#154998 - 04/03/0403:03 AMWhat you Pay At The Pump
You may think i'm posting a follow up without thinking what i'm doing.<br><br>Wrong.<br>The price we pay for fuel at the pump gets a lot of interest from all car drivers, most citizens of any country.<br><br>This is why there is a war in IRAQ.<br><br><br>
Man I hate to rain on your parade, but the US going to war in Iraq is not going to dramatically change how much we pay for gasoline at the pump. First of all the US government does not set the price of crude oil. That price is set at the commodity markest around the world(New York, London, Hong Kong). Just look in the paper for "oil futures" to see where the price of oil is set. Second the price that the markets come up with is based on supply/demand, and what the market will tollerate. If anything the US war in Iraq will cause the price of crude to increase because of uncertanty in the market. Finally the supply of oil is controled primarily by OPEC. By reducing the supply, OPEC can cause prices to go up, and by increasing the supply OPEC can cause prices to go down. The US is NOT a member of OPEC, although Iraq is. But the influence that the US can bring to OPEC through the occupation of Iraq is minimal, as we saw this week when OPEC decided to reduce the production of oil. The US was not happy with this, and the commodities market experts believe that we could see crude oil prices as high as $40 per barrel. Finally the higher the price of crude, the higher the price of gasoline at the pump. So as you can see there are way to many external forces that control the price of oil, to believe for a second that the US war in Iraq will in any way have a positive impact of the price of crude oil, or gasoline at American pumps.<br><br>
Salus populi suprema lex
I don't think the war in Iraq has much to do with the month-to-month price of gasoline, in the US or anywhere else. I do think, though, that the war in Iraq has a lot to do with asserting Us rights to oil. We're more or less happy with letting OPEC set prices, but we're not happy with having a country with crucial natural resources, like oil, defy American hegemony.<br><br>And let me give you an index of why I say we're more or less happy to let OPEC set prices. The following is a column from my local paper today:<br><br>[color:blue]The price of gasoline hit a record $1.692 on Friday and the guy at the desk next to mine again wondered, “Why aren't people all that upset about it.”<br><br>He's been saying that often in the past few weeks as fuel prices have been inching up to what some economists say might reach $3 a gallon or more by midsummer.<br><br>I've been wondering the same thing. Gas prices are one of the foundations of the economy. As they go up so does the price of everything else. People should be in an uproar.<br><br>Then a story came in that milk prices were heading toward an unprecedented $3 a gallon.<br><br>And that should have people rioting in the streets.<br><br>Later, I was driving my son home from track practice and he spotted my sunglasses in my car.<br><br>“Cool,” he said. “Did you get these at the dollar store?”<br><br>“Yes. And they cost a dollar,” I said, heading off the standing dollar-store joke.<br><br>“If they cost a dollar now, they must have cost a penny when you were a kid,” he said, remembering my many ramblings about how prices were when I was his age.<br><br>And I think he believes my stories of nickel candy bars and 5-cent Cokes with the same grain of salt that he uses when trying to swallow tales of walking miles to school each day through knee-high snow.<br><br>“No,” I said. “In fact, I don't think I could have gotten a pair of sunglasses for less than $15 back then.”<br><br>He was puzzled by that. So was I.<br><br>How could something cost so much less today than it did 30, 40 or 50 years ago?<br><br>So I jumped onto one of those inflation calculators available on the Internet and found, much to my surprise, almost everything today is cheaper if you adjust for inflation.<br><br>For instance, in 1956 gasoline was only 30 cents a gallon. But, when you push that through the inflation calculator, it's equal to paying $1.94 a gallon in modern dollars.<br><br>In 1966, we found ourselves filling up our tanks at 32 cents a gallon, which the calculator translated to $1.76 a gallon in today's dollars.<br><br>Ten years later, during the early days of the gas shortages, gasoline had jumped way up to 59 cents a gallon. But still that was $1.57 in inflation-adjusted costs.<br><br>And milk, even at $3 a gallon, is a bargain compared with what we've paid in the past.<br><br>In 1956, we got milk for only 97 cents a gallon. But that's a whopping $6.27 a gallon in today's dollars. A decade later, the stuff we never outgrow our need of cost 99 cents only two pennies more. But that was still $5.43 a gallon in today's dollars.<br><br>And the $1.65 a gallon we were paying for milk in 1976 was akin to us having to shell out $4.38 a gallon today.<br><br>So, while the numbers show us paying record prices for gasoline and milk, the relative impact these prices have on our household budgets are actually benign.<br><br>It's hard to believe, but when you consider that the median annual income in 1956 was only $2,100, that 30-cent gallon of gasoline and the 97-cent gallon of milk look pretty steep.<br><br>And then consider that every kid in a Davy Crockett cap was badgering his folks for a $200 Philco television set. It was akin to my son asking for a $10,619 entertainment center.<br><br>I can't wait until my son starts telling his kids about prices back in the early days of the 21st century. The good old days when you could buy a pair of sunglasses at the dollar store.<br><br>And they cost $1.</font color=blue><br><br>If these figures are accurate--and to tell the truth, I haven't checked them out, so I don't vouch for them--what OPEC has cost us in the US is not a whole lot. Comparatively speaking, we're paying more or less the same per gallon of gas as we did 50 years ago.<br><br>So, again, to my mind the war in Iraq has less to do with the immediate price of oil, or even the immediate control of oil fields, and lots to do with the assertion of America's primary interest in the natural resources of the world. Back a few years ago folks sang that silly song, "We Are the World." Remember? The title should have been "We Own the World."<br><br>
