Bonehead Economics, or What?

[Rick Hubbard]

Bonehead economics remains alive and well! I have read that there some politicians who think a federal “gas tax holiday” is a great idea. That makes about as much sense as wetting your pants to stay warm during a snowstorm.

One of the presidential wannabes (can’t remember which) thinks the revenue shortfall could be offset by some kind of excess profits tax. It may be true that the tax would accomplish that objective, but it seems to me that oil companies would simply add that tax back into the price of their product and the 18 cent savings would almost instantly evaporate.

Am I missing something here? Tell me if I am.

Rick

[Mitchell Andrus]

Political pandering - If they Clinton or McBush were serious, they'd submit the bill and lobby for it's passage. We all know Bush wouldn't sign it anyway - so... it's an empty and safe jesture.

Maybe they got into Cliff's morels.

[Dave Hale]

This (off)-topic should be real interesting. :)

I don't see what you're missing.

Heard this a long time ago about Oil......

Only business model that can have a future cost of goods can increase and result in an immediate increase in price. (sure don't see it coming down as quick as it went up)

Another tact.... Only business who's cost of goods increase and they make record profits. Again, due to the immediate 'pass it on' mentality.

I'm sure some economist can poke holes or show parallel business models but, man, we keep paying more and they make record profits? That's just not right for a commodity provider.

I'll tell ya, my company sure isn't providing Cost of Living Adjustments every year, so each 'ding' is taking it's toll. I can afford it, yes, but I sure feel for those who were tight, money-wise, before this.

[Lee Schierer]

Since the federal gas tax goes to repair our highways and bridges do we really want to cut back that revenue stream and let our highways and bridges not get repaired? Will 18 cents a gallon really make a difference? That would only save about $13 per month if you are buying $200 worth of gas per month. I'd rather know that the 50 bridges I drive across regularly are being well maintained.

[Tom Veatch]

...Am I missing something here? Tell me if I am.
...

Nope, not missing a thing. It's a mistake to think any corporation or business pays any taxes at all. That's just a part of the cost of doing business which is added to the sale price of the product. So the consumer winds up paying the tax, just not as an itemized line item.

[Brian Elfert]

A gas tax cut would simply increase demand for gasoline enough that the 18 cents would just go to the oil companies instead of to roads like it should. We need high prices to stick around so folks in $40,000 SUVs that get 14 MPG won't keep driving 80 MPH.

Stupid idea.

[Rick Hubbard]

We need high prices to stick around so folks in $40,000 SUVs that get 14 MPG won't keep driving 80 MPH.


It could be argued that it is patently unfair to single out drivers with $40,000 SUV’s that drive 80 MPH (and in fact, that argument is made on a regular basis). The fundamental assumption is that those folks can afford such vehicles and that they can likewise afford to squander gas by driving at inefficient speeds. Indeed, it is said, they have every right to do so.

What this line of reasoning ignores, however, is that by consuming a larger proportion of natural resources they are in fact impacting the price of gasoline for more thrift-conscious drivers. Nevertheless, the “its-my-money” argument seems to be persuasive to public policy makers, so there is no real political will to rein in gas guzzlers.

I’ve floated the idea to some of our state legislators that we should enact something like a gas-guzzler tax here in this state that would test the water to find out just how much of their money drivers of $40,000 SUV’s are really willing to spend for the sheer joy of ownership. In a nutshell, I suggested that vehicles less than 5 years old with an EPA mileage rating less than 24 MPG should pay a registration surcharge of 300%. Vehicles in the same age range with EPA mileage ratings between 25 And 31 MPG should pay a 200% surcharge, while vehicles less than 5 years old with an EPA rating of 31-36 would pay no additional surcharge. At the opposite end of the spectrum, any vehicle (regardless of age) with an EPA mileage rating of 37 MPG or greater would be exempt from all annual registration fees.

In every case, when I spoke to legislators about this, I was careful to speak as softly as possible, but in spite of my care, they have all now gone deaf!

[Jason Roehl]

It could be argued that it is patently unfair to single out drivers with $40,000 SUV’s that drive 80 MPH (and in fact, that argument is made on a regular basis). The fundamental assumption is that those folks can afford such vehicles and that they can likewise afford to squander gas by driving at inefficient speeds. Indeed, it is said, they have every right to do so.



Except that nowhere in the U.S. is the speed limit 80 MPH...so they don't have that right.

80 MPH is slow along my stretch of I-65. I see a lot of SUVs and Lexii going in excess of 90 MPH between Chi-town and Indy.

On edit: BTW, talking about which candidate wants to do what will get this thread pulled/locked by the mods. I believe we can discuss the economics as long as we leave the politics out of it (pointing fingers at certain people or parties, etc.)

[Brian Elfert]

It could be argued that it is patently unfair to single out drivers with $40,000 SUV’s that drive 80 MPH (and in fact, that argument is made on a regular basis). The fundamental assumption is that those folks can afford such vehicles and that they can likewise afford to squander gas by driving at inefficient speeds. Indeed, it is said, they have every right to do so.


It is mostly expensive lower MPG vehicles I see flying by me so I do single them out. The people who can't afford these type of vehicles probably can't afford to drive 80 MPH with today's gas prices. My personal opinion is gas prices aren't high enough until the vast majority are going the speed limit (70 MPH here) or less.

The movie stars and other high paid folks who buy gas regardless of price and drive whatever speed they feel like are driving up gas prices for the average folks. They forget those average folks are who made them rich and they won't be going to movies or buying stuff because that money is going into the gas tank.

A note on gas prices: It was noted on the news recently that oil refineries are running at low utilization rates (for the time of year) due to lower gasoline consumption. I suppose the oil companies don't want to increase supply and have to settle for less profit. This means that new oil refineries won't necessarily help prices as the oil companies will still restrict production to keep prices up.

[Rick Hubbard]

A note on gas prices: It was noted on the news recently that oil refineries are running at low utilization rates (for the time of year) due to lower gasoline consumption. I suppose the oil companies don't want to increase supply and have to settle for less profit. This means that new oil refineries won't necessarily help prices as the oil companies will still restrict production to keep prices up.

I heard the same thing (that refineries are running well under capacity). This is a curiosity: one would expect that lower demand would translate into lower fuel prices at the pump. The first thing that comes to mind is that prices are being “manipulated” by the refiners through contrived supply restrictions (i.e., below-capacity production). It seems, though, that this is not the case. All the data I have seen is that refiner profit margins through the first quarter of 2008 are 35% LESS than they were for the same quarter in 2007. If there is some kind of hanky-pank going on, the people behind it are pretty inept, I’d say.

[Jim Becker]

I will reiterate Jason's warning...no politics. Stick with economics to avoid TOS issues and to have an interesting discussion. Thank you in advance for your cooperation.

Jim
SMC Moderator

[JohnT Fitzgerald]

Thanks Jason and Jim for the "Reminder". I was about to jump on the "SUV" discussion but now will refrain.

on the economics side....I read recently about the amount of 'float' invested in oil futures, and how much more $ it is than even just 6 years ago - makes you wonder how much speculation is causing the runup in prices. Also makes one wonder what would happen if prices started coming down and people needed to 'cover' their losses...

[Rob Bodenschatz]

Except that nowhere in the U.S. is the speed limit 80 MPH...so they don't have that right.

Actually, that's not true:

87901

[Jason Roehl]

Rob, I KNEW there'd be some wiseguy to point out the error of my assertion. I'm pretty certain, though, that an 80 MPH speed limit is by far the exception and not the rule (70 MPH tops in IN, and only on rural stretches of interstate).

By "averaging" all the factors I'm hearing, the most common ones causing the high gas prices now are: weak U.S. dollar, intense speculation on the market, refinery bottlenecks (I think we're in the summer reformulation stretch), high fuel demand (may not be peak, but still higher than 3-5 years ago), and high oil demand in Asia (China and India to be precise)--and the Asian market is just getting going; there is a LOT more potential for fossil fuel consumption there.

