is it logical to fault the sellers of this good for this outcome? Yes they enjoy the profits, but did they even cause the situation?
And what do those profits do? Are they evil? I don't think so, they're both a signal and a reward. A reward to the creators of the product society wanted, and a signal that there is rewards to be had to anyone else who wants to produce this thing society desires.
Those profits steer and encourage more production. Under the new price after the inflated money supply the only two things that will drive the price down are a reduction in demand and/or an increase in supply.
And those profits don't just steer production of the single good. They encourage alternatives and replacements to meet these desires that society expresses through the money they shower on the profiting producer.
The other cool part about profits is how their lack quickly ends production of the things society doesn't want.
The thing that made the saddest about the bailouts weren't the nonsense about 'saving capitalism', it was this notion that capitalism doesn't function as a system of profit and loss.
The most dangerous idea to our prosperity is that monetary inflation can be used to mask losses, and that society on net benefits from this effort.
seminole97... you keep saying we would pay more for gas but that is not a fact. We might pay more for gas but likely most of us are going to buy less of it. If the price goes down we are likely to buy more of it. It's actually reasonable to say we don't pay any more than we are willing (overall). If gas was worth so much to us that we would pay more then fuel efficient vehicles wouldn't be a thing because we are getting such a bargain at the pump.... Reality is gas was high enough for me to buy an electric vehicle so I clearly felt it was too much.
For example if gas goes to 10 bucks a gallon I might be willing to buy a gallon or two in order to get to work and back. If it is 50 cents a gallon I might take a road trip to Alaska in an RV and buy a ton of it. This fits into Maslow's Heirarchy of needs. What you are suggesting on competition only makes sense on the absolute simplest of terms and if you are blind to the whole depth of the market. Very little of what we pay for gas comes from competition from one station to another. I'd take an educated guess that competition at that level is 10 percent or less of the price per gallon and the differences you see in location and gallons pumped. The only thing that competition does is ensure the gas prices remain just above what their cost is. The real bulk of the cost comes from how much oil costs and that is directly related to how much is being pumped Vs how much demand there is.
For example if gas goes to 10 bucks a gallon I might be willing to buy a gallon or two in order to get to work and back. If it is 50 cents a gallon I might take a road trip to Alaska in an RV and buy a ton of it. This fits into Maslow's Heirarchy of needs. What you are suggesting on competition only makes sense on the absolute simplest of terms and if you are blind to the whole depth of the market. Very little of what we pay for gas comes from competition from one station to another. I'd take an educated guess that competition at that level is 10 percent or less of the price per gallon and the differences you see in location and gallons pumped. The only thing that competition does is ensure the gas prices remain just above what their cost is. The real bulk of the cost comes from how much oil costs and that is directly related to how much is being pumped Vs how much demand there is.
Serious question: Do you--or anyone on here--buy less gas at $3.00 a gallon than you would at $2.50 a gallon?
What about less at $2.50 a gallon than you would at $2.25 a gallon? Does anyone consciously think, "I was going to drive out to Home Goods and look for a new rug if gas had stayed at $2.50, but since it rose to $3.00 this week I'm just gonna sit home and read a book."
Because everyone loves to use this "$10.00 a gallon" scenario that isn't even close to reality. Let's try to deal with real life.
Given that gas prices have been higher and people kept buying it, I'm standing on that observation. It is solid ground. The value of gas to us is higher than what we actually pay.
Agreed, and I'm not saying there is no such thing as marginal utility. I'm just pointing out we would pay more willingly, and there is a reason that we don't pay that higher price that we would willingly pay - competition.
In the case of my car, I buy the same amount of gas for it on the same interval, because I'm going the same places with that DD every week. Price is going to have to climb significantly to cause me to make changes because I wouldn't save any money buying a car to replace this one to save a few dollars a month on gas. And that's not taking into account any other aspects of the car's value to me over MPG.
That doesn't logically follow. Just because you would pay more for something doesn't mean you wouldn't rather pay even less than you already do.
This furthers my point. Gasoline sellers aren't just competing with each other, they're also competing with alternatives (EVs, mass transit, people telecommuting or living closer to work - the factors are almost endless across the swathe of humanity's dollars that they're competing for).
You don't need a conspiracy to beat the alternatives on the market if you can beat them on price. Bang for buck on gasoline is stellar, that's why the government slapped subsidies on your EV to help move them out of dealerships.
You err if you think that competition between producers isn't what drives down those costs.
Competition is a broader concept than just changing the price on the sign. Guiding the evolution of applying capital (human and physical) to accomplishing the things society wants are what prices help us do, and this happens precisely because it is a competitive environment.