_________________________ MACTECHubi dolor ibi digitus
What cost $210 in 1958 would cost $1290.56 in 2002. Calculator<br><br>Except it actually cost $7500. What is it? Why tuition at the state university of course. Ergo...teachers are the cause of inflation.<br><br>
_________________________ Old farts, the hidden caulk of civilization. Jim Atkinson
That's very interesting. I didn't know about the relationship between oil prices and inflation.<br><br>You said a couple of things that got me thinking<br><blockquote><font size=1>In reply to:</font><hr><p>We're more or less happy with letting OPEC set prices, but we're not happy with having a country with crucial natural resources, like oil, defy American hegemony.<br><p><hr></blockquote><p><blockquote><font size=1>In reply to:</font><hr><p>So, again, to my mind the war in Iraq has less to do with the immediate price of oil, or even the immediate control of oil fields, and lots to do with the assertion of America's primary interest in the natural resources of the world. <p><hr></blockquote><p><br>I'm not sure if I agree with the "hegemony" bit. If that were the case then why haven't we dealt with Iran, or Libya (prior to their change of heart)? Those are just the first two countries that come to mind. If it was all about defying America, there are plenty of countries that have oil, and don't come to heal when we whistle. Because of that I see the first statement as good rhetoric, but I don't agree with the content. I think the second statement is very close to the truth.<br><br>As a nation we should be interested in natural resources. Especially oil. Oil is energy, and in many ways it is the soft underbelly of our economy. EVERYTHING.......every single thing, from the price of a loaf of bread, to the cost of internet access will change with the change with the cost of energy. The price of oil plays a huge part in that equation. As oil prices go up the impact to our economy is across the board, and it is usually detrimental. If someone wanted to destroy the US economy, the easiest way to do that would be to hit the price or the flow of oil. As a nation, who's well being depends on a strong economy, we would be foolish not to place oil as one of the highest national interests. <br><br>But was the war in Iraq about oil? Iraq has huge reserves, but it is not the only oil producing country around, and we were able to purchase oil from Iraq prior to the war. Do we really control the oil in Iraq today. Physically we can stand on the oil fields, but it would take years to build the production capacity, and even then we will be turning over to a provisional government in a couple of months, so realistically we don't control the resource. I believe that the war was about getting rid of Saddam. Any oil issures may be possitive by products of that, but I believe the goal was to get rid of Saddam.<br><br>
Salus populi suprema lex
Me, be rhetorical? Never! <br><br>But seriously, I don't think that the word hegemony in the first thing you quote is there for rhetorical purposes. First, even the most hegemonic of powers can't always assert its interests forcibly--and I think Iran is a case in point. It's not a small country, to say the least, nor do I think that an attack on Iran would be as "acceptable" to the rest of the world as an attack on Iraq (despite the arguments from lots of countries against invading Iraq that we all know about, there was no overt anti-invasion movement of counterforces, etc; I suspect that an invasion of Iran would produce serious challenges from other countries). Second, not every country that's not compliant with a hegemonic power produces the same kind of response from that power. Lybia was pretty contained without having to invade it. (Of course, in my opinion, which is purely and entirely an expression of my political point of view, Iraq too was pretty much contained, except more expensively than Lybia--that's why I have to think about what motivated the invasion, and I have to conclude that it was to teach a lesson about accepting US hegemony, not to Iraq only but to everyone. The positive way of thinking about that is that it worked--look at how effective it was in getting Lybia to cooperate with us, after all.)<br><br>Anyways, I'm not wedded to the idea that asserting US hegemony is the key point. But I do think that in fact the US is the single hegemonic power in the world at this point in history, with challenges rising from China perhaps, but not yet come to fruition.<br><br>One more thing, to stir the pot a bit. If I were president (everybody duck, please ), the thing I'd try to do instead of/along with guaranteeing that we have dibs on natural resources, is to curb our appetite for oil. I can't believe that people don't see the connection between our being obliged to ensure oil supplies and the guzzling of gasoline that we're all guilty of.<br><br>
_________________________ MACTECHubi dolor ibi digitus
#155007 - 04/03/0403:11 PMRe: What you Pay At The Pump
i'm not saying the invasion of iraq was about the price paid at the pump.<br>i am showing how relevant oil is to our daily lives.<br><br>The ministry of oil in iraq was untouched by the bombings, and iraq has a third of the world oil reserves, thats why it is so relevant in invasion status c/w other oil producing nations<br><br><br>
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