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-   -   Michele Bachmann promises $2 gas! (https://www.miataturbo.net/current-events-news-politics-77/michele-bachmann-promises-%242-gas-59827/)

Enginerd 08-18-2011 09:05 AM

Michele Bachmann promises $2 gas!
 
Bwahahahaha good luck, hunnie.

Braineack 08-18-2011 09:18 AM

And so far, that's a better economic plan than Obama himself has laid out...maybe he'll cut his vacation short is submit it? I mean, he always asks congress to do that.




Other headlines of the day in case you missed them:

Jobless Claims, Inflation Rise More Than Expected

One in five American children now living in poverty according to new report
14.7million children in families with income less than $21,756 a year

Child poverty increased in 38 states from 2000 to 2009
Child Poverty in U.S. Increased 18 pct in 9 Years

Record numbers of homeless people in Portland, ME

U.S. Government Investing $500M in Solar Power Projects—In India

sjmarcy 08-18-2011 09:27 AM

Sure 2 dollar gas could be achieved. But we'd have to be more assertive with our suppliers. That won't happen if the community organizer gets four more years.

Presently we go into an unstable country, sacrifice huge amounts of money and lives. And then leave the economics up to them. We should have more of a say in such things.

Trump made some good points on our Wars and how different and long lasting they are compared to the past. He also noted that we are way too weak with China. For instance when they examined out stealth technology after the Bin Laden raid they took photos, samples, and had experts present. Why not send them a bill and deduct that from the debts ha!?

The main idea is that we are walking around with a kick-me sign on our backs.

Joe Perez 08-18-2011 09:48 AM

Serious question:

Does the price of gas *really* make that big of a difference? How many miles per week are some folks driving that $2.00 / gal vs. $3.50 / gal is considered a serious hardship?

Ok, I understand that there is a small segment of the population (we'll call them the Erin Brockovich factor, regardless of their accent or skin color) find themselves in a position where they "have to" commute 50 miles each way to work at some crappy minimum-wage job in order to support their three kids after their husband was murdered while distributing toys to orphans.

But for the majority of Americans, the middle-class, is paying $3.50 / gallon really going to have a significant impact on your life? I know that it's practically cliché, but you know those happy, prosperous Germans across the pond who are bitching and moaning about how successful they are and how all of southern Europe is trying to bleed them dry with their cowboy-style fiscal policy? They're paying 1,53€ / liter right now, which is about $8.30 / gal.

Seriously, apart from force of habit, what makes us Americans so special that we absolutely cannot tolerate paying the same for gasoline as everybody else, to the point where it is actually an electoral issue?! Presidents are supposed to be elected on matters of foreign relations and trade policy, not how much it costs you to top off the tank on your hybrid SUV.

This sort of thing actually makes me embarrassed to be an American.

Braineack 08-18-2011 10:02 AM

I think of it more as a metaphor.


But comparing to EU is hard. Euro's problem is the taxes; they pay essentially the same price for crude oil.

Joe Perez 08-18-2011 10:20 AM


Originally Posted by Braineack (Post 760937)
I think of it more as a metaphor.

I don't. The retail price of gasoline is not rigidly coupled to any other economic indicator. Ok, so it does slightly alter the price of air travel, shipping of goods by truck, and so on. But it has no bearing on home prices or mortgage rates, and isn't that what everybody is fixated on right now?



But comparing to EU is hard. Euro's problem is the taxes; they pay essentially the same price for crude oil.
It doesn't matter where the money goes after it leaves the consumer's wallet. $8 is $8, whether it's funding universal healthcare or buying private yachts for Saudi princes.

It really frustrates me that, here in the US, we pay so much less (both in absolute numbers and as a percentage of income) for gasoline, for taxes, for government service fees, and so on as compared to most other industrialized western nations, and yet in one breath we still piss and moan about how we pay "too much" for all of the above, while in the next, demanding that "the government" provide more and more in the way of "free" healthcare, "free" education, "free" social services, "free" mortgage bailouts, and so on. It is damned embarrassing.


So again, I ask, how does it actually matter to the majority of Americans whether gasoline costs $2, $4, or $8?

Sentic 08-18-2011 10:24 AM

If only we could have 3.50$/gallon over here, were at 9.04$/gal.
But as brain pointed out, about 70% taxes.

TurboTim 08-18-2011 10:24 AM


Originally Posted by Joe Perez (Post 760941)
So again, I ask, how does it actually matter to the majority of Americans whether gasoline costs $2, $4, or $8?

yes, it does.

EDIT: How? Really?

Braineack 08-18-2011 10:31 AM


Originally Posted by Joe Perez (Post 760941)
So again, I ask, how does it actually matter to the majority of Americans whether gasoline costs $2, $4, or $8?

yes, it's all realtive. I remember the good ol days of $0.99 87 octane back in 2000 or so.

I'm a frugal motherfucker. The difference between $2 and $4 a gallon is significant to me. I have a weekly/monthly budget for certain expendatures, if gas prices go up, things like my food budget goes down, in this case it would be $20, and that buys a lot of 0.80c boxes of pasta. My bills are always the same, and I refuse to take money away from what I put towards my savings/loans each month.

