Creeping up to $4 Gas

[osu99jp]

Ted Rall's solution:

06/26/2008

THE CURE FOR HIGH GAS AND FOOD PRICES

Vital Businesses Need Nationalization
SAN ANTONIO--The gas station attendant came outside. Wow, I thought, full serve! Ignoring me, she flung a magnetic price decal on top of the price per gallon. Regular unleaded had gone up 20 cents in the time it took me to drive from the curb to the pump.

"You're kidding me," I moaned.

"It's 3 o'clock," she shrugged. "Just got the new price."

There has to be a better way, I thought.

And there is.

It isn't drilling in the Alaskan wilderness. It sure isn't John McCain's plan to offer $300 million to the first person to come up with a longer-lasting car battery

Gas prices could hit $7 a gallon before long, Wall Street analysts say, but Americans--always optimists!--take a little comfort in the fact that Europeans have paid more than that for years. But a lot of foreigners are laughing at us even harder than we're laughing at the Euros.

Did you know that Venezuelans pay a mere 19 cents per gallon? It's 38 cents in Nigeria. Turkmenistanis might not have electoral democracy, but they only shell out $4.50 to fill a 15-gallon tank. Before we replaced Saddam Hussein with...with whatever they have in Iraq now, Iraqis paid less than a dime for a gallon of gas.

One of the things that these countries have in common, of course, is that they're oil-producing states. Countries that export oil and gas have trouble explaining to their citizens why they should pay for their own natural resources--and most are smart enough not to try. Iran, Saudi Arabia, Egypt, Burma, Malaysia, Kuwait, China and South Korea are just a few of the countries that keep fuel prices low in order to stimulate economic growth.

But they also share something else: common sense. Strange it might sound to Americans used to reading about big oil windfalls, they consider cheap gas more of an economic necessity than lining the pockets of energy company CEOs. So they don't consider energy a profit center. To the contrary; government subsidies (Venezuela spends $2 billion a year on fuel subsidies) and nationalized oil companies keep gas prices low.
Unlike corporations, governments don't care about turning a profit. They care about remaining in power. Their reliance on political support (or, if you're cynical, pandering) allows them to do things our much-vaunted free market system can't, such as make sure that people can afford to eat and buy enough gas to get to work.

Like the rest of the world, Venezuelan consumers have been squeezed by rising prices, and even shortages, of groceries. In 2007 Venezuela's socialist-leaning government decided to do something about it. First they imposed price controls on staple items. When suppliers began to hoard supplies to drive up prices, President Hugo Chavez threatened to nationalize them. "If they remain committed to violating the interests of the people, the constitution, the laws, I'm going to take the food storage units, corner stores, supermarkets and nationalize them," he said. Food profiteers grumbled. Then they straightened up.

Not even international corporations are immune from Chavez's determination to put the needs of ordinary Venezuelans ahead of the for-profit food industry. Faced with severe shortages of milk earlier this year, Chavez threatened Nestle and Parmalat's Venezuelan operations with nationalization unless they opened the spigot. "This government needs to tighten the screws," he said in February 2008, promising to "intervene and nationalize the plants" belonging to the two transnational corporations.

Miraculously, milk is turning up on the shelves.

When it works, nothing is better at creating an endless variety of reality TV shows than free market capitalism. But when it doesn't, it isn't just that extra brand of clear dishwashing liquid that goes away. Businesses fold. Banks foreclose. People starve. And no one can stop it.

The G8 nations met in Osaka last week to try to address soaring food and energy prices--a double threat that could plunge the global economy into a ruinous depression. But the summit ended in failure. "Any hope that the G8 meeting would result in coordinated monetary action--or concerted intervention in foreign exchange markets--to counter rises, principally in commodity prices, was dispelled by their failure to agree on the phenomenon's underlying causes," reported Forbes.

So the G8 ministers punted. "Due to the lack of consensus, they have stated the need for further study," wrote the magazine.

The problem isn't the weak dollar or the non-existent housing market. It's capitalism. A sane government doesn't leave essential goods and services--food, fuel, housing, healthcare, transportation, education--to the vicissitudes of "magic" markets. Non-discretionary economic sectors should be strictly controlled by--indeed, owned by--the government.

Consider, on the one hand, snail mail and public education. The Postal Service and public schools both have their flaws. But what if they were privatized? It would cost a lot more than 42 cents to mail a letter from Tampa to Maui. And poor children wouldn't get an education.

Privatization, particularly of essential services, has always proven disastrous. From California's Enron-driven rotating blackouts to for-profit healthcare that has left 47 million Americans uninsured to predatory lenders pimping the housing bubble to Blackwater's atrocities in Iraq, market-based corporations' fiduciary obligation to maximize profits that is inherently incompatible with a stable economy whose goal is to provide people with a decent quality of life.