[Rob Russell]

John,

You can post an opposing opinion on the "SUV" issue - that's not pure politics. Still, the issue could get inflammatory, in which case we will move or lock the thread. So, as an example, if you were going to post about having a Ford Excursion because you have 5 kids, regularly need to transport them, the wife and a lot of associated stuff and a mini-van doesn't work because it's not big enough ... that's not a political post.

Personally, I do not believe that the gas tax holiday is a good idea. I believe the economic arguments that lower costs will increase demand and the prices will creep back up to pre-holiday levels. That basically means that the federal government would be giving money to the oil industry (primarily oil companies, refineries and distributors - not the gas stations because their profits are pretty consistently just a few cents per gallon).

I also believe that - if it hurts enough - people find ways to adapt. Carpooling, mass transit (even driving to commuter lots and taking a bus), or riding a bicycle are all ways to reduce fuel consumption.

[Glenn Clabo]

NEW YORK (CNNMoney.com) -- Exxon Mobil made history on Friday by reporting the highest quarterly and annual profits ever for a U.S. company, boosted in large part by soaring crude prices.
Exxon, the world's largest publicly traded oil company, said fourth-quarter net income rose 14% to $11.66 billion. ($11,660,000,000.00)

The profit topped Exxon's previous quarterly record of $10.7 billion, set in the fourth quarter of 2005, which also was an all-time high for a U.S. corporation.

Exxon also set an annual profit record by earning $40.61 billion last year - or nearly $1,300 per second in 2007. That exceeded its previous record of $39.5 billion in 2006. In the fourth quarter, the company said revenue rose 29.5% from a year ago to $116.64 billion.

[Lee DeRaud]

...no politics. Stick with economics to avoid TOS issues...I am continually astonished that anyone actually believes there's any practical difference between "politics" and "economics".:eek:

(Or "religion", for that matter...but that's yet another TOS violation.:cool:)

[Mike Henderson]

It could be argued that it is patently unfair to single out drivers with $40,000 SUV’s that drive 80 MPH (and in fact, that argument is made on a regular basis). The fundamental assumption is that those folks can afford such vehicles and that they can likewise afford to squander gas by driving at inefficient speeds. Indeed, it is said, they have every right to do so.

What this line of reasoning ignores, however, is that by consuming a larger proportion of natural resources they are in fact impacting the price of gasoline for more thrift-conscious drivers. Nevertheless, the “its-my-money” argument seems to be persuasive to public policy makers, so there is no real political will to rein in gas guzzlers.

I’ve floated the idea to some of our state legislators that we should enact something like a gas-guzzler tax here in this state that would test the water to find out just how much of their money drivers of $40,000 SUV’s are really willing to spend for the sheer joy of ownership. In a nutshell, I suggested that vehicles less than 5 years old with an EPA mileage rating less than 24 MPG should pay a registration surcharge of 300%. Vehicles in the same age range with EPA mileage ratings between 25 And 31 MPG should pay a 200% surcharge, while vehicles less than 5 years old with an EPA rating of 31-36 would pay no additional surcharge. At the opposite end of the spectrum, any vehicle (regardless of age) with an EPA mileage rating of 37 MPG or greater would be exempt from all annual registration fees.

In every case, when I spoke to legislators about this, I was careful to speak as softly as possible, but in spite of my care, they have all now gone deaf!
There was a proposal in London to do something like this. London has a congestion charge to drive into certain parts of the city. They don't have toll booths - they use cameras. If you're going to drive into the city, you have to either call or go on line and pay a fee for the day - sort of a "right to drive in central London". They take pictures of the cars in the city and do recognition on the license plates to see if you paid your congestion fee. If not, there's a big fine.

The recent proposal was that the fee would vary based on the fuel consumption (essentially MPG). So if you had a big Hummer, your congestion fee would be very big, while if you had a Prius, your congestion fee would be quite small. I don't know if that went into effect, but the congestion fee definitely is in effect.

Mike

[Mike Henderson]

I am continually astonished that anyone actually believes there's any practical difference between "politics" and "economics".:eek:

(Or "religion", for that matter...but that's yet another TOS violation.:cool:)
Well, almost everything is economics when you dig deep enough.

Mike

[Pat Germain]

I personally do not see anything wrong with a corporation making profits, record or otherwise. Heck, I wish I owned a lot of Exxon stock.

As much as I hate high gas prices, and as tempting as it is to blame US oil companies, I haven't seen any credible evidence backing up all the conspiracy theories I hear so much about. Oil prices are high worldwide and all oil companies are reaping huge profits. That's economics.

Furthermore, I think it's ridiculous for Congress to berate Exxon for not investing more money in alternative energy research. Hello, they're an oil company, for crying out loud. Why should they invest in developing products in direct competition with their primary product? PETA might as well ask cattle ranchers to invest in developing a meat substitute.

I don't think temporarily eliminating the federal gas tax will benefit consumers. However, as Glen Beck suggests, drilling through caribou heads in the Arctic and sucking more oil from the ground might. (I don't necessarily support this idea. I just think it might help consumers.)

[JohnT Fitzgerald]

In general, I agree - it's not any sort of 'conspiracy' other than people (and companies) looking to make a lot of money.

I found this article that tries to explain how world pricing of oil works, and how it's a system run amok. http://www.globalresearch.ca/index.php?context=va&aid=8878

the phrase that caught my interest is "paper oil".

[Chris Padilla]

http://www.boston.com/news/local/massachusetts/articles/2008/05/06/frustrated_owners_try_to_unload_their_guzzlers/

I'm digging the high gas prices...Americans only respond when things tickle their pocketbooks a little too much....

[Paul Geer]

Well, One thing is for certain, the price of a barrel of oil will not come down any time soon, and the price per gallon of gasoilne will not come down any time at all. The price only goes up. I have never seen prices drop for anything. So no matter what any politician will say they will do, will not have any effect on gas prices, nor willing to do so in earnest.

[Rick Hubbard]

I read recently about the amount of 'float' invested in oil futures, and how much more $ it is than even just 6 years ago - makes you wonder how much speculation is causing the runup in prices. Also makes one wonder what would happen if prices started coming down and people needed to 'cover' their losses...

Well, "covering losses" is a crap shoot, in my humble opinion. If you can find THREE economists who will hold forth on the possible consequences you will no doubt wind up with FOUR opinions!
It seems to me that much of the outcome will depend on WHAT exactly precipitates the market decline (a discussion of which I suspect will lead into the verboten P category, so I won’t mention it further). But it also depends on which “futures” market you wish to examine. Commodity contract futures (where you actually agree to take possession of a quantity of product, which in this case a contract would be 1,000 barrels or 42,000 gallons per contract) are inherently less volatile and the effect of a radical downturn in the market would be more or less minimal since there is a physical product involved that has some intrinsic value that could be sold for SOME amount of currency (but not necessarily dollars). On the other hand, investments in oil derivatives (such as futures indices) are nothing more than unsecured wagers on whether commodity contract prices will go up or down by some set amount, are tremendously volatile and when a benchmark is missed, the value of these derivative share immediately plunge to ZERO. These investments are virtually unregulated, so the margin requirements vary widely from one fund to another. Usually investors in these exotic instruments are the highest of the high-rollers, so you can bet that even if the investments are not firmly hedged, no loss would be devastating.
The short answer, I guess, is that it is VERY unlikely that a sharp decline in crude oil prices would have any serious long-term effects (unless you are an individual investor who has purchased, say, 10 thousand-barrel contracts at $121,000 each and oil falls by $3.00 a barrel on the very day the contract matures and you take a 30 grand bath). That would make a big dent in your new tool budget!:eek:

[Mike Cutler]

Rick, Dude. if you become emperor for a day could you uh,, please cut me a little slack in your progressive tax based on EPA mileage. I only have a Toyota pickup and it doesn't meet those standards. It only cost $20k new. Please.;)
Once you become emperor though, you have to remove the tax from home heating oil. Folks shouldn't have to pay a tax to heat their home in the winter. Home heating oil costs are really hurting people here in the northeast.