I've never had to pay $9 a gallon for gas, so comparing prices across the pond does not relate. You simply cannot compare the two.

At that same logic, you could say that kids living on the Amazon River get eatin by Characins so we should be thankful to live here and should pay more for gas.

In the scheme of things, the price of gas isn't going to kill me, but it does have an effect. If gas prices drop to $2 it means the entire economy is better, and i have more money in my wallet, and I'm to spend it on crap.

mgeoffriau 08-18-2011 10:35 AM

I can't speak for the significance on a macroeconomic scale, but I'll tell you that as someone who works in an independent bookstore, the price of gas absolutely affects my monthly budget in a significant way.

Joe Perez 08-18-2011 10:37 AM


Originally Posted by TurboTim (Post 760943)
yes, it does.

But HOW?

Let's assume that the US Government had the capability to synthesize gasoline out of thin air at zero cost, and so they gave every single person in the US 20 gallons of gasoline per week absolutely free. (We'll assume that, for whatever reason, this gasoline cannot be exported or re-sold; it has to be consumed domestically.)

This would not in any way change the fundamental, underlying truths of the healthcare system, the banking and credit system, the education system, the housing industry, Military policy, etc.

The only thing this would do would be to increase air pollution, raise the costs of environmental compliance, create more traffic on the roads, lengthen everybody's commute times, and indirectly subsidize automakers and tire manufacturers (both foreign and domestic), while crippling R&D and investment into battery storage technology, zero-emission energy production, etc.

sjmarcy 08-18-2011 10:38 AM


Originally Posted by Joe Perez (Post 760941)
I don't. The retail price of gasoline is not rigidly coupled to any other economic indicator. Ok, so it does slightly alter the price of air travel, shipping of goods by truck, and so on. But it has no bearing on home prices or mortgage rates, and isn't that what everybody is fixated on right now? It doesn't matter where the money goes after it leaves the consumer's wallet. $8 is $8, whether it's funding universal healthcare or buying private yachts for Saudi princes. It really frustrates me that, here in the US, we pay so much less (both in absolute numbers and as a percentage of income) for gasoline, for taxes, for government service fees, and so on as compared to most other industrialized western nations, and yet in one breath we still piss and moan about how we pay "too much" for all of the above, while in the next, demanding that "the government" provide more and more in the way of "free" healthcare, "free" education, "free" social services, "free" mortgage bailouts, and so on. It is damned embarrassing. So again, I ask, how does it actually matter to the majority of Americans whether gasoline costs $2, $4, or $8?

You can relieve your frustration by simply paying in more taxes on your own, voluntarily.

Warren Buffet can do the same.

It's up to you!

Braineack 08-18-2011 10:40 AM


Originally Posted by Joe Perez (Post 760950)
Let's assume that the US Government had the capability to synthesize gasoline out of thin air at zero cost


WHOA there Ron Hubbard....This isn't a science fiction novel.


and those unintended consequences are exactly why gov't shouldnt meddle.

hustler 08-18-2011 10:41 AM

http://articles.latimes.com/2011/aug...a-bus-20110818

Obama is too busy traveling in his twin $1,100,000.00 motor coaches to give speeches in the midwest and not campaign there. These were purchased with tax dollars, btw.

Braineack 08-18-2011 10:46 AM

and built in Canada.

Scrappy Jack 08-18-2011 12:50 PM


Originally Posted by Joe Perez (Post 760936)
Serious question:

Does the price of gas *really* make that big of a difference? How many miles per week are some folks driving that $2.00 / gal vs. $3.50 / gal is considered a serious hardship?

The economic drag from oil prices (which are highly correlated to gasoline prices, particularly as they "rise like a rocket but fall like a feather") in 2011Q2 will probably be on the order of 3%.

In 2008Q3, it was almost 4%.

Note that the 2011Q2 CPI number will not account for the rapid drop in oil prices that has happened at the beginning of Q3.


But for the majority of Americans, the middle-class, is paying $3.50 / gallon really going to have a significant impact on your life?
This is a valid question that I cannot answer, but I can tell you it will vary widely based on geography. Consider that in many cities that have "nice" business-oriented downtown or city centers, there may be a significant number of middle class workers that have a 30-minute or more commute because of the emmigration to the sub- and ex-burbs. Those people now have homes they cannot or will not sell and job changes are more limited.

Those living in cities with major public transportation infrastructures (subways, monorails, buses, etc) are less directly affected - but those fuel costs are then borne by the municipalities. Likewise, the fuel costs affect most businesses at some point in the supply chain - especially if those input price increases are passed along.

Consider also that crude oil prices generally have a very high correlation with many of the inputs to various petroleum-based products (like plastic components).

Scrappy Jack 08-18-2011 01:00 PM

Or, put even more simply...

If the average household put 12,000 miles per year on their vehicle(s) in total and gasoline goes up by $1.00 per gallon, what impact does that have on their budget?

