Sunday, September 24, 2006

Gas Prices: Just Who Are the Anti-Science Fundamentalists?

After months of demagoguery from politicians about how the evil oil companies are fixing prices, gas prices have come down.

Driving to South Milwaukee this morning, we saw two gas stations selling basic unleaded at $2.299 per gallon. We saw the same price in Shorewood this evening.

If the oil companies can manipulate the price upward, to pad their profit margins, why would they would let the price decline and settle for less profit?

But the demagogues have a fallback position.

They claim it’s just the fact that an election is coming up. Supposedly, the oil companies want the Republicans to win, and are holding down the price to help them.

Of course, since prices are low right now, we would not be surprised to see them go up after the election. But then, likely, they will go down again.

And the demagogues will have some ad hoc explanation about how the scheming oil companies decided to do all that.

In reality, there has never been (at least since the heyday of the Standard Oil monopoly a century ago) any real proof of price fixing.

Donald A. Nichols, a Madison economist who is a political liberal, has pointed out the following:
The historic markup between crude costs and gasoline prices has been in the range of 80 or 90 cents to the gallon. This includes the costs of taxes, marketing and distribution. . . .

Taxes are about 42 cents a gallon on average, 50 cents a gallon in Wisconsin. 18 cents of these taxes are Federal. This means that about 43 cents of the 85 cent differential between crude and gasoline is the cost of refining and distribution, which shows that this has been a quite competitive industry.
The only major disruption of this relationship has been Hurricane Katrina, which knocked offline a large part of the nation’s refining capacity.

We find it interesting that secular liberals ridicule Christian fundamentalists for not believing in evolution.

What are we to say about liberal fundamentalists who refuse to believe in supply and demand? Not understanding natural processes, they believe in Intelligent Design, not from a Divine Intelligence, but rather from the evil oil executives.

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