P.S. If you're reading this in Caracas, please mail me some gas.

[millslite]

Originally Posted by osu99jp

Ted Rall's solution: The problem isn't the weak dollar or the non-existent housing market. It's capitalism. A sane government doesn't leave essential goods and services--food, fuel, housing, healthcare, transportation, education--to the vicissitudes of "magic" markets. Non-discretionary economic sectors should be strictly controlled by--indeed, owned by--the government.

Yeah, Ted Rall is pretty much a "whack job" piece of crap.

[osu99jp]

Originally Posted by millslite

Yeah, Ted Rall is pretty much a "whack job" piece of crap.

Hehe, we are pretty much in agreement. He is still somebody that I read weekly. I enjoy reading the crazies from both sides.

[millslite]

Originally Posted by osu99jp

Hehe, we are pretty much in agreement. He is still somebody that I read weekly. I enjoy reading the crazies from both sides.

His editorial "cartoons" have bordered on racism (portraying Condi Rice as someone who sleeps around with international figures) and he has also equated our troops with suicide bombers. He is hardly someone I would want to pay any attention to.

[PokerDude]

i find it humerous that all the whack jobs in congress that "pledge to do more in 100 hours than the republican congress did in its' last term" are the same ones that cannot pass...or DON'T WANT TO PASS a price gouging bill in the oil industry. They honestly don't think it is occuring?

I just find it....like I find every whack job....110% hypocritical and numb to common sense and reality. Oil gas down...gas goes high....oil goes down....gas stays the same.

[White Magic]

My god people... If you think that the oil companies are price gouging you're either uniformed or just plain stupid. They aren't. Yes, the profits they make seem large and obscene, but are they large and obscene relative to the investment the oil companies make to bring us gasoline? No.

Obama and McCain Spout Economic Nonsense - WSJ.com

In Raleigh, N.C., last week, Sen. Obama promised, "I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills."

Set aside for a minute that Jimmy Carter passed a "windfall profits tax" to devastating effect, putting American oil companies at a competitive disadvantage to foreign competitors, virtually ending domestic energy exploration, and making the U.S. more dependent on foreign sources of oil and gas.

Instead ask this: Why should we stop with oil companies? They make about 8.3 cents in gross profit per dollar of sales. Why doesn't Mr. Obama slap a windfall profits tax on sectors of the economy that have fatter margins? Electronics make 14.5 cents per dollar and computer equipment makers take in 13.7 cents per dollar, according to the Census Bureau. Microsoft's margin is 27.5 cents per dollar of sales. Call out Mr. Obama's Windfall Profits Police!

It's not the profit margin, but the total number of dollars earned that is the problem, Mr. Obama might say. But if that were the case, why isn't he targeting other industries? Oil and gas companies made $86.5 billion in profits last year. At the same time, the financial services industry took in $498.5 billion in profits, the retail industry walked away with $137.5 billion, and information technology companies made off with $103.4 billion. What kind of special outrage does Mr. Obama have for these companies?

Read the whole thing if you have time. The author is a renowned genius.

[Franny]

My god people... If you think that the oil companies are price gouging you're either uniformed or just plain stupid. They aren't. Yes, the profits they make seem large and obscene, but are they large and obscene relative to the investment the oil companies make to bring us gasoline? No.

Don't lump everyone in with one person who made that crazy statement (pokerdewd)

:-)

[bearcat428]

the most significant reason oil costs what it does is the weak dollar. i wish i could remember the exact numbers, but basicly if the dollar was worth today what it was 8-10 years ago, oil would be half what it is.

that ted rall, who i've never heard of, is an idiot. i didn't see him mention the low cost of gas in the countries he mentioned is because it's subsidized. don't be mistaken though, the dems have mentioned nationalizing the oil companies on the floor of congress! currently the oil companies operate at 9-10% profit. if those companies were nationalized, their inefficiencies would exceed that savings. the govt is making more a gallon than the oil companies, maybe obama should look at that.

by the way, it's oil companies that drill and refine turning a profit. right now those who only refine are losing money.

drill here, drill now, save.

[White Magic]

Alright Franny... but I'll have to take you to task over your comments earlier in this thread.

I don't think you'll see more business opening up in downtown centers. You'll see a flood of businesses just being virtualized with everyone working from their own home through broadband. Basically company-wide full time telecommuting. Or basically businesses that consist of one dude firing off orders through Instant Messenger to a bunch of people in India.

This is an absurd prediction. Leave it to a network administrator to envision a world where network administrators give us the solution to high gas prices.