TurboTim 08-18-2011 01:49 PM

Especially when their boat (or track car) does about 3mi/gal and tow vehicle does 8mi/gal, and the ramp is 50 miles away. Shit adds up.

Braineack 08-18-2011 01:50 PM

lol. how many of you had to go into debt to sell your house?

Reverant 08-18-2011 02:19 PM


Originally Posted by Braineack (Post 761037)
lol. how many of you had to go into debt to sell your house?

That sounds fun.

Braineack 08-18-2011 02:25 PM

it's not.

Reverant 08-18-2011 02:33 PM

I disagree. trollface.jpg

Braineack 08-18-2011 02:39 PM

oh yeah. i was too rich saving money for over 3 years; level playing field now.

Joe Perez 08-18-2011 03:03 PM


Originally Posted by Scrappy Jack (Post 761009)
If the average household put 12,000 miles per year on their vehicle(s) in total and gasoline goes up by $1.00 per gallon, what impact does that have on their budget?

Assuming that their fleet averages 25 MPG (a fairly safe assumption these days), it would, to use a popular (though cliched) metric, cost them the equivalent of slightly less than one half of one 16oz Iced Caramel Macchiato per business day.

Assumptions:

5 days / week at 50 weeks / year.
7% sales tax

sjmarcy 08-18-2011 03:05 PM

A number of liberals would like a 5-7 dollar gas tax slapped onto present prices.

Braineack 08-18-2011 03:07 PM

So would the CEO of GM...

mgeoffriau 08-18-2011 03:07 PM


Originally Posted by Joe Perez (Post 761077)
the equivalent of slightly less than one half of one 16oz Iced Caramel Macchiato per business day.

Which is how much? Those hardest hit by a gas price increase are those least likely to be buying expensive coffee 5 times a week.*




*This claim is very likely untrue, but let's pretend that those with smaller budgets are generally more frugal.

Braineack 08-18-2011 03:09 PM

...they seize upon a catch phrase—any catch phrase—because it fits their emotions.

Such men do not judge the truth of a statement by its correspondence to reality—they judge reality by its correspondence to their feelings.

Joe Perez 08-18-2011 03:27 PM


Originally Posted by mgeoffriau (Post 761080)
*This claim is very likely untrue, but let's pretend that those with smaller budgets are generally more frugal.

But that's just the problem. While there are Erin Brockoviches in the world (is this the thread where I used that analogy earlier?) most of the people who I personally know that fit into the "would be hurt by $8/gal gas" are not by any means frugal. They are, in fact, the ones who have the latest cell phones, the latest game consoles and big LCD TVs, drive leased cars, order take-out from "dine-in" restaurants on a regular basis, and generally just fail to see the relationship between "spending every penny I earn and then some" and "not having any money left at the end of the month."

That's how they got to be "poor" in the first place.

Is this true of 100% of the population? Of course not- no generalization more specific than "they inhale oxygen and exhale carbon dioxide" usually is. But you can't base policy on things like that.

Braineack 08-18-2011 03:30 PM

none of that matters.

Joe Perez 08-18-2011 04:01 PM


Originally Posted by Braineack (Post 761089)
none of that matters.

Yeah, I've figured out what doesn't matter, I'm trying to figure out what does matter.

From the standpoint of the election of a President, that would mostly be things like trade policy, foreign relations, healthcare policy, the appointment of cabinet members and judges, etc.

If the president wants to influence the price of gasoline in a sustainable manner, (s)he really only has two levers to pull. One is the Military, the other is the EPA.

Unfortunately, conquering foreign nations and annexing their natural resources has historically been a problematic venture (just ask the Brits), and I honestly can't figure out why no administration to date has had the balls to tell the EPA and Greenpeace to go fuck themselves insofar as the habitat of the endangered red-spotted toad would be at risk vis-a-vis drilling for oil.

jeff_man 08-18-2011 04:08 PM

I guess you have to be dumb as shit and talk like a canadian to be a female running for president....

shlammed 08-18-2011 04:13 PM


Originally Posted by Joe Perez (Post 761095)
... has had the balls to tell the EPA and Greenpeace to go fuck themselves insofar as the habitat of the endangered red-spotted toad would be at risk vis-a-vis drilling for oil.


I think this about more than just drilling oil.

Its the winey bitches in the world that ruin it for everyone. I understand that sometimes things will change, but before there were people there were other things so just look at it as evolution. Edit: i realize i opened a whole new can of worms. sorry.

falcon 08-18-2011 04:23 PM

I still don't get how the country with the most oil reserves in the world (Canada) has as astronomical gas prices as we do..

Savington 08-18-2011 04:25 PM


Originally Posted by sjmarcy (Post 760929)
Sure 2 dollar gas could be achieved. But we'd have to be more assertive with our suppliers.

And by "suppliers" you mean the banks who are storing crude in supertankers and then refusing to unload until crude prices rise right?

falcon 08-18-2011 04:29 PM

If you do the maths and converted the $/L CAD to $/G USD we are hovering around the $1.30/L CAD mark which equates to $4.96USD/gallon. And that's for 87 octane. 91/94 is around $1.40-$1.45 ($5.30 USD/gallon).