Chris.
I thought I had it bad. That guy in that article is way worse off than I am. I have to fill up once per week ,15 gallons, just to get to work and back.
Wow! 3 fillups at $75.00 each, per week.

Everything is going up with the price of oil. No matter how economically we elect to drive. Everyone is going to pay.

[Chris Padilla]

Chris.
I thought I had it bad. That guy in that article is way worse off than I am. I have to fill up once per week ,15 gallons, just to get to work and back.
Wow! 3 fillups at $75.00 each, per week.

Everything is going up with the price of oil. No matter how economically we elect to drive. Everyone is going to pay.

Time to dust off the two-wheeler, Mike!! It'll make you feel young again! ;)

[Greg Peterson]

No simple answers, no quick fixes. The nature of things present and to come are beyond our ability to influence to our personal benefit. I can't buy a vote on the hill so I'm not counting on any legislation trickling down into my wallet.

Best bet is to suck it up, tighten the belt. It's going to be a bumpy ride and not everyone will get through it unscathed.

[Doug Shepard]

I think there is an opportunity that none of the politicians is mentioning. I'd like to see somebody propose a bill to provide tax incentives to businesses that implement tele-commuting for their employees. The workers get immediate relief from gas costs, gas consumption goes down, demand (and cost) go down, and business gets a tax break to offset costs of laptops, cellphones, etc. How come none of these geniuses is putting this forward? Seems like a real no-brainer.

[Jim Becker]

Doug, Chris and I would not complain about that since we work for the top two companies in the telcom industry that provide remote worker communication solutions! :D In fact, I've been working that way for over 11 years now with the normal commute decision being "front stairs or back". That gets simplified soon with my new office directly across the hall from our new master bedroom. LOL

But more seriously, legislation or not, I truly think there are a lot more folks who could effectively work virtual than do today. And for employers, there is a very nice labor market to tap including folks with disabilities, stay at home parents and people who live in more rural areas. When you consider both the "commute" savings as well as the huge incentive relative to real estate costs, for the right people in the right jobs, it absolutely makes sense even if gasoline dropped a buck tomorrow.

[Pat Germain]

Well, One thing is for certain, the price of a barrel of oil will not come down any time soon, and the price per gallon of gasoilne will not come down any time at all. The price only goes up.

Actually, prices come down all the time, Paul. Every fall, the prices fall. That is, except right after Hurricane Katrina. As I recall, that was the first time we saw gasoline over $3.00 gallon. It eventually came down again. Only recently did it go back over $3.00 a gallon. Thus, it did go down, albeit only slightly.

I do agree the overall trend is prices getting higher and higher.

[Ken Fitzgerald]

Doug, Chris and I would not complain about that since we work for the top two companies in the telcom industry that provide remote worker communication solutions! :D In fact, I've been working that way for over 11 years now with the normal commute decision being "front stairs or back". That gets simplified soon with my new office directly across the hall from our new master bedroom. LOL

But more seriously, legislation or not, I truly think there are a lot more folks who could effectively work virtual than do today. And for employers, there is a very nice labor market to tap including folks with disabilities, stay at home parents and people who live in more rural areas. When you consider both the "commute" savings as well as the huge incentive relative to real estate costs, for the right people in the right jobs, it absolutely makes sense even if gasoline dropped a buck tomorrow.

Jim,

I've been telecommuting and commuting for 32 years this year. The problem is with the office in the house, I can never get away from it.:(

[Eddie Watkins]

Just to point out, one reason people drive the big SUV's is to have room for a larege family. I had a co-worker who has five kids with several still in car seats and I asked her one day why she didn'r get a more economical car. Her repsonse was that she needed the bigger vehicle in order for her children to all be in car seats and/or able to buckle up safely and all go in a single vehicle. Just telling what I was told so please don't shoot the messenger.
I have a full size pickup because I do remodeling and need it to haul my tools. I do drive the speed limit and I get 18.1 mpg so slowing down does help. I have looked into buying a small gas sipper car but there is really no personal economy there by the time I pay for another vehicle and cover insurance and maintenance.
On topic, I don't see the benefit of eliminating the gas taxes, the damage to your hehicle bad roads can cause can far exceed any savings you will incur.

Eddie

[Mike Cutler]

Just to point out, one reason people drive the big SUV's is to have room for a larege family. I had a co-worker who has five kids with several still in car seats and I asked her one day why she didn'r get a more economical car. Her repsonse was that she needed the bigger vehicle in order for her children to all be in car seats and/or able to buckle up safely and all go in a single vehicle. Just telling what I was told so please don't shoot the messenger.

Eddie

When I was a little weegun, Mom's drove "Station Wagons".
Big gas guzzling battle cruisers to get us around. For some folks the SUV is the modern day equivalent of the station wagon, sometimes you need a bigger vehicle.
Remember the Vista Cruiser, or the Ford Galaxy 500 wagons? They weren't exactly gas efficient, but a zillion little kids made it to little league practice in them.
It's a tough situation all around.

[Rob Russell]

Doug, Chris and I would not complain about that since we work for the top two companies in the telcom industry that provide remote worker communication solutions! :D In fact, I've been working that way for over 11 years now with the normal commute decision being "front stairs or back". That gets simplified soon with my new office directly across the hall from our new master bedroom. LOL

But more seriously, legislation or not, I truly think there are a lot more folks who could effectively work virtual than do today. And for employers, there is a very nice labor market to tap including folks with disabilities, stay at home parents and people who live in more rural areas. When you consider both the "commute" savings as well as the huge incentive relative to real estate costs, for the right people in the right jobs, it absolutely makes sense even if gasoline dropped a buck tomorrow.

Some telecommuting works well. All of my staff are setup to telecommute, although they generally work in the office. It's not at all uncommon for them to work from home a day a week because it's convenient for them, and in the winter with snow storms the office can be a ghost town.

My staff has also said that pure telecommuting would cut into their productivity because of the loss of the impromptu "turn your chair around and talk" bouncing of ideas off one another.

[Rick Hubbard]

Rick, Dude. if you become emperor for a day could you uh,, please cut me a little slack in your progressive tax based on EPA mileage. I only have a Toyota pickup and it doesn't meet those standards. It only cost $20k new. Please.;)


Hi Mike-

Emperor for a day? Wow, that has a nice ring to it, but I think I’ll pass- I already have to deal with too many people who would like to throw things at me.

But if I WERE emperor for a day, I’d grant special dispensation to people in CT by giving tax credits for installing flame-throwers, rocket launchers or machine guns on any vehicle used for travel on I-95 or I-84. That would ease congestion and probably discourage folks from any unnecessary driving.:D

On a more serious note, however, I’m very curious about CT’s tax policy visa-vis heating oil. Is there a per-gallon rate or is it a case of sales tax being applied to the gross sale amount? Here in Maine, home heating fuel is exempt from state sales tax (the exception being heating oil purchased in 5 gallon “pre-packaged” containers, but I think the legislature is working on that issue).

Rick

[Jim Becker]

The problem is with the office in the house, I can never get away from it.

That can be very true. Some managers are surprised that a good segment of their remote workers actually work more when home based. Just as it takes some strong work ethics to make a virtual situation, well...work...it also takes some self control to keep from working too much. I'm not referring to checking and answering email at odd hours...but rather, situations where someone just can't "put it down" and attend to non-work activities and family.

That said, something that has changed over the past few years is our ability to have the same capabilities (technically) in virtual office situations as folks who work in the headquarters. It used to be what I'll term "functional compromise" because we didn't have the high speed connections most of us have access to now and didn't have the technology that allows for complete "normal business" feature/functionality no matter where we are; be it our home office or the airport concourse. Even working in the telcom business, it's only been a few years that I've had the really kewel stuff that I have now and many businesses are still dealing with both the technology and human aspects of a virtual enterprise.

