With oil prices flowing relentlessly upward–at least for the time being–and gasoline prices naturally, inevitably following suit, it should be clear to all educated adults, regardless of whether or not they are economists or day-traders, why these prices are going up.
We are all taught in school, well before our college-age years, of the law of supply and demand. Assuming that demand remains constant, when supply goes down, prices go up; when supply goes up, prices go down.
With two very, very heavily populated nations called China and India increasing their demand for energy and, hence, oil at a ruthlessly fast rate as they move their societies into the prosperous capitalistic model of doing business and become technologically savvy, oil supplies and the prospecting for places from which to get new supplies are having great amounts of stress placed on them. This stress on those resources is unprecedented on a global scale (as is the amount of wealth being created and enjoyed on a global scale).
This stress is predominantly what is driving up oil prices, and hence driving up gasoline prices. There are some other factors, too–the weakened U.S. Dollar (all oil the world over is priced in Dollars), the fact that most of the world’s oil supply is owned and controlled by governments and cartels instead of private enterprise (which makes for less responsiveness to market forces), the hypersensitive oil futures traders on the floor of the New York Mercantile Exchange all play their role in driving up oil prices. Prices at the gas pump are further driven up in the United States by state and federal taxation–as a matter of fact, the governments make significantly more money per gallon of gasoline than ExxonMobil or Chevron or any of their ilk do.
But, mainly, it’s supply and demand. Indeed, the cartel factor and the futures-traders factor are affected by the same supply and demand, at least to an extent.
Meanwhile, the oil companies themselves are only enjoying the smallest profit margins on each ever-more-expensive barrel of oil sold. They are enjoying the MSM’s beloved bete noire record-high profits only because volume of sales are up to record-highs, in the same way that a Target or a Wal-Mart rakes in the dough even while selling the same merchandise for less than others do.
But none of this is good enough for the ranters and ravers on the Left or their puppet messiahs in the MSM. Why not? Because people are angry at sharply rising gasoline prices (which could have been greatly mitigated if the U.S. Congress had permitted appropriate action to be taken years ago) and, in the great drama of day to day existence, people need something to react to emotionally. What this means for most of them is that they need to be able to point the finger of blame at someone.
And who else to point it at but the wicked, vile oil companies? After all–they’re making money while we’re losing money! (If these same ranters and ravers would shut up and learn how to invest their money more wisely, they, too, would be making money if they held any number of different oil and gas stocks.)
The reason why people either ignore the law of supply and demand or fail to point their cursing finger of blame at the one right entitity that deserves a goodly share of it–the federal government–is because the media messiahs that play on their fears are working for the aforementioned federal government and it is their j-o-b to aid and abet the federal government in pointing its authoritarian finger back at the wicked, vile Big Oil businesses.
The federal government knows everything and is not ever wrong. If it ever seems fallible or to be wrong, then it must be because of the sinister machinations of somebody else.
Now, all of this is played out with intense drama in the media, and the resultant hero vs. fire-breathing dragon tale is so mesmerizing to the vast majority of people that they just find it much more entertaining than the very dry and unemotional tale of some law of supply and demand.
Can’t they just repeal that tiresome law, anyway?
At any rate, just as exciting is when the wicked, vile Big Oil heads have to show up before Congress to be shaken down again, and the blame-passing fingers of Congressmen become the scolding, wagging fingers that vow to force those snakes to give the people what they deserve!
That is why a true slithering snake like Barry H. Obama gets people to swoon and cheer when he goes into his overly studied southern Baptist preacher’s drawl and raises his hand high in righteousness and declares that yes, he will make the oil companies pay their fair share (as if they don’t already pay more in taxes each year than most Americans dare to dream of earning in their lifetime)! It’s not because he’s righteous nor because he is appealing to facts or truth.
It’s because he’s a pop star.
Pop stars, even the ones who have talent, do not make great music. They just hit their fans and listeners in a soft place: their unexamined emotions.
This is what politicians do, and those who do it better are those that get the vote. Votes that keep the power in their hands are what matter most to them; not truth.
Barry H. Obama and all those in the Congress who keep doing the shake-down on Big Oil don’t want to tell you that all increased costs to corporations just re-appear as higher prices for consumers. Every time politicians raise taxes on business, it is the private consumer who foots the bill. The politicians don’t care, however, because their j-o-b is to fill their coffers. More money, more power.
Make people think they’re thinking, and they will love you. Make people really think, and they will hate you.
If you, dear reader, talk the law of supply and demand in the same breath as oil and gasoline prices, be prepared to be laughed at, ridiculed, ignored, and yes, hated.
But at least you’ll know you’re telling the truth. And a few others will, too.
For shame those few others aren’t our leaders.