I wish we had $3.50/gallon gas up here.

budget racer 08-18-2011 04:31 PM

I have a 90 mi/day commute. Gas prices impact me pretty hard. My solution was to buy a car that provides twice the miles/gallon ('11 Fiesta vs '06 LGT). So if gas prices double...then I guess that I am back to par.

I consider myself to be very frugal. My $$ splurges are nil.....except for the turbo miata (which i have vowed to not drop another dime into). No iphone or the like for me.

Joe Perez 08-18-2011 04:34 PM

You live in New Jersey. Your argument is invalid.

Scrappy Jack 08-18-2011 04:34 PM


Originally Posted by Joe Perez (Post 761077)
Assuming that their fleet averages 25 MPG (a fairly safe assumption these days), it would, to use a popular (though cliched) metric, cost them the equivalent of slightly less than one half of one 16oz Iced Caramel Macchiato per business day.

Assumptions:

5 days / week at 50 weeks / year.
7% sales tax

12,000 miles per year / 25 MPG = 480 gallons per year

(Y0) 480 gallons per year * $2.00 = $960 per year
(Y1) 480 gallons per year * $3.00 = $1440 per year ($480 or 50% YoY increase)
(Y2) 480 gallons per year * $4.00 = $1920 per year ($480 or 33% YoY increase)
(Y3) 480 gallons per year * $5.00 = $2400 per year ($480 or 25% YoY increase)

[check my math as those were real quick calculations]

Or, thought of another way, as cumulative increases: $2.00 to $4.00 = $960 per year increase. Assuming a real median income of about $50,000 per household, that is about 2%.


Or, as Joe might say, only about $1.32 per day. That does seem pretty insignificant on its face. Obviously, this grossly understates the total economic impact - but on a household basis, even if that number is doubled (e.g. two cars driving 12,000 miles each), it does not seem like ~$19/week should be debilitating to most families.

A challenge with gasoline price increases is that they are quite regressive in nature.

budget racer 08-18-2011 04:39 PM


Originally Posted by Joe Perez (Post 761111)
You live in New Jersey. Your argument is invalid.

???

Joe Perez 08-18-2011 04:43 PM


Originally Posted by budget racer (Post 761117)
???

Are you not familiar with the "(something random), your argument is invalid" meme?

Scrappy Jack 08-18-2011 04:43 PM


Originally Posted by falcon (Post 761103)
I still don't get how the country with the most oil reserves in the world (Canada) has as astronomical gas prices as we do..

Initially? Primarily technological/economic (i.e. tar sands were too costly to tap relative to other sources and profit margin expected).

Now? Primarily political.

falcon 08-18-2011 04:44 PM

The amount of oil reserves up north (mostly untouchable with current technologies) dwarfs the rest of the world's reserves. If I were the Canadian govnt. I would be investing money in advancing tech that can help access the oil up north (when I mean north I mean REALLY north). There is also a ton of the coast of BC, but because of current laws and shit we can't drill in certain areas offshore. I think Greenpeace and the whales have something to do with it...

I'll also add, approx $.35 of the current gas prices in BC is "carbon tax"... lol. And then another % goes to Translink which is the govt corp that takes care of all the roads/transit etc. And they suck BTW. They also get a piece of property tax, ferry admission, road tolls etc. etc.

budget racer 08-18-2011 04:54 PM


Originally Posted by Joe Perez (Post 761121)
Are you not familiar with the "(something random), your argument is invalid" meme?

Sadly, no....I live under a rock.

NJ gas prices are fairly tolerable compared to the adjoining states......and (by law) the attendants pump all the gas. The problem with NJ is the property taxes....that's why my commute is so tremendous. The tax rates forced me to purchase a house in farmland - where the taxes are much more affordable. It's the lesser of two evils.

Joe Perez 08-18-2011 06:23 PM

3 Attachment(s)
Ah. Well, one example might be a picture of a cat pushing a watermelon out of a lake, with the caption "This cat is pushing a watermelon out of a lake. Your argument is invalid."

It might look something like this:

Attachment 240685


Or a picture of two prairie dogs having sex on top of a man's head under a plexiglass dome in the middle of a simulated desert:

Attachment 240686

Etc. There's a whole genre of these.

The general idea is that when one has encountered an argument which is considered to be so flawed or otherwise unreasonable that there is no hope of reasonable discourse, the only way to respond to it is with something so ludicrous that it cannot possibly be interpreted as having constituted a serious acknowledgement of the argument being put forth.


Of course, now that I've stepped out of character, I guess I'll just go ahead and take off the "be nice to forum members who aren't Pusha" hat for a moment and respond in a serious manner.

I find your argument to be unreasonable.


I'm not sure where you commute to every day, but since your complaint was against property taxes and not real estate prices, I'm guessing it isn't Manhattan. That said, I find it exceedingly hard to have sympathy in such a situation.