The notion that competition doesn't exist, and isn't in fact the fount of the cornucopia we're enjoying, is highly ignorant, and why I couldn't just let cmanole's ill considered venting go unanswered.
Didn't stop me from driving to work each day, but I did economize my other trips. I wouldn't make a trip just to Home Goods. I'd make sure to combine it with other stops I needed, or wanted, to make. Maybe swing through there on the way home from work instead of making a separate trip just for that.
If you look at the miles driven/population, increasing prices definitely affected behavior.
The invisible hand of prices is real, and importantly it lets each person work out their own most suitable solutions for their situations.
At what point did it make you economize trips? I don't even know what gas is right now, as the price typically doesn't really phase me. $2.65 maybe? Is this the point at which you have economized? $3.00? $3.50?
Those aren't my thresholds per se but yes I do For example if it's a Saturday and I'm tooling around the house and 'need' something from Lowes I'll put if off till Monday when I drive by there on my way home from work unless it's absolutely necessary.
Strictly because of the price of gas? Or also factoring in that it's a more convenient use of TIME to just get it on your way to/from work?
Also, I think one's thresholds matter in the sense that it was an essential part of my question. Of course we would all change habits if gas was at the unrealistic "$10.00 a gallon" that's always thrown around. But the truth is for a while now it's generally fluctuated somewhere between $3.50 and $2.50. So that's why I was wondering if people's habits are impacted by gas being at $3.05 vs $2.65.
Again, genuinely curious, as I work from home.
It wouldn't be a big deal if 1) a household only had to put gas in 1 vehicle .I have 4 vehicles-spouse,myself and 2 kids. We need approx. 60 gallons/wk. That's for work/school and very little extra running around. So that .40 increase is actually a $25/wk increase. 2) When people must buy a product to function daily and the company you purchase it from makes billions in profits it becomes irritating. Gas isn't an option such as steak vs. chicken. Yea...take a bus,move,ride a bike blah blah blah are unrealistic for a lot of people.
I don't disagree with your logic, but it just all sounds like #firstworldproblems to me. Your kids don't both NEED a car. And if they do, they could certainly get a job and pay for their own gas, teaching them how to budget for what they want...or just maybe encouraging them to carpool together.
And the "blah, blah, blah" you talk about are not unrealistic--they are INCONVENIENT. Which is precisely my point. We don't buy gas because we are forced to. We buy it because we value the convenience of driving ourselves where we want, when we want, and with whom we want more than we value the cost of gas.
Walking to a bus stop, waiting for the bus, having to take the bus to school instead of being a cool kid with a car, and then taking the bus home is INCONVENIENT for your kids. It's not unrealistic or unavailable. And if they have an after school activity, you picking them up from school after practice or whatever is INCONVENIENT for you and them. It's not unrealistic.
I'm not one of those "we should drive less to preserve the environment" people. I enjoy living in a country where we can choose to make use of a freedom like driving our own cars. But let's at least be honest about things and tell it like it is.
It's not about the difference between 3.05 and 2.65 anymore. At one point it was but I can't that it's it now. Now it's the way we do things at my house just like turning off the lights and fans in unused rooms and turning up the air when nobody is home...
Before the market fell last Oct-Nov, gas around here was $3.69 a gallon. The low point earlier this year was $1.96 but it hovered around $2.25 for a couple of months before the current uptick. At the high point it cost us about $60 to fill up. At $2.25 around $36. For our two vehicles we saved $75-$100 per month.
Don't know how y'all handle your household finances but we have a certain pool of money we use monthly for these type of expenditures. When the price is low, that savings can be utilized elsewhere; whether added to savings or spent in any number of places for any number of things thus spreading the benefit. When the price is high, only the oil and gas companies reap the benefit.
Don't know how y'all handle your household finances but we have a certain pool of money we use monthly for these type of expenditures. When the price is low, that savings can be utilized elsewhere; whether added to savings or spent in any number of places for any number of things thus spreading the benefit. When the price is high, only the oil and gas companies reap the benefit.
So what would the savings be if I had to drive to the school and pick them up??So me making a trip back and forth is different than him driving there?How?
As I said, public bus transportation doesn't run everywhere. In particular, it isn't even close to where I live. My kids do work as many hours as they can but it is greatly impacted by playing sports(yes another choice...I suppose)
Personally, I don't mind paying $2.50/gal but when it gets up to $3-4/gal that's another story.
Them both driving themselves is two trips back and forth. Them carpooling together and/or you taking them together is one trip back and forth. How is that not saving a trip every single day?