People still have to live their lives irrespective of their work situation. If gas prices are high, you may be able to telecommute but you can't get groceries through a broadband connection. You can't get to a restaurant or a bar that way either. In a world where even a 5 minute jaunt up the road to Kroger becomes costlier than many people are comfortable with, a residence within walking distance of certain amenities becomes more attractive.

Two other things:

1) Why would my employer virtualize its business on my account? How I get to work or how much it costs me really isn't their problem. Until we reach a point where employees are totally unwilling to commute any distance, across the board, I don't see "making employees come to work" as a problem for employers.

2) Wouldn't most firms that can realize significant added value by making employees telecommute already have gone that direction long ago? Fuel is more expensive recently, but it wasn't free at any time in the past.

This vision of a future business world is some crazy, slashdot fantasy!

[Franny]

Watch out dude... don't be so quick to mock a Franny prediction!

You don't want this to become another classic "I will never have a cellphone" or "There will never be a housing bubble" statement.

You work at an old brick and mortar company and you very well might not see change for years to come - those old fogies are very proud of their building, but I can assure you telecommuting will accelerate. Letting an employee work from home is like giving them a $400/month after tax pay raise. Employers cut cost. We're just now to the point where the systems are there to make this happen. Don't be scared of change my friend, it will only hold you back.

(and this isn't my solution to the oil crisis, it's just a counter argument to you believing that everyone will return to downtown living - no one wants to go downtown - there is nothing there. All the good restaurants, shops, whatever - they are in West Chester and Mason).

and for the record I order my shit through Amazon, including non perishable groceries. I ain't driving to Kohls!

[White Magic]

Originally Posted by Franny

Watch out dude... don't be so quick to mock a Franny prediction!

You don't want this to become another classic "I will never have a cellphone" or "There will never be a housing bubble" statement.

Ok, this is implying I made these statements. For the record I did not.

You'll still not supplying a lot of logic here Franny. How does my telecommuting save my employer money? I see how it saves me money, but I'm pretty sure getting me set up will cost my employer money and I'll be doing the same work. Is it because they won't have to turn on the air conditioning since everyone is at home?

Go ahead and order your shit through Amazon... You're paying a premium since it has to be shipped, and shipping costs will increase as fuel costs increase.

[Franny]

Shipping is free through Amazon prime. I buy in bulk, everything is cheaper. I love it when you try to mock me for things you know NOTHING about!

How do employers benefit?

Increased Productivity - less time in the car means more time at the phone, PC - working. Studies show there are less distractions at home and more shit gets done.

Less Square Footage - if I am a business owner leasing a 10,000 square foot office space and I can downsize to 3,000 square feet - basic common sense tells me this saves me money. And yes White Magic - I don't have to pay for this guy's air conditioning. That's cost savings, whether you mock it or not. I have to buy a PC for the dude regardless of where he works.


How the hell do you argue against this? This is just he evolution of the work place. You're just trying to pick a fight as far as I can tell. We're sending more and more people to home offices and the company saves an average $5,000 a year for each transistion. Our MBA produced the numbers in a fancy excel spreadsheet (from his home office)!

[White Magic]

Franny, the proof is in the pudding. The technology to telecommute has been around for years, yet very few firms take advantage of such a strategy. They're all less professionally managed than your place of employment? Maybe A.G. Lafley would like a look at your MBA's spreadsheet.

As for the assertion that people are more productive at home, I know that is not the case for me. I'm the type of person that needs to go to a library to study - there are too many distractions in my home. I would get more work done going into the office. I wish that weren't true, but it is. I don't think this is an uncommon personality trait - a lot of people are like me.

Franny, I'm sorry, but your rationale isn't very solid. It relies heavily on antecdotal evidence - what works for your company would not work for every company. (You can lease less space?) As for your predictions, they aren't always the best either. One example I found here in the CincinnatiSports archives from last fall:

Football Ticket Sales

You predicted 12,500 per game, the actual number was 30,246.

That's the trouble of posting your predictions here in the forums, sometimes people do remember them. Doh!

[White Magic]

Originally Posted by Franny

Shipping is free through Amazon prime. I buy in bulk, everything is cheaper. I love it when you try to mock me for things you know NOTHING about!

One last question: Did becoming an Amazon Prime member with free shipping benefits have cost, or was membership free?

Yeah, you're paying a premium for your groceries. Burn sucka!

[osu99jp]

Originally Posted by White Magic

As for the assertion that people are more productive at home, I know that is not the case for me. I'm the type of person that needs to go to a library to study - there are too many distractions in my home.

I'm the same way. I didn't realize we were in the minority. I'm studying for the CFA exam, and have to go to the library damn near every day after work. At home, not a chance.