OT - Gas to hit 4.00

Shane Hathaway shane at hathawaymix.org
Wed Aug 31 22:45:00 MDT 2005


Andy Bradford wrote:
> In this case, if the price of crude oil goes to high, and hence the cost
> of producing gasoline which gets passed on to the consumer, the consumer
> will react by  purchasing less or finding alternatives.  If companies in
> this business  want to stay competitive,  they will be forced  by market
> forces to  become more efficient  or go out  of business. If  this means
> raising the capacity, so  be it. No one is forcing  consumers to buy oil
> based products.

*Inertia* is forcing consumers to buy oil based products.  People 
already live in one place and work in another, and it takes a long time 
to change employment or move to a new house.  A lot of people are 
already living at the edge of their income.  If the market changes too 
much too quickly, many will fall into poverty, simply because they can 
no longer afford to commute.

Thus if you don't want people to starve, you need to have someone 
regulating the market to a certain extent.  Otherwise real people fall 
through the cracks.

> I tend to  disagree on this point.  I think the market  reacts much more
> quickly and deftly than any bloated governmental institution can do.

Yes, but sometimes quick change is exactly what you don't want.  You 
need someone with authority to react and smooth things out.  Case in 
point: the 70 foot crater on highway 6 that got repaired in days... by 
the government.

Shane



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