But I think it's a good thing that this option is available as economic forces do what they are doing. It will be helpful in many situations.

[Chuck Saunders]

This is an aside but, I find it interesting that the term "battle cruiser station wagon" seems to be almost a globally accepted moniker.

On topic
-Gas tax holiday would have no positive effect
-Lower speeds lower fuel usage
-Fuel prices will go up regardless
-Sometimes you need to evaluate a vehicle's efficiency based on people miles per gallon. That is how 6MPG transit buses save fuel.

[Pat Germain]

That said, something that has changed over the past few years is our ability to have the same capabilities (technically) in virtual office situations as folks who work in the headquarters. It used to be what I'll term "functional compromise" because we didn't have the high speed connections most of us have access to now and didn't have the technology that allows for complete "normal business" feature/functionality no matter where we are; be it our home office or the airport concourse. Even working in the telcom business, it's only been a few years that I've had the really kewel stuff that I have now and many businesses are still dealing with both the technology and human aspects of a virtual enterprise.

I hear you there, Jim. I work at a government facility and my employer puts everything on their web site, like HR functions, and puts it behind a firewall. Therefore, us offsite folks can't get to it. I'm forever receiving emails demanding I do things like online training which I can't access.

Many employers would have to overcome major attitude problems toward telecommuting. Shoot, it would be nice if they just supported carpooling. Sharing rides is tough when people get stuck in stupid meeting that drag on for hours beyond schedule.

[Lee DeRaud]

Remember the Vista Cruiser, or the Ford Galaxy 500 wagons?Yup. Third-row seating (facing backwards, which was always a hoot), and a floor deck that would take full sheets of plywood.

I think people tend to forget how big cars used to be.

[Rob Bodenschatz]

Yup. Third-row seating (facing backwards, which was always a hoot),

You must be referring to the "Tail Gunners". :D

[Jeffrey Makiel]

I find that most people believe that money is the driver of everything we do today. And the tax system is the best tool to make things happen. This ideology is probably what gives us “bonehead economics”.

Unfortunately, the taxation system in the US continues to get more and more twisted as the ‘flat tax’ initiative fades further away. Whether it is regarding the manipulation of consumer tax laws, income tax or real estate tax laws, the taxation system is being used to try to solve everything economic. Take a look at a 1040 income tax form and note how complicated and prejudicial it has become.

A previous post discussed another example of applying a tax surcharge for folks with large and low gas mileage vehicles. However, why should folks that have money be able to buy their way out of their responsibility to conserve natural resources and ignore our national goal towards energy independence? I thought the intent of the corporate average fuel economy law (CAFE) did just this.

Suspending the gas tax is another twisted way to try to offset economic pain as the oil industry continues to consolidate and moves towards monopolization. I thought the gas tax was to improve our aging transportation infrastructure, and I thought the anti-trust laws were there to protect consumerism.

I have a better idea. Why not revert back to the way my parents lived when our country would create and/or enforce existing laws that would apply and benefit every American regardless of financial status? We need to bring back the old saying "money can't buy everything".

-Jeff :)

[Dennis Peacock]

My staff has also said that pure telecommuting would cut into their productivity because of the loss of the impromptu "turn your chair around and talk" bouncing of ideas off one another.

Yup....we have many "get in the cube isle meetings" that work out to solve solutions and to exchange ideas. Many times, it's these types of "meetings" where we actually solve problems that could have cost the company $$$$ is manpower hours to make little to no headway on problem solution.

Sometimes...it's the Free and Simple solutions that can solve some big money issues. :)

[Brian Elfert]

Part of the issue with telecommuting is managers and companies who think that they actually have to see employees in their cubes every day or they think employees aren't really working. My manager certainly doesn't track what I do on a daily basis and I know he rarely see some of his employees when they are at the office.

Other than actual hardware changes or hardware outages we could do everything from home as long we have Internet access.

[Chris Padilla]

I like the human interaction I have at work but then again I have a job that requires me to be at the job. I do a lot of lab work, measuring things, troubleshooting printed circuit boards, etc. but I do have part of my job that can be done anywhere with access (simulation work, for example).

[Jim Becker]

My staff has also said that pure telecommuting would cut into their productivity because of the loss of the impromptu "turn your chair around and talk" bouncing of ideas off one another.

That's what we use IM for now...I always found being in an office "distracting" and get more done at home, despite hourly birdie head scratches. (which are a required thing around here for the human occupants to perform on their avian masters) I will certainly admit that face to face interaction is very important and useful...in fact, I insist upon it for customer meetings when it is possible...but I also find other forms of spontaneously communication very useful, too.

[Rob Russell]

That's what we use IM for now...I always found being in an office "distracting" and get more done at home, despite hourly birdie head scratches. (which are a required thing around here for the human occupants to perform on their avian masters) I will certainly admit that face to face interaction is very important and useful...in fact, I insist upon it for customer meetings when it is possible...but I also find other forms of spontaneously communication very useful, too.

It's sort of difficult to do a "hey take a look at this on my screen" remotely, unless you have the ability to share or take over sessions ...

[Jon Lanier]

Shooting for long term alternatives without taking care of the immediate need, is like telling a hungry child, don't worry when you get old enough to work you'll be able to eat.

Well, we can drill safely in area's now without impacting the environment (God Forbid) and in enough area's to get us out of OPEC. All we need to do is get permission from... you know who.... to go get it and then, those 'profits' could go to making some new refinery's, if they were given permission.

That would cure short term, and then alternative fuels could be explored for the long term.

[Jeffrey Makiel]

That would cure short term, and then alternative fuels could be explored for the long term.

Unfortunately, the US Department of Energy's budget for basic energy research has been declining in the last decade. Research on high energy flux fuels, such as fusion power, are essentially now on life support. The upcoming budget for 2009 and 2010 looks even worse.

Who would have thunk this would be happening with nearing $4.00 per gallon gasoline prices, a war that involves oil, and an increased environmental awareness these days. I suppose an 18 cents per gallon reduction by temporary eliminating federal tax for roadways will fix everything. :)

-Jeff :)

[Stephen Beckham]

Well - I believe I've stated this one before, but my first duty assignment in Germany 1988-1990 introduced me to $1.10 - $1.20 per liter gas (about $3.60 a gallon in Dollars/gallon over liters back then). I found it amazing that the US employees/soldiers could purchase gas coupons. When used - it made the gas amounts back to about $1.40 per gallon. I know they still sell the coupons, not sure what the cost difference is now. Bottom line - government subsidized gas for the Americans living there...

Europeans have been paying $4 a gallon for years. I noticed that a lot of our overseas Creekers have left this thread alone. Hope they're not laughing at the us having a pinch over gas prices.

I'd love it if one of the economists that we're addressing here could explain why it's taken 20 years for our prices to get as high as theirs - were we just lucky or has it caught up with us?

I'd like to know why we have 27 different blends of gas & seven different Octane levels - can't our scientist come up with the right stuff in three or four blends that will work in any state?

I'd like to know why we are having shortages of corn, but our government is still paying corn farmers to leave portions of thier acreage unplanted (more subsidies?).

I'd love to know why nobody has admitted the extra tax placed on Diesel for 'clean air act' caused more inflation than expected (yes it has, tractors use it to plant and harvest, trucks deliver it to factories, more trucks deliver it to stores). Basically produce is effected four times with the tax placed on diesel in the name of clean air - but corn's gone up because of bio-fuels...? I'd like to know why the lie about why the price of corn is going up? Funny - cost of moonshine hasn't seemed to gone up any....:D




And finally - Who bought all the rice?


Well - I'm not upset even though some of the questions may seem like it - and I hope I was able to remove all the TOS violations in the iteration of this before posting... Just trying to give some econoic influencers to discuss.