As a point of reference, I live and work in Southern California. San Diego county, to be precise. Home prices around here are simply absurd, even after the bubble popped, a typical 2/3 home with no yard will run you $500-$750k anywhere in or around Carlsbad, while a 1 or 2 bedroom condo can sometimes be found for as little as $250,000-$300,000. And if you think your property taxes are bad, try imagining what they'd be if your assessed base was half a million or more.

At the same time, we routinely have the highest gasoline prices in the nation. According to AAA data current as of March 7, 2011 listing the 10 cities with the highest gas prices in the US, all 10 of them are right here in the land of fruits and nuts.


How do I deal with this? Well, the fact is that I could actually afford to buy a house here. It would be quite a strain, but I could probably swing it if I ate nothing but ramen. Or I could do as you do and buy a place 30 or 40 miles from here in Temecula or Murrieta (which is our version of farm country) where nice houses can be had in the $200-$300k range. A couple of folks here in the office live up there and brave the commute on I-15 every day.

But I chose not to.

This isn't because I don't like living in a house. Far from it, I miss not having a large side-by-side garage and some space between myself and my nearest neighbor. And having a basement was nice when I lived in Ohio- you could make any sort of mess you wanted to down there without having to worry about sawdust, grinding debris or pulverized metal finding its way onto and into your cars, engines, etc.


No, I simply don't think that it makes sense. I hate long commutes, and even though the calculators say I could swing the mortgage on a $600k home, I don't think that would be a sound financial decision. So instead, I live in an apartment that's just six miles from the office, in one of the ritzier parts of Carlsbad. And given this, you'd expect that paying for gas would be no problem, right? Well, yeah- the cost of gas was of little concern to me back when I drove a car every day, but now I commute by bicycle most days. It's quite liberating, actually. I get plenty of exercise, and the cops don't seem to care if bicyclists completely ignore the traffic laws insofar as things like red lights and such are concerned so long as you don't cause any accidents.


Now, I realize that not everyone lives in an area where the weather is conducive to bicycling every day, and that some folks have families and children and thus require something slightly larger than a 700 ft/sq apartment to live in. My point is not that my specific solution is the answer for everyone, it's merely that there are always alternatives.


So I just don't know how to respond in a manner that you'll accept. I realize that everyone's situation is different, however I have a hard time accepting that you "must" commute 90 miles each day and yet at the same time realize that trying to convince you of this is probably futile. Thus,

Attachment 240687

budget racer 08-18-2011 08:06 PM

Hah. I like the hamburger shoes.

Anyhow, I'm in no way trying to argue or prove any point. For my particular situation - financially, I feel that my commute is justified. I'll be frank with my dollar figures.....I just purchased a (3br/1ba/full base/2.5 car garage) home located in NW NJ for $165k with yearly taxes under $3K. I commute 45mi east (towards NYC) to my job. A comparable home in the same town as my job would easily cost double with yearly taxes probably in the $15k territory. That pays for a lot of gas.

I would love to live close enough to work to cycle-commute, but it's financially impossible. Instead, I live in mounting biking country.....so it's a good tade-off. In fact, I just finished putting a new set of clipless pedals on....looking forward to breaking them in this weekend.

edit: the lost time (approx 2.5hrs) commuting is the real bummer.

Diamond Dave 08-18-2011 08:07 PM

Tell the sheeple what they want to hear and they will vote for you.

You have to remember, When gas got close to $5 in 2007, Americans proved that they just learned to do math by dividing Miles driven by gallons consumed. They were SHOCKED to learn that their Chevy Tahoe got 18MPG while a VW Golf got near 30MPG.

I for one would like gas to go up another $1 per gallon. I think it would make my commute a little friendlier ;)

budget racer 08-18-2011 08:15 PM

your first post here says "I for one would like gas to go up another $1 per gallon".

damn.....this one is ballsy.

Enginerd 08-18-2011 09:43 PM


Originally Posted by mgeoffriau (Post 761080)
Which is how much? Those hardest hit by a gas price increase are those least likely to be buying expensive coffee 5 times a week.*




*This claim is very likely untrue, but let's pretend that those with smaller budgets are generally more frugal.

The other side is buying McDonalds and KFC.

Enginerd 08-18-2011 10:05 PM

http://autos.aol.com/article/michele...-gas-sideshow/

Presidential candidate Michele Bachmann's promise to drop gas under $2 a gallon may actually hurt the economy more than it could help.

"When the President became president, gas was $1.79 a gallon," she said earlier this week at a stop in South Carolina. "Under President Bachmann, you will see gasoline come down below $2 a gallon again."

She added: "That. Will. Happen."

Though initially low gas prices may sound good, it may actually be detrimental to the economy. The reason gas prices hit $1.79 in December 2008 when Obama was President-elect was because the economy was in the tank. Besides rampant foreclosures, bank failures and a tanking stock market, there was less demand for gas. Why? Unemployed people didn't need to use as much gas, since they weren't commuting to work anymore.

Low gas prices can often be a barometer of economic turmoil. Trucks used less gas during the early recession as well, because they didn't need to ship as many items to stores or idled manufacturing plants.

