New at Reason

David Weigel | April 25, 2006

Gasoline panic, fear of Hispanics, and MySpace's popularity goes volcanic... in the new Reason Express.

Comments

|4.25.06 @ 9:10AM|#

Wouldn't it be collusion and not price gouging if all of the companies are charging the same high price?

|4.25.06 @ 9:24AM|#

That's the beauty of it, it's both! They're colluding to gouge everyone!

The whole thing is like one of the reason writers said a while back about Maryland's law regarding gas prices (I think). Paraphrasing:

Don't charge more than your competition, or you're price gouging. But don't try to charge less than your competition, because then you're dumping. Oh, and don't try to charge the same amount as your competition, because that's collusion.

|4.25.06 @ 9:34AM|#

Highway:

That was actually an old joke:

Three guys are in a jail cell. They start to talking and find out that they're all gas station owners.

The first one says, "I set my prices at a couple of cents higher than my competitors. I'm in here for price-gouging."

The second one says "I set my prices at a couple of cents lower than my competitors. I'm in here for predatory practices."

The third one says "I set my prices at the same price as my competitors. I'm in here for collusion!"

|4.25.06 @ 9:41AM|#

There was nothing even remotely related to "fear of Hispanics" in that piece. Prejudice may be one factor in play in the debates surrounding immigration issues, but it is not the only one.

It was shoddy and dishonest when you threw around the race card during the Dubai Ports debate, and it's shoddy and dishonest now. And I say that as someone whose views on immigration match up pretty closely with those of the Reason editors.

|4.25.06 @ 9:44AM|#

Gasoline panic isn't hard to understand if you consider the way American cities are organized. We're mostly sububanites, and we don't have well-developed public transportation systems. We rely on our cars. Europe is a different story, and high gas prices there don't translate into the hardship they do here. So whether one thinks the gas companies are unfairly gouging or it's just the way the market works is beside the point. The point is that high gas prices are going to mean a lower standard of living over the long run. Anybody who thinks gas prices will come down over the long run hasn't noticed China.

|4.25.06 @ 10:14AM|#

The more interesting question is the extent to which telecommuting becomes an option for more workers if gas hurtles toward $4 a gallon. Another good question � which purely optional expenses consumers will cut back on in response to the gas prices.

Another good question is how many jobs will be lost if enough people cut back on optional expenses to pay for gas, and how bad of a domino effect this could have on the economy.

|4.25.06 @ 10:21AM|#

Another good question is how many jobs will be lost if enough people cut back on optional expenses to pay for gas, and how bad of a domino effect this could have on the economy.

How much of the scarce oil is used for gas versus how much is used for other things (eg, manufacturing?

|4.25.06 @ 10:26AM|#

Transportation uses approximately half of the energy the United States uses, and about 2/3 of the petroleum. Auttomobiles account for the vast majority of this consumption - somewhere over 90%.

|4.25.06 @ 10:28AM|#

I don't know, I Don't Know, but that certainly adds to the problem. A huge chunk of our economy is based on (relatively) cheap oil and gas, and once that gets too expensive there will be all sorts of fallout from it.

We'll see what happens when it happens, I suppose.

Ron Hardin|4.25.06 @ 10:59AM|#

You can get energy from the domino effect, in fact.

It's not hard to imagine an engine that topples dominos, which presumably would be set up again at night using electrical power.

You can't climb a hill higher than half a domino, is the only downside I see, unless there's a breakthrough in physics I don't see offhand.

Perhaps something could be done with earth rotation and a system of levers to wedge yourself higher.

There's the dunking bird engine in the wings, as well.

Another approach is drafting bicyclists.

|4.25.06 @ 11:37AM|#

What's the libertarian position on government intervention to break up monopolies to ensure competition?

R C Dean|4.25.06 @ 12:04PM|#

What's the libertarian position on government intervention to break up monopolies to ensure competition?

That it is not necessary.

There has never been a monopoly that wasn't a creature of government in the first place. In a halfway functional marketplace, one devoid of artificial barriers to entry manned by government functionaries, a monopoly simply cannot long survive.

Never has, never will.

As far as I know, monopolies arise only in markets made dysfunctional by government interference.

|4.25.06 @ 12:12PM|#

I'm not convinced that monopolies require the support of the state, but many monopolists do seem to have had friends in high places. My approach would be to first cut off the favors from high places, then see if anything else should be done.

Weren't some of the first Sherman Act cases against labor unions? I vaguely recall learning that in a class a long time ago, but it's been a long time. I could be wrong.

|4.25.06 @ 12:41PM|#

OK, so let me get this straight? Oil has hit its peak production, we get oil from unstable areas of the world, our refining capacity was damaged in Katrina, and China and developing nations are using more and more oil... all of which means less supply.

And at the same time, demand is as high as ever in the U.S., people refuse to take mass transit, people refuse to buy smaller more fuel efficient cars.

So we have diminishing supply, and increasing demand. Conventional economics would say that price would go up.

But the economics practiced by the government says that if we just punish and discourage oil producers, and meanwhile keep prices low to keep demand up, everything will be OK. So the plan that Republicans and Democrats support, is to lower supply, while at the same time encouraging demand. Brilliant... fucking brilliant! Wasn't Bush and the Republicans supposed to be at least slightly free-market? They are now at the point of practicing Soviet style economics.