[Rick Hubbard]

Maybe I’M the one who is a bonehead here, but I’ve done some arithmetic that has me puzzled:

A barrel of oil contains 42 gallons
A barrel of oil is selling for roughly $120 (or about $2.86 per gallon)
A barrel of oil yields about 19.5 gallons of gasoline
A gallon of gasoline for June delivery is selling for $3.11 on NYMEX

How is this sustainable when a barrel of oil that costs $120 only yields gasoline that is worth $60.65???:confused:

[JohnT Fitzgerald]

I think this is their argument - that there is not a lot of margin in turning oil into gas.

don't forget, the other 50% of the oil gets turned into *other*products that they sell.

[Chris Padilla]

Plastic, Baby, plastic....

[Jon Lanier]

Our European friends need to realize that when our fuel goes up, their will go up higher as well. Maybe not now but it will, just due to volume. I don't think they'll be laughing then.

[Jason Roehl]

Maybe I’M the one who is a bonehead here, but I’ve done some arithmetic that has me puzzled:

A barrel of oil contains 42 gallons
A barrel of oil is selling for roughly $120 (or about $2.86 per gallon)
A barrel of oil yields about 19.5 gallons of gasoline
A gallon of gasoline for June delivery is selling for $3.11 on NYMEX

How is this sustainable when a barrel of oil that costs $120 only yields gasoline that is worth $60.65???:confused:

Three things:

1. $120/bbl is the price oil companies are getting for selling oil to each other via speculators to cover local shortfalls. The vast majority of oil stays in-house from ground to refinery, and the cost to get it to the refinery is in the $30-40/bbl range.

2. I just read a couple days ago that current hydrocarbon-cracking technology allows refiners to get closer to 24-ish gallons of gasoline out of a single barrel of oil.

3. As someone else mentioned, on top of the gasoline, there are other products that come out of a barrel of crude oil--diesel, kerosene, jet fuel, lubricants and other petroleum products, such as what is used to make plastic. With all the additives, one barrel actually yields in the neighborhood of 48-49 gallons of total refined product.

[Lee DeRaud]

Our European friends need to realize that when our fuel goes up, their will go up higher as well. Maybe not now but it will, just due to volume. I don't think they'll be laughing then.Unless someone's been lying to me for decades, most (all?) of the difference between their prices and our prices is taxes. I haven't heard about any European politicians blathering about "gas tax holidays"...almost makes you suspect they've found something useful to do with all those tax euros.:cool:

[Mark Kosmowski]

My own thoughts on hearing about the gas tax holiday were that if the government was really interested in helping the working class out regarding fuel, a fuel tax credit based on the work commute using a 30 mpg fuel efficiency vehicle would be more effective at actually getting the cash back to the consumers.

[Brian Elfert]

Europeans have seen gas prices go up too, but they didn't use as much gas to start with and their prices were also high to start with so prices haven't gone up over 300% like the USA.

The taxes on fuel in Europe generally pay for social programs. The high fuel taxes were also intended to be environmental to curb consumption.

[Chris Padilla]

The high fuel taxes were also intended to be environmental to curb consumption.

Ding, ding...we have a winner here!

Further, SUVs should get the GGT - Gas Guzzler Tax They currently do not nor ever have because they are a loosely defined "work truck"....

[Greg Peterson]

Even if the feds were to institute a Gas Tax Holiday, there is no guarantee the oil companies would pass the savings onto the consumers. They would be vilified and publicly condemned if they didn't pass it on, but what would or could anyone do about it?

They, and the oil cartel, know we are addicted to oil.

[Joe Pelonio]

This thread made me do some thinking, so I did some research and calculations and came up with some interesting facts.

I remember when in college buying gas for 35 cents a gallon, about 1971. Yesterday I filled up at $3.77, a difference of 977%.

Ground beef at the grocer was $0.49/lb, I see now it's about $4/lb, for an increase of 716%.

The median priced home (U.S.) was $30,000, now it's $206,000, an increase of 586% (here it was $529,000 in 2005 which is the latest I could find)

I bought a brand new vehicle in 1973 for $2,500, the equivalent today, if they still made a pinto squire wagon:eek: would be perhaps a Focus, at $16,430 minimum, or an increase of 557%

My first color TV then a 19" was $399, now the same size (flatscreen) is
about $350. Oops, that one went down 14%.

Minimum wage back then, which I made, working at a liquor store was $3/hour. Here in WA we have the highest in the U.S now at
$8.07/hr. but that's an increase of just 169%.

[Dennis Peacock]

And just think....according to a recent news article, the current fuel prices are all priced at 60% pure speculation. :rolleyes: (RDAH) :rolleyes:

[Jim Becker]

Further, SUVs should get the GGT - Gas Guzzler Tax They currently do not nor ever have because they are a loosely defined "work truck"....

I think that there would have to be a list of specific vehicles included in the class or excluded from the class for this to work fairly. My Highlander Hybrid gets 27-28 MPG. A Ford Escape Hybrid gets similar mileage. Both are SUVs in most folks minds. And then you have families like Professor Dr. SWMBO's youngest sister that needs a vehicle that seats 8 with some luggage space...the Suburban is one of the few that qualifies. MPG per Passenger might have to play a role, too, in that light as it does with a 6MPG city bus. Complicated, my friend!

[Brian Elfert]

Even if the feds were to institute a Gas Tax Holiday, there is no guarantee the oil companies would pass the savings onto the consumers. They would be vilified and publicly condemned if they didn't pass it on, but what would or could anyone do about it?


Does the gas station or the company that provides the gas to the station collect the fuel tax? They probably couldn't call it a tax, but nothing says the price couldn't be increased on the wholesale or retail level by the amount of the tax cut.

I suspect that in reality competition will force the stations to initially reduce the cost by the full 18 cents. Increased demand will probably push the costs back up to the level before the tax cut and nobody except the oil companies benefit.

[Chris Padilla]

This thread made me do some thinking, so I did some research and calculations and came up with some interesting facts.

I remember when in college buying gas for 35 cents a gallon, about 1971. Yesterday I filled up at $3.77, a difference of 977%.

Ground beef at the grocer was $0.49/lb, I see now it's about $4/lb, for an increase of 716%.

The median priced home (U.S.) was $30,000, now it's $206,000, an increase of 586% (here it was $529,000 in 2005 which is the latest I could find)

I bought a brand new vehicle in 1973 for $2,500, the equivalent today, if they still made a pinto squire wagon:eek: would be perhaps a Focus, at $16,430 minimum, or an increase of 557%

My first color TV then a 19" was $399, now the same size (flatscreen) is
about $350. Oops, that one went down 14%.

Minimum wage back then, which I made, working at a liquor store was $3/hour. Here in WA we have the highest in the U.S now at
$8.07/hr. but that's an increase of just 169%.

Didya include inflation in there, my friend?! :)

[Joe Chritz]

While I did not read all 80+ posts this is my .02.

Some low mileage vehicles are required. When someone makes a 40 MPG truck to haul sheet goods, lumber, horse trailers and the like I will buy one.

On gas prices. It seems a standard business decision. When people stop paying $3.50 a gallon they will stop charging it.

Joe

[John Shuk]

I'm for the tax reduction. I pay ALOT of taxes in many forms and I doubt the country will go broke by reducing this tax. I don't trust that the gov't is better at handling my money than I am.
I someone would like to volunteer they could cover my gas taxes for me.;)

[Brian Elfert]

I'm for the tax reduction. I pay ALOT of taxes in many forms and I doubt the country will go broke by reducing this tax. I don't trust that the gov't is better at handling my money than I am.


If you quit letting the goverment manage your money, are you also going to then provide your own police, fire, jails, and roads along with all other government services?

I do like to drive on roads so I want government to collect taxes to pay for them. Lord knows they wouldn't transfer money from another part of our taxes to pay for them. The only other real option is toll roads and some rural roads would have tolls so high nobody could afford to drive on them.