Cheap gas could hurt the nation's efforts to wean itself off foreign oil. Automakers recently promised to bring their average fuel efficiency to 54.5 mpg by 2025 -- a move the companies agreed to because they expect gas prices will keep going up, and consumer demand will help drive demand for more fuel-efficient vehicles. When gas is cheaper than a gallon of milk, people stop worrying about fuel efficiency and start driving things like Hummers -- which could derail plans to increase the average fuel efficiency.

....

Bottom line: Bachmann's promise of cheap gas appears to be a ploy to get voters on her side, even if it's an impossible promise to make.

Low energy costs and low energy demand are a key sign that economic development is slow.

The last statement by the journalist above is right on. The ignorant voters will hear 'cheap gas' and jump on board. Idiots.

FRT_Fun 08-18-2011 10:08 PM

Maybe she said it was going to be less than 2$ a gallon because she is going to invest in creating new sources of efficient power, thus lowering the demand for gas.

DUH!

Stein 08-18-2011 11:23 PM


Originally Posted by Scrappy Jack (Post 761009)
Or, put even more simply...

If the average household put 12,000 miles per year on their vehicle(s) in total and gasoline goes up by $1.00 per gallon, what impact does that have on their budget?

It doesn't affect mine. I look at it this way. The day I start bitching about $3.50 gas is the day that I stop DD my big honking Dodge Quad Cab 4x4 that gets 15mpg on a good day. And I do drive 22 miles each way to work. More importantly, it's my sales vehicle so I drive it 30,000 miles a year. I have had it since December 06 and it has 146,000 on it so pretty much right on that average. That's 2,000 gallons a year or $7,000 in fuel in a year. Compared to a 30 mpg car and I'd save $3,500 a year or basically $300 a month.

FRT_Fun 08-18-2011 11:24 PM

Seems like a good chunk of change (for me at least).

Stein 08-18-2011 11:26 PM


Originally Posted by falcon (Post 761103)
I still don't get how the country with the most oil reserves in the world (Canada) has as astronomical gas prices as we do..

Might have something to do with the lack of refineries and Canada's love of taxes to pay for "free" healthcare.

BTW, can hardly wait for my annual 10 day pilgrimage to NW Ontario in two weeks for fishing. 17 years running, regardless of fuel cost. Normal rates at the marina are $1.50/liter and I DON'T CARE.

fooger03 08-18-2011 11:49 PM

I postulate that the price of energy is the primary cause of the global recession. All of the other government failures are merely secondary effects - those failures wouldn't have had the opportunity to fail had the primary cause not caused recession in the first place. For those of you that enjoy a read, I'm going to dig up an email that I wrote to a family member while I was deployed... If I recall correctly, I made some postulations/assumptions in this email about the "future" that turned out to be wrong, but here it is anyways.

Ahh, here it is. I sent this around march 2009, just after the bottom fell out of the oil market. The reference at the end regarding power lines was a response to a comment she made about liberal fucktards in LA not wanting to build a distant nuclear power plant because the HV power lines that run to the city would "ruin the ecology"...

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I'm of the opinion that energy drives the economy, or at least, it has enough of an influence on the economy that it nearly drives the economy. I think the thing that makes it hard to see though is the fact that everyone has the ability to cope with paying another dollar or two per gallon of gas, or an extra cent or two per killowatt hour used. I suspect though, that more than the cost of electric energy, fuel energy has crippled our economy. It's our dependancy on the internal combustion engine, and in turn, the almost exclusive dependancy of those engines on gasoline.

As I'm sure you know, a fast paced economy is extremely fragile. Up into, and through the '90s, government did a great job at making sure the economy was rock solid while minimally impairing economic growth. In 1998/1999 though, world demand for fuel began outpacing global production capacity (or in the case of OPEC, willingness to produce), and the price of fuel spiked. (I remember jumping in the van with mom to run to the speedway to fill up the tank with 98 cent gas because dad said prices were going through the roof. The next day, gas was $1.27/gal.) Well, because gas is highly inelastic, (more of a *need* than a *want*) people are going to try to continue buying the gas that they need. Without this, they cant get to work and make money to spend on gas to get to work. (is that a "Catch 22" or a paradox?) What happened when people started shelling out big bucks for gas was that their purchasing power decreased.

Meanwhile, with the increase of the price in fuel, Industry get hit HARD. The services industry, perhaps not much so, but the transportation industry took a HUGE hit. To account for this, transportation prices increased, which increased production costs, and ultimately retail costs. Potentially a bigger hit was taken in grown foods, where a large portion of the production costs are in vehicle fuels (combines/tractors/etc.) After the food is planted, insecticided, and harvested, it then needs to be transported (Read transportation industry above). Animal products (meat/milk) also saw the price increase because the biggest cost in animal maintenance is grains for feeding them.

Finally, the increase in oil prices spiked the cost of electricity from oil burning power plants. Fortunately, a lot of oil fueled plants have the ability to switch to a different fuel source, but at the cost of tens of thousands of dollars and a lot of downtime. Unfortunately, if a lot of oil fueled plants switch their fueling source, the demand for the new fuel source sees an unprecedented increase, so prices go up either way.