The sad thing is that there are people in this forum that actually think the decrease supply / encourage demand system isn't going to make everything worse.

|4.25.06 @ 1:04PM|#

What's the libertarian position on government intervention to break up monopolies to ensure competition?

Joe, I always love your posts and let you ignore me without complaint felt or expressed, but now you stoop to stealing my best meme. The only other 2 I got are transparency and military overkill. Antitrust was my chinscratcher meme, the profoundest one in the bunch. You can always think of new ideas, but I am told to think up new ones!

|4.25.06 @ 1:04PM|#

The gas situation demonstrates anything but collusion & monopoly power. Prices are all over the place precisely because they are constantly reacting to competitive pressures. If there was collusion, the price would be $3.99/gal day in & day out & everybody would be fine with it. And we'd all feel nice & comfortable with our stable supply of gas. If costs bumped up & down a bit, the oil companies would keep it at a nice comfortable $3.99 as long as they could so we'd all be perfectly happy with their high, stable price. In fact, in most industries, this is much more the case, since competitive pressures aren't so severe. Suppliers keep prices steady until changes in costs become clearly permanent, then they change them. When I buy plastic for my business (a petroleum product), I pay the same price every day until the supplier comes out with next year's catalogue. Because they have higher margins & don't have to react daily to competitive pressures. There is competition, but not to such an immediate degree.

So, as usual, the public reaction is a good indicator of exactly the opposite of what is really happening. IMHO.

|4.25.06 @ 1:06PM|#

should be --too old--, not "told"

The Wine Commonsewer|4.25.06 @ 1:08PM|#

Thanks RC, my favorite non-monopoly example was when Roosevelt I broke up the sugar trust even as sugar prices were at an all time low and had been falling for a decade. In our modern era the government ensures monopolistic-like sugar prices by using tarriffs, laws, supports, and what have you to artificially keep US sugar prices way above the world market price. Nice Touch.

|4.25.06 @ 1:10PM|#

Boy,

That wasn't me.

A namestealer seems to have appeared.

And on exactly the same day that I called John on phoney email address.

Sandy|4.25.06 @ 1:25PM|#

joe--

How do you explain the different reaction to DPW owning the contracts as opposed to a British company? It smacked to me very much of an inability to distinguish the sultan of Dubai from Osama bin Laden, which is pretty much the definition of racism.

|4.25.06 @ 1:38PM|#

To whoever is posting under the name "joe":

That name (with that capitalization) is reserved for a guy named "joe" who is an urban planner in New England. (Yes, yes, I know, urban planning is evil, yadda yadda, but we love him anyway.)

Kindly change your handle, either by capitalizing, using a longer version of the name, tacking on an initial, or adding some cute comment to it (e.g. "the joe who doesn't do zoning").

Thank you.

|4.25.06 @ 1:38PM|#

Sandy,

I have faith in your intelligence. I am completely confidenct that, if you think really, really hard, you can probably come up with some differences between the British government (and their relationship to the US) and the UAE government (and their relationship to the US) - that are relevant to the question of whether it's a good idea to trust them with a function that is highly important for our security.

Larry A|4.25.06 @ 1:51PM|#

Anyone know where there's a gasoline pie chart? One that shows where each penny of the $3 goes.

Lay odds the biggest wedge will be taxes, not profits.

|4.25.06 @ 2:17PM|#

Larry A

Not exactly pie charts, but:

http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/primer_on_gasoline_prices/html/petbro.html

http://www.energy.ca.gov/gasoline/margins/index.html

|4.25.06 @ 2:26PM|#

Sandy,

To be less pissy, I think that a government based on liberal, democratic values - such as those currently in place in Great Britain, Canada, or Japan - and which has a long history as a close ally - again, such as Great Britain, Canada, or Japan - can be trusted with security-sensitive operations more than governments that lack either feature, such as the UAE, Russia, or China.

|4.25.06 @ 2:32PM|#

Hmmm, joe, how 'bout security-sensitive operations like docking and maintaining US Navy ships. That sounds about as security-sensitive as you get.

http://www.whitehouse.gov/news/releases/2006/02/20060222-10.html

|4.25.06 @ 3:02PM|#

Nobody wants to talk about the excrescence that is MySpace? It's all gas, gas, gas around here :)

|4.25.06 @ 3:08PM|#

Isaac,

I think it is appropriate for military personnel and equipment on active duty to be put in less-secure conditions than we insist upon for our own territory. In fact, I think that's rather the point of having a military.

|4.25.06 @ 3:11PM|#

BTW, Sandy, you'll let me know why my greater trust in liberal, democratic government that are reliable allies and my belief that it is acceptable for overseas military to face greater risks than civlians on our own territory are both manifestations of racism, right?

keith|4.25.06 @ 4:09PM|#

I remember back in the 70s there was a cartoon in Mad magazine of their proposed vehicle to help solve the energy crisis: it was a backpack full of marbles. A large funnel spills the marbles out in front of you, and you skate along on them, while a large scoop behind you catches the used marbles and returns them to the backpack.

I'm not saying there aren't a few details that need to be ironed out, but I don't see how Mad magazine's solution is any less feasible than most of what's bandied about in "serious" debate these days.

|4.25.06 @ 4:25PM|#

I'll buy that, joe. And I certainly agree with your notion that our best allies would be liberal, democratic governments, but sometimes we have to settle for less. I don't like it but there are a great many things I don't like that I have to accept in the real world.