I was thinking about all the perceived government waste the other day. If we suddenly reduced government by say one third there would be milions of people unemployed all at once. How is government going to pay for unemployment benefits for all these folks let alone welfare, food stamps and other social services for those who can't find a job after unemployment runs out? There simply wouldn't be enough jobs for all these people at once, even the good hard workers.

A lot of government waste goes to contractors who hire workers. If every wasteful contract was terminated there would be even more people unemployed.

[Greg Peterson]

If people that live outside a metropolitan area, yet commute to work in the city center (some call it urban sprawl), would they be willing or able to pay the true cost of building and maintaining that ribbon of asphalt that connects them to the city? Would they, or could they pay for the miles of electrical cables required to deliver electricity and phone service to their secluded, private lot?

The Gas Tax Holiday is a sound bite that is only serving to stir the drink. The savings won't amount to anything on an individual basis, and what happens when fall comes around, long after everyone has gotten used to the tax cut, and the cost of gas shoots up eighteen cents overnight? We'll be worrying about heating oil prices next.

Best bet is to just dig in and get use to it. It's a free market economy and the oil companies will charge whatever the market will bear.

[Michael Morgan]

Well I have read most of the replies here and it's interesting reading all the different views and opinions. So here is my take on it.

1. Taxing people more that drive larger vehicles would do nothing positive at all. All it would do is reduce those peoples disposable income that could have been spent on other things that would help the economy.

2. Like it or not everyone in the US could start driving compact cars tomorrow and it's not going to do anything benificial in the long term at all. There is an entire world out there that is consuming more and more each day that is more than we can conserve.

3. Everyone seems to talk about what they are paying for fuel directly at the pump and the impact it's having. Thats nothing compared to the increase in costs for every product we buy that you don't even realize yet.

Now if I was calling the shots here is what I would do.

"Fellow Americans, drastic times call for drastic measures. Rising fuel prices are hurting almost everyone on every level. We have determined that we need to produce XXXXX more barrels a day to considerably lower fuel costs. So how are we able to do this? Well we are going to drill where ever we can on our soil and off our shores and which ever company can produce XXXXX more barrels per day can operate tax free for the next XX years. Now get to work!"

Love them or hate them but oil companies are like everyone else, if there is a financial incentive to produce more oil it would happen almost over night.



B.T.W. So far this week I have spent $375.00 on diesel fuel:(

[Jason Roehl]

Those are some good points, Michael, especially #2 and #3. I think that many don't consider the economy-wide impact of a gas-tax holiday. Sure, at the pump, it may only save most people a few dollars over the course of the summer, but all those goods they buy that are trucked around the country will get cheaper, too. Unfortunately, I think that the GTH would only let people use more gas and drive the price right back up to where it was. Then it would be a real shock when the GTH expired.

[Greg Cole]

Ding, ding...we have a winner here!

Further, SUVs should get the GGT - Gas Guzzler Tax They currently do not nor ever have because they are a loosely defined "work truck"....

We bought a Toyota Sequoia a couple years ago at work. The chassis underneath that urban assault vehicle is considered to be a 3/4 ton chassis according to Uncle Sam as we got an instant 25,000 tax credit for buying a "work truck".:confused:
Same year we also bought a 3/4 Ton Dodge Big Horn 4x4, double cab with 8 foot bed & turbo diesel. That land yacht is what I'd call a "work truck".
The Dodge will drain your wallet to fill with diesel but gets better mileage than the Toy. Yup, the "SUV" outta be classified as a guzzler.

Greg

[Michael Morgan]

Greg,

Here is what i don't understand either. Believe me when I say a am not out to destroy the enviroment but this country is regulating it's self right into the ground. My 2002 Ford with the 7.3 Power Stroke gets 15.5 to 17 m.p.g. and thats towing anywhere from 5000 - 8000 pounds every day. Now the 2008 diesels get maybe 10 m.p.g. at best (empty) because of a the new emmisions crapola. Did anyone take into account that as trucks are upgraded that we will be consuming 30% more fuel, also that additional 30% of fuel needs to be refined and delivered to fuel stations and it will take more fuel and energy to produce and deliver that 30% more. I wonder what the enviromental impact is on that?

[JohnT Fitzgerald]

I agree with your points about the gas tax holiday. IMO it's useless and frivolous.

as for the 'paying for the roads' - I don't agree. Those roads also allow us to go into the city for entertainment and business - dropping money on goods and services and tips to the workers in the city. Working in the city means a business or property that is being taxed by the city. These roads also lets the people in the city go out to do things - I know a LOT of people that live in the city but seem to spend an awful lot of time on the road to go skiing, mountain biking, to the beaches, etc. it's a two-way street (pun intended *grin*)

as for the 'commuting' part - there's an opportunity there. The local mass transit ("the T", in Boston) has seen a HUGE increase in ridership over the pasts couple of months. IMO they need to increase the infrastructure to make it more appealing. However, I live outside the city AND work outside the city, and even though I have a commuter rail station (train) in my town, there is absolutely ZERO pulic transportation other than into/out of Boston. so the message there is that unless you live or work in the city, you don't deserve public transportation. Does that make sense?

[Rick Malloy]

Doug, no tax break for companies that allow telecommuters. I was offered this option last year when a merger was affecting my geographical area. I turned it down because my building was not affected, but then at the end of the year thought about it again. The paperwork was requested, and when I asked when it would start I was told "as of last week". Seemed they couldn't get rid of me fast enough :-) The real reason behind the swift move, it cost my company almsot as much per month for my phone and network connections in an office as it does for my high speed at home, basically a wash for them. My home office is free for my company, the charge they paid for my cubicle was equivalent to a small apartment in the area. My work phone is VOIP thru my company so cost is minimal. They are saving a large chunk of change by me working at home, that is their incentive. As for me, I am saving a large chunk of change also, a definite win win situation. And as for gas, I drive about as much in 2 weeks as I used to in 1 day, if that. Once companies look at these types of savings, along with no bad weather days missed, it is really in their best interest to encourage telecommuting if the work will not suffer.

[Pat Germain]

What really annoys me is how most communities are designed to prevent me from living near work. If I live in a typical, suburban development, there's a large ring of retail development I have to penetrate before I can get to where the businesses are. By setting up these layers of distance between homes and business parks, people are forced to drive longer distances and use lots of fuel.

I would love to live right next to an office park where I could walk to work or at least ride a bicycle. And believe me, I would do so. I hate having to drive everywhere I go. One of the reasons I like to vacation at Walt Disney World is there's so much free transportation, I don't have to drive. I can just board a bus, boat or monorail. That's the way our communities should be.

My capital city, Denver, built a light rail several years ago. Critics scoffed and said nobody would ride it other than homeless bums who would commute to neighborhoods and sleep on porches. Well, ridership was way beyond what anyone predicted from the beginning. It continued to get busier. The secret was this light rail actually connected the areas where people lived, like Highlands Ranch, to the areas where people worked, like the downtown tech center. Imagine that! Too many light rail systems just weave their way through downtown effectively going nowhere.

[Mike Henderson]

What really annoys me is how most communities are designed to prevent me from living near work. If I live in a typical, suburban development, there's a large ring of retail development I have to penetrate before I can get to where the businesses are. By setting up these layers of distance between homes and business parks, people are forced to drive longer distances and use lots of fuel.

I would love to live right next to an office park where I could walk to work or at least ride a bicycle. And believe me, I would do so. I hate having to drive everywhere I go.
It would be great to live very close to where you work. The problem in our society is that people change jobs fairly often (by choice or not). If you purchase a home, living close to work would require that you sell and buy a new home whenever you change jobs. Also, some people work in locations with extremely high housing costs and they just can't afford to live close to work.