The school bus doesn't have a stop within a mile of your house? Unless they attend a private school, the school bus should come somewhere near your house.
Like I said, I prefer the convenience and I'm sure you and your kids do too. There is no fault in wanting convenience. Just don't confuse that with a need.
I believe I stated public bus transportation meaning for people to take a bus to work.
As far as the kids, they both participate in 2 different sports at the current time which has different schedules.
There is no sense in arguing about convenience vs. need. We could all live in a tent ,walk to work, eat wild berries, kill our food, be unemployed and so on. The only thing we really need is air and the sun. Everything else is just a convenience.
While I choose to be realistic and practical you can continue on with what is needed and what is a convenience.
The fact that the US does not have mass transit in 98% of the country still eludes you.. So your saying walking to the bus stop, waiting on a bus etc.. is not realistic. Until this country invests in solid mass transit like the rest of the civilized world has done your argument is completely moot.
It actually doesn't. I don't know if 98% is accurate or not (I assume it's not accurate if you're talking about population and not geography), but I understand quite well that mass transit isn't effective or efficient in the US. Even when I lived in ATL, I had to drive my car in order to take MARTA, which sort of defeats the purpose of mass transit. Having lived in DC, and spent a lot of my youth in London, having an efficient mass transit system is wonderful for a number of reasons. Teaches kids about reading maps and following directions, helps prevent drinking and driving, allows one to read or do work during commutes, and many more.
But, not having effective/efficient mass transit still doesn't mean people need to drive or need to have everyone in the family own cars. It's like when people say they don't have time to workout. The more accurate way to phrase it is they don't prioritize or make time to workout. You don't need to go to a gym to workout. Working out can be as simple as doing some pushups, planks, lunges, mountain climbers, v-ups, and some jumping jacks in your back yard. But people in this country seem to have a problem with being honest with themselves and like to rationalize decisions to make themselves feel better.
Driving is the same way. Don't want to have to drive 30 minutes to work? You can find a job that lets you work from home, move closer to your work, carpool, or move somewhere that has mass transit. Of course, all those choices come with their own set of consequences and ramifications, but they are still choices. And even cities like Tallahassee do have city transport. There is a Tally bus stop about 1 mile from my house. I have no clue how often it comes or where it goes, because I don't choose to suffer the inconvenience or using it, but there is one to use.
I'll drop the issue now, because clearly it upsets people. I was genuinely curious to where people's breaking points were with the price of gasoline, so for the people who responded directly to those questions, I do appreciate it. I guess I just get tired of seeing our society complain about things they have the ability to change, but choose not to. Or make decisions knowing the consequences of those decisions, and then complain when those consequences occur. So I just try not to use euphemisms and rationalizations when I describe my life choices.
It's like the guy with two kids, each with a car, using their sports as the explanation why. Lots of kids play sports, and lots of kids carpool with other kids on the team. Or wait at school and do homework while their sibling finishes their practice. Or ride a bus for two hours home like Lamarcus Joyner did. I don't think it's a bad thing for both to have a car--in fact, I think it's a great thing that his family can afford to do that. I'm sure the kids are grateful too. But it is still a decision based on valuing the convenience of not having to go pick the kids up from practice every day more than the costs associated with both kids driving a car. I'm not saying I disagree with the decision at all--I would choose the same. I'm just saying be honest about the reasoning behind the decision.
I don't workout often because I don't prioritize it in my life. I own and drive a car because I value my time and travel freedom more than the costs associated with owning and driving a car. My wife also owns and drives a car for the same reason. We could save money and just own one car, but that would make things like doing different errands on a Saturday, or going out to separate places with our friends on a Friday night much more difficult and inconvenient. So we value the freedom and convenience more than the costs associated with a second car.
How hard is it to be honest about our decisions?
Measured it more by what I was spending per week on gas. When I started hitting $50/wk I changed my habits to keep it under $50/wk.
Actually, anyone who would exchange dollars for gas is reaping the benefits, or they wouldn't do it.
"The key insight of Adam Smith's Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another." Milton Friedman
If I trade $3 for a gallon of gasoline that gets me 20 miles, whereas I would have traded $5 for a gallon of gasoline that gets me 20 miles, do I measure my benefit just by the 20 miles I can go, or should I also have any appreciation for the $2 that I still have in my pocket?
cmanole's comments about competition are like sitting down at a bar to watch the 100m during the Olympics, and then have some guy next to me say it's not a 'real competition' because he only sees 10 guys in the lanes, and their times are so close it must be because they're colluding.
I usually just ignore that guy, and this thread serves as reminder why...
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