All of these prices are passed to good ol' #1, the end consumer. Now, not only does the consumer have reduced purchasing power because of all the extra money he is spending on fuel, but the problem is compounded by the increase in price of goods that he would normally purchase. Initially, this wasn't a difficult obstacle to overcome, because most Americans have enough disposable income to to switch spending from big screen TVs, vacations to Disneyworld, and new cars, and start paying more for gasoline, groceries, and heating bills. Unfortunately, we didn't switch immediately, we used credit for the TVs, Vacations, and Corvettes. You see, we Americans have a "standard of living" and are quite stubborn about throwing that to the wind. Gas prices were going to come down soon enough weren't they?

Meanwhile, the federal government made its biggest blunder. A move that, had they not made, could have made this recession a mere fraction of what it is. All they really succeeded in doing was forcing the recession to occur a few years later, and by holding the recession back, they made it angry. This blunder, of course, is the financial sector. Specifically, the federal funds interest rate. You see, government stopped the last big economic downturn before it had a chance to rival "the great depression" (When was that? '78? maybe '87? I wasn't a part of the economy at that time, so I don't know) What happened to interest rates then? I recall hearing of federal funds rates closer to 22% or 25%. It brought that recession on quicker, but it was relatively mild mannered compared to what it could have been I believe. Then governement got smart and we made it through the 80s and 90s with an extremely stable economy. I remember my high school government teacher kind of walking us through how the govt changes interest rates to keep the economy stable.

But the federal reserve, in its infinite wisdom, decided to slash interest rates in a time where peoples spending abilities were reduced. So we went out and bought up all the houses, and we made them build us more houses, and we bought those up too, and we completely maxed out our spending ability because all these houses were so cheap with low rates that we just had to have them.

Then it stopped.

At this point, a lot of credit cards started to run dry. This is still an OK scenerio for us Americans, because we are generally smart enough to stop spending money when the bank account is zeroed out and the credit cards are maxed. Gas prices weren't coming down, so we did the smart thing and started paying off our credit cards.

We were trying to be smart, we were trying to pay off our credit cards, and our new homes. Basically get out of debt. Only one small teensy weensie problem...

...when we started paying off our credit cards, we stopped buying things. We stopped buying our TVs, we stopped travelling cross country, we didn't replace our toaster's with the latest greatest models...but most importantly, we stopped funding the companies that were making our TV and our toasters, and flying us cross country. Of course you know what happens when toastmaster stops selling their toasters and whirlpool stops selling their clothes washers, they start loosing money. When they start loosing money, of course, they start producing less, and less. And they toss off an employee here or there that they dont need. They damn sure aren't going to hire new employees.

Fired employees can't spend any money at all, and with employers not hiring, they were left without an income. The only financial possesions they had were their maxed out credit cards and their really 'cheap' expensive homes. Any laid off employees that didn't owe money to people weren't going to buy new toasters anyways because their old ones still worked, and they weren't going to spend the income they didn't have on new ones. Over a few months, the problem quickly compounded. Companies without income were firing employees in debt. Those who did keep their jobs were still not buying anything though.

This ultimately turned into the housing crisis. With people maxed out between their houses and their credit cards, the few who lost thier jobs quickly lost their houses, and with such a terrible housing market, when the banks resold the houses, AND IF they could resell the houses, they sold for much much less than what the banks originally financed. Banks began losing money on houses, and so to supplement, they turned up the rates on adjustable mortgages, but just a few tenths or hundredths at first. Now people who DID keep their jobs, but were maxed out between credit cards and housing payment, saw their payments just barely out of reach. These were in turn, repossessed and resold at a loss. ARMs were turned up a few more tenths or hundredths, and once this compounded a few times, we enter the era of the "housing crisis".

I think you know the rest, banks start going under, companies start going bankrupt, etc. etc.

Unfortunately, for the rest of the world, America plays a HUGE part in global economy. We buy everyone elses junk basically. When we stopped buying, it affected them too. They were under the same energy crunch that we were under, but without their governments slashing interest rates for housing, pre recession, they were well into a position that could have seen them riding though this downturn without a hitch. But they weren't ready for us to stop buying. Now other countries are in a similar predicament that we are in (though still not as bad). Foreign GDPs plummet to staggering lows. Among the notable countries with dropping foreign sales are the oil producing countries. Their GDP #s are falling too because of reduced goods exports. Fortunutately for them (and fortunately for us) oil producing countries under an oligopoly structure (such as OPEC) are only producing to OPEC quotas, which are nowhere near the production capacity for those countries. These countries have one very easy way to supplement their falling GDPs. They throw OPEC off of their shoulders, and produce more oil. More oil sales means these countries get to keep a static GDP. Because of the inelasticity of oil as a commodity, if one country begins producing more oil, the total price of oil drops dramatically. This puts other oil countries in a predicament, they either produce more oil themselves to make up for the falling price of oil, or they lose BIG. This is especially true in countries whose sole export is oil. Until they can make up for lost GDP from other exports, these countries should continue to produce cheap oil until the global economy returns to a comfortable level (probably circa 2000/2001/2002 standards).