Mike

[Joe Pelonio]

It would be great to live very close to where you work. The problem in our society is that people change jobs fairly often (by choice or not). If you purchase a home, living close to work would require that you sell and buy a new home whenever you change jobs. Also, some people work in locations with extremely high housing costs and they just can't afford to live close to work.

Mike
They have been trying to do that here, with "urban villages" that are really suburban. The problem is that people working at the retail space are making little more than minimum wage and cannot afford the homes at $400k. Those in the offices may make more but most have a spouse working elsewhere that still commutes, or they may prefer to live between the two job locations.

Typically the retail places in these villages do not provide enough revenue with just the immediate neighborhood customers, and cannot price compete with the the larger stores 4-5 miles away due to that and high rent on new construction.

[JohnT Fitzgerald]

why should folks that have money be able to buy their way out of their responsibility to conserve natural resources and ignore our national goal towards energy independence

This is a slippery slope IMO that rapidly degrades into a belief that people should be punished for being successful. One of my coworkers bought a Toyota Prius a few years ago when the tax credit (that's CREDIT - not deductable) was over $3K. However, because he had an AMT payment that year, he lost the ENTIRE credit. didn't matter how big the AMT payment was - anything over $.51 (since they round up to the dollar) meant a loss of over $3k. Apparently only people that are "well off" pay AMT, and therefore they don't need the credit.

Although AMT can be caused by 'success' (stock options, etc) there is a LARGE number of people that now need to pay AMT simply because they have deductions (state income taxes, property taxes, children, etc).

[Jim Becker]

John...I know that story very well. Got kids two-point-five years ago (adoption)...have been paying AMT since. SThe credit on my 2006 Highlander hybrid was wiped out, however, as you state. o I guess it wasn't so bad that Professor Dr. SWMBO's new Prius (replacing the 2002 that we did get the credit) didn't carry a tax credit since it would never show up anyway...LOL Of course, 'haven't gotten credit for the kids, either...

[Pat Germain]

Jim, your "credit" will come when your kids are beautiful, independent and well-adjusted young adults. :) But boy is it expensive getting there...

[Chris Padilla]

Jim, your "credit" will come when your kids are beautiful, independent and well-adjusted young adults. :) But boy is it expensive getting there...

My daughter is only 6 and already pocesses two of those attributes you listed... :p

[Jim Becker]

Same here for both of mine, Chris....we all have to survive puberty to find out if that other one makes it to the official check mark...:eek: :o Oh, and probably law school for the younger of my two. Oy!

[Chris Padilla]

I'm doing massive research to stave off this thing called puberty. It just mucks things up.... ;)

[Brian Elfert]

as for the 'commuting' part - there's an opportunity there. The local mass transit ("the T", in Boston) has seen a HUGE increase in ridership over the pasts couple of months. IMO they need to increase the infrastructure to make it more appealing. However, I live outside the city AND work outside the city, and even though I have a commuter rail station (train) in my town, there is absolutely ZERO pulic transportation other than into/out of Boston. so the message there is that unless you live or work in the city, you don't deserve public transportation. Does that make sense?

The issue with mass transit is the "mass" part. There have to be lots of people relatively close together all going to more or less the same places.

Typical mass transit in a large city collects less than 30% of costs through fares. Taxes pay the other 70%. Taxes would have to pay much more of the cost in outlying areas,

[Jon Crowley]

When I was a little weegun, Mom's drove "Station Wagons".
Big gas guzzling battle cruisers to get us around. For some folks the SUV is the modern day equivalent of the station wagon, sometimes you need a bigger vehicle.

"Station Wagon" is such an uncool name, and a fashion faux paux. :rolleyes: All the cool people have SUVs. I know, let's take an old station wagon design, put a lift kit on it, and call it a "crossover SUV". :p All of a sudden, it's cool again.

Seriously though, the main problem is supply/demand. People love to complain about gas prices, and I always ask if they are going to drive less as a result. The answer so far has always been no. :( Well, what's your breaking point then? $5/gal? $25? because that's what it will take.

In an odd way, I like seeing the high prices for these reasons. People need a wakeup call, and need to realize they are paying extremely low prices compared to other countries.

[Chris Padilla]

In an odd way, I like seeing the high prices for these reasons. People need a wakeup call, and need to realize they are paying extremely low prices compared to other countries.

Not odd at all in my eyes. I think America needs a swift kick and when they feel it in the pocketbook, they tend to take notice and usually do something about it. I hope they drive less, drive more fuel-efficient vehicles, take public transportation, reduce frivolous driving, walk, bike, etc.

[JohnT Fitzgerald]

I was under the impression that fuel is expensive in other countries because of the taxes involved - which go to infrastructure, health, etc. last I checked, NONE of these price increases are going to the government. So all this is doing is just being punitive.

[JohnT Fitzgerald]

The issue with mass transit is the "mass" part. There have to be lots of people relatively close together all going to more or less the same places.

Typical mass transit in a large city collects less than 30% of costs through fares. Taxes pay the other 70%. Taxes would have to pay much more of the cost in outlying areas,


Sorta the point I was trying to make. I understand the economics of it. I know I live in the 'burbs, and have limited options when it comes to mass transit. If I worked in the city, I'd definitely use the train. But I do not want to be labeled the 'bad guy' - I play plenty enough in taxes to subsidize the mass transit system.

[Lee DeRaud]

...reduce frivolous driving...Kinda takes the fun out of that M5 I'm saving up for, doesn't it?:cool:

[JohnT Fitzgerald]

Kinda takes the fun out of that M5 I'm saving up for, doesn't it?:cool:

oh no....now we're going to have issues with vehicle selection.

what does everyone drive? I have a GMC Acadia. (Yes, an SUV. and yes, necessary with 3 kids 2 big dogs and the stuff I have to haul around).

[Greg Peterson]

last I checked, NONE of these price increases are going to the government. So all this is doing is just being punitive.

Free market. Oil companies will charge what the market bares.

[Dennis Peacock]

It just mucks things up.... ;)

No ain't THAT the truth..!!!!!!!

[Jeffrey Makiel]

According to CNN today, Chavez is looking to mix it up with Columbia. The US is talking about sactions against Venezualian oil. Imagine what will happen to the price of oil if this happens.

Just to re-hash my earlier post many pages ago, there is plenty of low hanging fruit to pick when it come to conservation without reliance on just long term development of technology. These are called 'administrative' controls, which have been very successful in the past in the environmental area, and they can be implemented very quickly if desired.

Years ago, I think folks were more collective in dealing with national issues. There was a more of a sense of "we" versus "I". An example was rationing during World War II to support the war effort. I can't imagine this happening today even as we have troops fighting in Iraq.

In general, it seems we now measure everything by money and only respond if we personally feel a tug on our wallets. This reactive thinking is probably what the oil industry is counting on as to make those short term whopping gains. Our lack of a comprehensive energy policy for nearly 15 years is proof.

-Jeff :)

[Joe Chritz]

Kinda takes the fun out of that M5 I'm saving up for, doesn't it?:cool:

M5 or MP5?

I know which one I would rather have.

FWIW, I have only test driven one of them.

Joe

[Lee DeRaud]

M5 or MP5?Well, they're both anti-social and expensive to feed, but since I'm in California, I'll have to settle for the one with the wheels.:cool:

[Steven Hardy]

I heard the same thing (that refineries are running well under capacity). This is a curiosity: one would expect that lower demand would translate into lower fuel prices at the pump. The first thing that comes to mind is that prices are being “manipulated” by the refiners through contrived supply restrictions (i.e., below-capacity production). It seems, though, that this is not the case. All the data I have seen is that refiner profit margins through the first quarter of 2008 are 35% LESS than they were for the same quarter in 2007. If there is some kind of hanky-pank going on, the people behind it are pretty inept, I’d say.

