Thursday, April 27, 2006

It's about time I got angry enough to blog: oil

I've been unusually complacent over the past month and less witty. I thought I might be too old for this shit. I've even been seen gallavanting with conservatives. But after awhile, even I can't remain completely stone-faced. Though there are a number of issues I would like to talk about, oil and gasoline trump all this point.

Gas prices and oil prices are pretty much at the highest they've ever been right now and I'm betting they'll get close to $4 by the end of summer. Every day I hear people bitching about it on the radio. Why doesn't the government do something to keep prices lower? Can't they fix the prices? Why don't they force the oil companies to produce more? Boo hoo. I want more gas so I can drive myself across the street to my neighbor's house and rev the engine for 10 minutes.

Why doesn't anyone understand simple economics? If demand goes up, price goes up. If demand goes down, price goes down. If supply goes up, price goes down. If supply goes down, price goes up. Very simple. The major oil producing countries are pretty much at full capacity, so supply is fixed. That leaves demand. If everyone would follow the following tips, it would have a positive impact on both personal spending and aggregate demand.

1. DON'T squeal your tires when the light turns green. It reminds me how much more powerful your car is (i.e. how much bigger your penis is) than mine.
2. DON'T run the car's air conditioner when it's already cold outside. Lose some weight instead.
3. DON'T take the SUV out of the garage, except for the purpose of pimping.
4. DON'T cut me off, or I will run you off the road.
5. DO car pool, with sexy results.
6. DO drive a hybrid, because it helps my family's business.

Speaking of hybrids, I've been hearing a lot of people trashing them lately, saying they don't make sense for the individual. Just to clarify this situation, hybrids cost about $3000 more than the non-hybrid version. Full hybrids (e.g. Toyota Prius) improve gas mileage by at least 25%. Assume a normal commuter spends $60/week on gasoline, so we'll assume the hybrid saves you $15/week. In under 4 years, you've got your money back. And, if you take into account the rate of gasoline price increases over the past couple years, it could be much less than that. Not to mention, you're saving the environment with reduced emissions, reducing the demand (and price) of gasoline, and you'll be the envy of hippies everywhere.

Before I forget, I should mention the news that angered me enough to write. Congress is proposing a $100 tax refund to help offset your higher gas costs. 100 dollars? Hot damn, I'll take it. Wait a second... what's the catch? Oh yeah, the fine print is that they get to start exploring the Arctic National Wildlife Refuge in Alaska. Bastards! I just got hooked up with a really sweet seal clubbing job up there. No one will be impressed with my skills when the seals are already dead and covered in oil. Well, maybe they have a point. Bill Frist supports it, and he taught me I could get AIDS from tears and sweat.

Final note: I'm going to be driving to U of I like hell tomorrow and alone, hopefully at about 100mph. But I have a good reason. Much better than yours. So stay home, watch a movie, and save gas.

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ME

1 Comments:

Anonymous Anonymous said...

Well, first off you broke a golden rule of economics: end every sentence in ceteris paribus. That way you can claim to have considered the compounding effects of a market disturbance but merely failed to mention such effects due to time constraints.

Second, I find your argument about the Prius faulty for a few reasons. I take issue with your consideration of the increasing cost of gas over four years (=more savings) and convenient failure to consider something ohh so important. Along with breaking the aforementioned golden rule of econ, you have now committed a cardinal sin of econ by failing to consider the OPPORTUNITY COST. Even at 5% you still have another $650 for which to account. Nonetheless, if we assume that the performance and durability of the Hybrid Prius are comparable to our next best option AND it lasts a long enough for the gas savings to catch up to the initial cost, then perhaps it is worth it. But then we also have to consider the initial assumptions, as the 25% gas savings figure has recently been called into question.

Anyway, I was already convinced about Hybrids before I read your blog. I'm just trying to maintain my reputation as an argumentative asshole. So long as the monetary cost-benefit ratio is close (or under) one, it's a no-brainer. The non-monetary benefits far exceed the costs (are there any?). I would by one if I had enough money just to impress my future hippie neighbors in Eugene.

(PS Apply ceteris paribus principle to all preceding statements related to economics.)

Are we still going to La Mex tomorrow?

3:41 PM  

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