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The Propaganda of Gas Prices and other consumer follies

By
Home Builder with ODaniel Homes

  Well now, I mean exactly to get off on a rant here, so I will.  It occurred to me over the weekend following a statement my father-in-law spewed forth.

  As we passed a gas station he said "hmmph, gas is $3.49 a gallon now.  Oh well, I guess they told us gas would be $4.00 a gallon by summer.  I guess they were right."

  How profound I thought.  The federal government and its economists and the economists of Wall Street and the economists of the gas companies SOLD the American public the idea that gas would be $4.00 by summer.  And, they SOLD the idea to us all knowing how little we'd bitch about it because hey, didn't we all expect it anyway?  And besides, what can we really DO about it?

 Here's an idea.... We all trade in our gas guzzling SUV's and buy new, luxurious, economy cars thereby creating the next boom in vehicle sales while deteriorating the trade-in values of the used SUV's which creates a lock-in market for the financing companies of both used and new vehicles.  EVERYBODY.....the gas producer, the car sales people, the dealership, the manufacturer, the insurance agents, the government through sales and use taxes, and even the trader on the floor of Wall Street makes an absolute killing on rising oil prices.  Yea TEAM!  We've sold it to the American people, we'll make it and they'll pay for it all!

That surely was what they where all thinking.  At least, as an economist of sorts myself, it makes sense to me they'd think that....not that even one would admit it but that is basically the underlying way it ultimately works.  It happened exactly that way in the early 70's.  It happened that way for certain in the mid 80's.  It'll happen again now if no one does anything about it.  If your first question to me is "well, what are you going to do about it?" My first answer is this:    I have a 7 mpg dually truck that I'm going to sell and lose one payment my business pays right there.  I have another truck that I don't really need that averages 15 mpg.  I'm selling it too and I'll lose another payment there.  I'll not be helping out the finance companies, the car maker, and certainly I'll not help out the gas company anymore.  I'm tired of getting the shaft.  When gas prices become reasonable again and they will, then maybe and only maybe I'll buy a reasonably priced used truck or car.  For now, I'm going to drive a nice vehicle that I ordered in 1994 and still have today which gets 24 mpg.  To hell with the bigwigs and their high prices.  I'm not playing anymore.  So.... What are you going to do?

  That's my musing for the day, albeit entirely serious also.  Anyone need a truck?  I have two for sale.  Tune in the coming days..... I have a thought on what would happen if all of the workers in the U.S. making less than $10.00 per hour decided to not work for a month........ should be good. 

Associate Broker Falmouth MA Cape Cod Heath Coker
https://teamcoker.robertpaul.com - Falmouth, MA
Heath Coker Berkshire Hathaway HS Robert Paul Prop
There was a good post a day or two ago about gas buying tips (by glenn lavery).
Apr 23, 2008 09:53 AM
Katie Graham
Cherry Creek Properties, LLC - Denver, CO
Denver Real Estate
I hate to poke a hole in your theory, but there is no entity or organized group that sets the gas prices. Prices are determined by the world oil market. $4 / gallon gas was a prediction, not a statement that gas will be somehow set at that level. Conspiracies give easy answers to complicated questions, but they're the wrong answers. 
Apr 23, 2008 10:23 AM
Clay O'Daniel
ODaniel Homes - Fairhope, AL
I'm not really much of a conspiracy theorist.  Being one with an extensive education in Economics, I know and understand who sets the oil prices and how the oil prices are set.  However, if you look back at the two previously mentioned periods of exorbitant fuel prices, you will find history indicates the trends mentioned did occur.
Apr 23, 2008 08:18 PM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

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