Agreed ,and most of our leaders dont seem to have a clue that competition is non-existant since the mobil-exxon formation.Should the government take a hands off approach to free enterprise??? No-way. The bulk of oil shale deposits AND most of the remaining reserves are on FEDERAL-LANDS or coastline . These resources belong first and foremost to the AMERICAN people. Profits should absolutely be regulated as in Utilities.

[Steven Hardy]

I personally do not see anything wrong with a corporation making profits, record or otherwise. Heck, I wish I owned a lot of Exxon stock.

As much as I hate high gas prices, and as tempting as it is to blame US oil companies, I haven't seen any credible evidence backing up all the conspiracy theories I hear so much about. Oil prices are high worldwide and all oil companies are reaping huge profits. That's economics.

Furthermore, I think it's ridiculous for Congress to berate Exxon for not investing more money in alternative energy research. Hello, they're an oil company, for crying out loud. Why should they invest in developing products in direct competition with their primary product? PETA might as well ask cattle ranchers to invest in developing a meat substitute.

I don't think temporarily eliminating the federal gas tax will benefit consumers. However, as Glen Beck suggests, drilling through caribou heads in the Arctic and sucking more oil from the ground might. (I don't necessarily support this idea. I just think it might help consumers.)

I agree its silly...but they were given 18 billion in tax breaks to do so.
We have decades of non-oil reserves in the form of oil shale (kerogen)
The development of processes to refine have been mediocre (dollar wise)
http://en.wikipedia.org/wiki/Oil_shale_reserves
We should already be where Canada is.....(our largest supplier ,thanks to oil sand processing)

[Greg Funk]

These resources belong first and foremost to the AMERICAN people. Profits should absolutely be regulated as in Utilities.
But the oil business is entirely different than the utility business. It is capital intensive and high risk. Oil companies are making money now but it is a cyclical business. Without the potential for large profits there wouldn't be any exploration for new oil.

Whoever owns the oil is free to set the royalty rates at a level competitive with other oil reserves.

Greg

[Mike Henderson]

Years ago, I think folks were more collective in dealing with national issues. There was a more of a sense of "we" versus "I". An example was rationing during World War II to support the war effort. I can't imagine this happening today even as we have troops fighting in Iraq.
-Jeff :)
WWII was a whole different situation. A major part of the world was at war. Essentially all able bodied men were in the military (except for critical skills jobs) and the entire economy was harnesed to the war machine. And eveyone agreed the war was the right thing to do.

Different war - You may not remember, but during the peak two years of the Vietnam war we averaged about 1,000 KIA per MONTH. Can you imagine 1,000 killed per month today?

Different time, different war.

Mike

[Greg Peterson]

The dollar is a poor measure of value.

Unlike WWII, in WWIII there won't be any allies. It will be every nation for themself. The fight for oil is in its infancy. Five years or a hundred years of oil, doesn't matter. It's a finite resource and unless a comprehensive approach is developed to relieve our dependence on this limited resource, we're going to be knee deep in the war to end all wars.

Hope I'm wrong, but I doubt it. We're living at an unsustainable rate. If anything, as Thomas Friedman has espoused, the gas tax should be raised.

[Butch Edwards]

While I did not read all 80+ posts this is my .02.

Some low mileage vehicles are required. When someone makes a 40 MPG truck to haul sheet goods, lumber, horse trailers and the like I will buy one.

On gas prices. It seems a standard business decision. When people stop paying $3.50 a gallon they will stop charging it.

Joe

I'm with ya on the 1st part...but you're waaaay off on the 2nd... with other developing nations bidding on crude(driving up the price) whether you stop buying or not, the cost will still go up. the other countries(China/India..for example) have the $$ to support those fuel costs,we do not. our debt prohibits(or will,shortly)the continued practice of "keep-up" with those bidders. OPEC has already stated they will NOT increase production, (....and BTW, their reserves are getting thinner every day!!)
fuel costs will continue to skyrocket in the years ahead, causing THIS nation to be diligent in finging other way to operate vehicles(hydrogen/electric/etc).. look for Gasoline to go over $5/gal by christmas next year,if not sooner. Diesel is nearly that now. what's pathetic about it, is the mass profits the oil co.s are making off the crisis. but such is supply/demand...

[Jeffrey Makiel]

WWII was a whole different situation. A major part of the world was at war. Essentially all able bodied men were in the military (except for critical skills jobs) and the entire economy was harnesed to the war machine. And eveyone agreed the war was the right thing to do.

Different war - You may not remember, but during the peak two years of the Vietnam war we averaged about 1,000 KIA per MONTH. Can you imagine 1,000 killed per month today?

Different time, different war.

Mike


With total casualties now nearing 30,000, and no end in sight, I agree with Greg that oil wars are in their infancy and I also believe that we shall surpass WWII both in terms of treasure and life as the world continues to depend on this region. If it's not Iraq, then it's Iran, Kuwait, Saudi Arabia, etc. It's just a slower cancer.

And then there's the goal in this region to develop nuclear, chemical and biological mass destruction capability which should have the entire world shaking worse than during WWII.

As far as our society not aligning its economy to the war, I agree, we are not. Instead, we are using credit to pay for the war which has placed every American household about $5,000 in debt. Back in the old days, it was a 'cash on the barrel head' society. Now we fumble with gas tax holidays because we're feeling the pinch.

Different time, same war, different attitude.

[Bill Lantry]

But the oil business is entirely different than the utility business. It is capital intensive and high risk. Oil companies are making money now but it is a cyclical business.

Greg

Um, I hate to ask, but when was the last quarter when exxon actually *lost* money? ;)

Industries are always making up reasons for why they're special. The fact they feel they have to make things up should tell us something... ;)

Thanks,

Bill

[Greg Funk]

Um, I hate to ask, but when was the last quarter when exxon actually *lost* money? ;)

Industries are always making up reasons for why they're special. The fact they feel they have to make things up should tell us something... ;)

Thanks,

Bill
If you compare Exxon's performance to other large companies I think you'll find that they really aren't special. Since 1975 their performance has been similar or below Coca Cola, GE and the NASDAQ index. Exxon attracts attention primarily because they are the biggest.

Greg

[Greg Peterson]

Oil is a costly commodity, in terms of treasury and life.

At this time there does not exist a single, direct replacement. However, as oil prices continue to rise, other options become economically competitive.

It seems as if after the Apollo program, our nation said, "That's good enough". Since then. we've been riding on the coat tails of generations that knew the value of shared commitment and shared rewards. That attitude made this nation the greatest, most powerful and envied nation in the history of the world. The tragedy of our fall from this high perch has been surpassed by the sheer speed by which we have plumbed depths unimagined forty years ago.

There are no simple, painless solutions. The are bad choices and then there are worse choices. Unless we are able to refocus our attention on long term goals, the debate will always be mired in the current or next quarter. This season, we're debating the merits of a eighteen cent gas tax cut. Next season/quarter, we'll be debating heating oil. The following season/quarter we'll be debating the next bandaid on the horizon.

We need a comprehensive, long term program to develop energy dependence. A program in scope that dwarfs the Apollo program. And by energy independence, I'm referring to the micro versus macro. I'm talking about turning ones own home into an independent energy plant. In the sixties, we aimed for the moon with little idea of whether it could be accomplished. We aimed and worked toward that goal none the less. Today, energy technologies that could make families energy dependent are closer to being reality than our will to think differently about the status quo.

Currency is a poor measure of value. If everything were calculated on ROI, there would be no Brooklyn Bridge, Panama Canal, Great Wall of China, man on the moon and so on.

Gas tax holiday? Bread crumbs to distract us from the big picture.

[Michael Morgan]

I may drive big vehicles but I am doing my part:D Switched over to all wood heat, I built my house about 10 years ago and have used oil heat up until now. I have a 1000 gallon oil tank that cost me $850.00 to fill the first time. Now it would be about 4k by next winter it maybe 5K or more. The only fuel I will use for heat next winter will be gas for my four wheeler to pull wagon loads to the house. This is about half of the wood I have ready for next year.