Of course, cheap oil means people can go to work cheaper and the things they buy every day are cheaper. They will be able to pay off their credit cards more quickly, which will allow them to start buying their TVs and Disneyworld trips again. Manufacturers will need to hire more people to help build their toasters and clothes washers. They'll need more people to ship their goods again, and more people to sell these goods. Now people with new jobs will be able to make their house payments again. etc. etc.

I think gas prices will bottom out in/around October. The national average for gas then might be around $1.25/gal for regular unleaded, and hold just a touch higher than that for another 6-12 months. Gas prices will then start to climb back up over the following 12-18 months, but not to the $4/gal mark, maybe closer to $2.50/$2.75.

Cheap gasoline isn't the long term solution, but it's the solution we need right now. I expect our future will see this rough economic point as the era when renewable energy sources began their ascent into the mainstream. The cheap energy will definitely give us the time to build the basic supporting infrastructure to such a change.

As far as the naysayers that say those power lines ruin the ecology, they should consider what a big city such as San Diego, LA, or San Fransico does to the ecology. What does a coal burning plant do to the ecology? Big power lines that run from the desert to a big city, thereby reducing the amount of crud thrown into the air by a new coal burning plant, are a vast improvement. If they don't want to power their homes from wind power because of the power lines, they are more than welcome to take their house off the grid and set up a solar array. Heck, they can build their own power plant if they want, but to keep people from using clean renewable energy because the method of transporting the electricty is not 'environmentally friendly' is to cut off their noses to spite their face.

I never saw "who killed the electric car", but I get the basic idea. Fortunately, the electric car isn't lost forever. I have been keeping my eyes on the Chevy Volt, and I'll probably buy one a few years after they start production.

This electric car thing brings up a new business opportunity though. Currently, the electric cars require the installation of a "charging station" at the owner's home to get the correct power configuration. Someone is going to make a LOT of money building a business model off of at home installation and maintenance of these charging stations, and because they're travelling to people's homes for maintenance on the charging stations, they'll also develop the business model to include in-home servicing of customer's vehicles.

TorqueZombie 08-19-2011 12:39 AM

^Mind blown. I admit I don't keep up with the economy or politics like I should. But starting to read more of it I guess comes with age. When your 20 who cares, your 20. But at 30 these things begin to matter. There isn't but there should be a way to teach the young this stuff. Also the old, my girls dad is an idiot like most Americans. I lived in Europe for a few years and paid for gas on the economy. I was military and had disposable income at the time. Still paid $8 a gallon, went to Oktoberfest every year 8hrs away, rode my bike and drove my miata for fun. $8 a gallon and twisties galore was way better use of my money than failing with italian girls at the club paying $12 a drink. Do I wish I had saved more yes. Have I been good with money over the years...well better than anyone else I know my age.

Scrappy Jack 08-19-2011 09:14 AM

Some good points in the above and it does allude to what I think most people intuitively know but don't really understand (the "balance sheet recession"). One critique, fooger, you have some mistakes and some holes in your historical recounting.

Diamond Dave 08-19-2011 08:24 PM


Originally Posted by fooger03 (Post 761253)
I postulate that the price of energy is the primary cause of the global recession. All of the other government failures are merely secondary effects - those failures wouldn't have had the opportunity to fail had the primary cause not caused recession in the first place.

The only way to encourage people to change their habits is by adjusting the impact on their wallet.

You're right though. The dirty secret is that the only way to get the economy in motion is for people to start buying things again. People didn't have the money before when they helped build the bubble and now that they realize they really DON'T have any money, they aren't buying anything. It's not realy pretty out there.

The Consumer idiots think that green energy should be less expensive than the energy we have currently, when the fact of the matter is, Dinosaur juice fcuking rocks!! I work with the Utility industry; they're scared sh!tless that everyone is going to go buy a plug in vehicle when their energy grid can barely keep up with the current load.

If oil prices go up, it's only better for the US economy. Production in low cost countries comes home, jobs come back (unless the tax environment continues to be hostile).


So yeah, I'd rather we control when gas prices go up and where that additional money goes. Read up on peak oil. Research which oil fields are the top producers today and then find out what they were producing in the 80's. Hopefully you'll be shocked.

Stein 08-19-2011 11:00 PM


Originally Posted by Diamond Dave (Post 761571)
If oil prices go up, it's only better for the US economy.

Umm, doesn't that just increase the flood of money moving out of our economy and into the pockets of those overseas, all the while reducing the finite amount of every family's budget that could be spent on other things?

Of course, if the oil prices were lower, the same families would take the extra money and go to walmart to spend it so that money could...go....overs... oh, never mind.

Enginerd 08-20-2011 02:16 PM

No, it means that your tree huggers have money to spend on their R&D for 'cleaner' and 'safer' power. It also means that your neighbor keeps his Suburban in the garage more often or sells it and buys a Prius.


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