Ramble

I am getting annoyed with the rising chorus of pundits and ignorant politicians decrying the current high gasoline prices as “price gouging.”  Even MoveOn.org has jumped on the bandwagon.  Just read Robert Rapier’s entry on the Senate Hearing on Gas Prices to get a feel for how clueless or deliberately showboating our Senators are being.

Okay, listen carefully, people.  Here are two scenarios for you.  One, is that the big bad oil companies are gouging the public of their hard-earned dollars and that they seem to cursorily engage in this behavior every year around the beginning of summer driving season.  Or, two, incredibly high demand for gasoline, plus refinery problems due to maintenance issues has led to the natural condition of increasing gasoline prices as the market attempts to reach equilibrium.  Now, which is more likely?

The issue of gasoline prices is more complex than my remarks above, but the primary mover of gas prices right now is demand.  It is finally going down, but one only has to look at the weekly gasoline inventory numbers (published each Wednesday) to see that there has been a huge draw-down of gasoline inventories, setting us up for a rough summer driving season and even potential shortages if demand doesn’t drop a great deal.  But, that’s not likely, so we’ll at least have high gas prices until the high demand season ends.  This is basic economics and the fact that so many individuals and organizations and even U.S. Senators are ignorant of this and willfully seem to be ignoring the many experts who keep explaining the situation over and over again is really disconcerting.

I’ve started reading Al Gore’s new book, The Assault on Reason, and I think the current “discussion” on gas prices is a prime example of how rational, reasoned debate based on the best available factual information has been replaced by appeals to ideology and a short-sighted focus on political expediency.