Wednesday, February 22, 2012

Really?

I certainly don't recall a sub-$2 gas price... but I won't quibble.  The jist of your post is solid, and I agree... but since you mentioned it, allow me this:

Adjusting for inflation (to today's dollar value), the average price of a gallon of gas in 1984 (when Reagan put the ban on speculation pricing on crude into effect) was right at $2.00, and it didn't move from there more than $.20 in either direction until 2002 (when Bush removed the ban on speculation pricing for crude).  The highest price in that 16-year span was (1990) $2.30 and the lowest (1998) was $1.75.  Since 2002, the average cost has been $2.85, with a high of $4.45 and a low of $2.00.

That's an average increase of 70% in the last 10 years over the previous 16 years.  Even removing the adjustment for inflation (2.9% per anum), we can't attribute the climb to averages over time... it is too drastic for that.  Look at the charts... you can SEE the month that the curbs are pulled out.  The price drops dramatically for 3 months (more than a 30% drop) then climbs steadily for the next ten years.

What more effective "brake" could you apply than a steady, month-by-month increase in the cost of the one commodity that runs our entire national economic engine?  I can't think of a single thing.

If all we were talking about were the effect that Federal and State taxes were having on the price per gallon, then the state-by-state comparisons would show that it simply wasn't profitable to work, live or travel through certain areas of the nation... and even now, that isn't a factor that can be discounted entirely... but it isn't the primary problem.  Even Ryan acknowledged this when he mentioned "any incident with Iran".  We haven't imported a single "legal" item from Iran since 1987... not a single drop of Iranian oil, gas or petroleum product has come into this nation since before Reagan left office.  See my point?  There is no glut on the crude market, now or in the foreseeable future.  The US (and indeed, most of the Western world) get only a fraction of the oil imports from Iran.  Iran trade mainly with India and China, and less than 2% of the rest of the global daily supply of oil is from Iranian wells... an amount easily recouped by even our poor domestic capacity.  So WHY should a problem developing within Syria (civil war, say) or a foreign policy "throw down" with Iran effect the price of gasoline so dramatically?  Why should we expect a $4+ gas price by summer?  Because it helps the national economy of the US to see companies like BP and Exxon put up another record-setting number of zeros behind their quarterly profit numbers?  2%... hell, I'll even go 5%... of the national commercial commodity margin goes to less than 40 companies, and the rest of the economy is reduced in growth numbers by the same percentages?  How is THAT good for the national agenda?

That's all, folks.

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