SansPretense

Ok, I’m tired of hearing how the evil big oil companies are driving up gas prices so they can make lots and lots of profits. I’m tired of the stupid chain letters going around and facebook groups asking people to boycott in some crazy scheme a gas company.

There are three factors for high gas prices from what I can see. Let’s look at them very quickly, since I need to get to bed soon. Here they are:

1) Supply and Demand – All those 3rd world countries we keep sending our jobs too have decided to join the modern economic world (for the most part). China and India have booming economies. Demand is growing for oil all over the world, which means, according to econ 101, the price goes up. How do we lower the price here? Nuke them. Since…(more after the break) we’re not willing to do that, I guess the best thing to do is increase supply. Saudi Arabia said recently that they would increase supply by a 1/2 million barrels a day. Thank you to our very radical rich Muslim friends, the Saudi’s for a bit of help…

Note also in the article that the King asked Western nations to do their part by lowering taxes on oil. Why are taxes so high on gas, especially in Europe where $4/gallon used to be the norm (now it’s $8/gallon in some places if I remember right)? Environmentalists believe that driving up the cost of gas will cause people to stop driving so much, hence saving our precious Earth from evil Capitalists Americans carbon dioxide molecules. Check out FactCheck.org for a breakdown on the cost of gas and how much the government makes vs. oil companies. Consider also that Obama supports high gas prices. He says that the high price isn’t the problem, it’s how fast the price increased. This is the vision of the Left for a “better America” where the people have to walk to work or take a 2 hour bus ride instead of a 30 minute commute to their job. When I spend roughly $40/week on gas to get to school/work everyday, unless you plan on supplementing my salary (which, by the way, is being generated through tax dollars), you can kiss my ass.

So here’s the question: who wants higher gas prices more? Exxon and “Big Oil”, who see that the result of higher gas prices means, ultimately (as the Saudi King worries as well), that the world has more motivation to find a different fuel source or lifestyle for the future? Or the environmentalists and Left-wing anti-capitalists who see higher-gas as an excuse to nationalize oil and shut down the economy to that of a third world socialist country “save the environment”.

You want to drastically make a difference in oil prices? Drill in ANWR, drill in the Midwest, restart drilling in the Gulf of Mexico (it’d also help the State of Louisiana by giving the economy there a great boost – and the politicians more money to pocket), and drill off of Florida and California. Why aren’t we drilling there? The environmentalists. The Democrats. And the rich assholes who don’t want an oil rig disturbing their view of blue oceans while they’re on their yachts in the middle of the ocean (since you can’t see the rigs from the shore). I don’t know how much of a difference it will make, but it would be a significant dent according to the Oil execs in their testimony before Congress.

2) The Falling value of the US Dollar: Why is the US Dollar falling in value? Because a) the government is in debt and experts don’t believe the US will be able to pay off the interest of the debt (let alone the debt itself) in the next couple of decades, and b) the trade deficit. In short, the US government and economy is on the verge of crisis. This on top of the housing market bubble bursting and a War in Iraq that the media swears we’re losing doesn’t make the US a promising investment. Since oil is bought and sold in US dollars, when the dollar loses value, oil prices go up. Simple…well, not really, but that’s my understanding of it. Only way to solve this for the goverment to stop spending money it doesn’t have and increase US exports. This cannot be done since companies as long as we force companies to work in an overtaxed, over-regulated economy. Sorry. Socialism strkes again…just too close to home.

3) Speculating. People see oil as making MORE money in the future (i.e., they feel the price will keep going up), so they buy more oil. Can’t fix this in a free market. When the speculation bubble bursts like the housing bubble (we hope), then prices will fall. Unfortunately, it sucks for us.

I think the environmentalists are wrong. I don’t think Americans can decrease demand (and the rest of the world surely won’t) enough to make them happy. America is NOT like Europe. We need cars here, since most of us commute or live away from major public transportation. So their theory on supply and demand saving the earth is wrong. Their policies will, however, lead us straight into a major economic crisis.