[saymaListserv] [afmdiscussion] Ken Spitze Column for May 14: "Economics 101: How (not) to Lower Gas Prices

Roy H Taylor III wrldpeas at mindspring.com
Mon May 22 17:16:25 JEST 2006

Dear Janet,
While I agree that all the schemes mentioned are worthless and that if we 
truely reduced demand it would have an effect on the price but that doesn't 
tell the whole story of gas pricing.  Gas is being traded as a commodity and 
the bets are that gas prices will go up so the futures market has all of the 
buying at inflated prices. This reinforces the notion of higher prices. 
Except for a brief period during the Hurricane aftermath last fall the 
ability to deliver full quantities has been available. While our use of gas 
remains on a gradual increase it is not happening fast enough to justify the 
current increases that we have been experiencing. If increases in refinining 
costs and delivery costs of the increased demand were all present the level 
of record profits would not be occurring.
What to do.
Agree to tax oursevles for the use of gas to pay for the means to reduce 
using gas.  Fund renewable energy development, fund public transportation. 
fund conservation measures such as green buildings that use only half the 
energy of what conventional buildings use.  Fund transportation concepts 
such as carbon fiber concept cars that are stronger than steel, weigh less 
than half and go twice as far as our current cars. (with a hybrid engine 
they would be getting over 100 mpg,  all with off the shelf technology that 
we have today) And fund research into solutions that haven't even been 
thought of yet.
We just have to collectively want to.

To: KenSpitzeDemocrat at yahoo.com

Economics 101:
How (Not) to Lower Gas Prices

By Ken Spitze

How can we really lower the price of gas? Well, let's start with the
basic answer from economic theory: we must lower demand. If we truly
did buy a half-tank of gas each week instead of a whole tank, we
would lower demand. If we would park our cars on even-numbered days
and walk or bike or ride the bus, we would lower demand. If we bought
cars that got more miles per gallon and drove the same number of
miles, we would lower demand. In truth, there are some relatively
simple ways to lower demand, but none are "magical".

First published in the Carroll Star News on May 14, 2006.

[Non-text portions of this message have been removed]

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