Quote :

"Tell me, what happens to prices when demand rises while supply stays the same? "

It shouldnt matter according to you. People will clearly pay 3 dollars a gallon. Wasnt that long ago we were paying 88 cents. Do you think 88 cents was the highest price they could get?


BTW, the current rise is based on speculation. So as the price per barrell has increased, rapidly, the costs are then passed on to consumers in the form of higher gas prices.

Remember when gas prices went up and airlines started charging fuel surcharge for the increase. I guess they werent passing along the increased expense either?

2/22/2011 4:55:07 PM

2/22/2011 5:01:10 PM

Str8Foolish, your graph of production ends in 2008, the year production began to increase.
Your graph for consumption ends in 2005, the year consumption leveled off.

Me-thinks you have cherry-picked your dates to produce the graphs you wanted to produce.

Quote :

"Tell me, what happens to prices when demand rises while supply stays the same?"

Economists world-wide join in calls for the government to scrap its regime of price controls.

2/22/2011 5:16:48 PM

Quote :

"Are you saying that people should only receive money if they earn it?"

No, they should receive money if they earn it or it is voluntarily given to them. There's nothing voluntary about taxes.

The warped view held by statists is that tax revenue is a good thing, and if there's a deficit, the problem is not enough revenue. Revenue is a bad thing when it's collected by the state. The world's worst atrocities have been funded by tax revenue. Some of the most crippling economic debacles have been subsidized by taxpayers.

Pumping money into a perpetual warfare/welfare economy always ends in catastrophe. You're watching it happen, except instead of trying to end it, you're cheering the process along.

2/22/2011 5:19:49 PM

Quote :

"Str8Foolish, your graph of production ends in 2008, the year production began to increase. Your graph for consumption ends in 2005, the year consumption leveled off."

And you provide exactly zero graphs to prove either of these assertions

2/22/2011 5:24:14 PM

Blah blah blah destroyer shut the hell up nobody wants to hear you whine about Statists seriously that shit is so old and it's the same rant every single time.

"Herp Derp it's wrong to receive money you don't earn, unless it's a gift from your dad. Welfare is bad because people shouldn't get free money unless they're born into a rich household." - You, trying to make sense

[Edited on February 22, 2011 at 5:25 PM. Reason : .]

2/22/2011 5:25:14 PM

Yeah, ignore what I said, just like you ignored the first part of my other post. I mean, reading over what you've said, it's not possible to overstate how ignorant you are. Businesses already charge as much as they can, therefore tax hikes aren't passed onto consumers? Are you fucking nuts? Seriously, no school of economics would go along with that. Just...stick to things you understand.

2/22/2011 5:36:11 PM

If only some form of searching type engine existed to fix your date picking problem...Oh wait!


This graph I found is friggin' awesome, BTW. It fixes the silliness of your assertion that consumption and production don't on average need to match each other, as there is only so much inventory space available to store oil.

2/22/2011 5:40:59 PM

Okay Loneshark let's read this graph together. My assertion that you challenged was that the rise of gas prices is a result of consumption outpacing production. The graph you posted is great, it gives us everything we need to test this. It shows consumption, production, and price rising mostly together for large portions of it, but there's a very peculiar and very gigantic spike around 2007-2008. First, the graph and YOUR counter-assertions:



So you claimed:

Quote :

""Str8Foolish, your graph of production ends in 2008, the year production began to increase."

I don't know how you're looking at this graph, because I see a net drop in production from 2008 to 2009, a slow recovery throughout 2009 to meet average of the prior 5 years, and a slow climb in 2010 that is just now clearing the record set in 2008.
Overall, the average production increase from 2005 to 2010 was barely 3Mbpd. Compare that to the prior 5 years, which had an increase of roughly 10Mbpd. Production has been stagnating since 2005.

Quote :

"Your graph for consumption ends in 2005, the year consumption leveled off.""

The graph shows consumption rising for 3 additional years until 2008, at only a slightly slower pace than the preceding 5. Consumption outpacing production while prices skyrocket, who'da thunk.

From 2005 onward, we see consumption and production slowly diverge, and once consumption exceeds production the prices fucking skyrocket as high as they can take it (even as production temporarily jumps) until consumers react in 2008 by cutting back. After the declining consumption becomes a trend, prices drop 50% to where they were 4 years prior to encourage more consumption. After consumption resumes, prices start rising again as the sellers return to inching up their price ceiling. Consumption rises while production stagnates, and prices rise, just as I said.

2008, by no coincidence, was the year Exxon pulled in $45 billion in profits, breaking the world record for every company ever. Pretty unbelievable if you believe they were increasing prices so they could stay afloat.


This ties into airplane fuel surcharges as well. These charges have remained at many airliners long after oil prices stabilized and even dropped in the last year, and there's huge discrepency between various airlines as to just what their fuel surcharges are. There's also been public outcry, and many have dropped fuel surcharges altogether as a result and bumped up ticket prices (but not by as much). So are airlines really basing fuel surcharges off the cost of oil, despite them reacting inconsistently to changes in its price?

Or is the public perception of a crisis an easy opportunity for a business to raise prices far in excess of the actual increase in expenses and thus expand their profit margin? It's cozy to think that they're giving us great deals, competing with each other, and only raising prices so they don't operate at a loss. Consider that they are raising prices to preserve a profit margin, and in some cases increase the margin if the public swallows the justification for it. When the public calls their bluff, as in the consumption drop in oil in 2008, they readjust to find the point where the public again feels it's a just price, not because operating costs suddenly drop for no explicable reason. This is basic supply and demand, the cornerstone of market economics, and yet you guys are cherishing the naive fantasy that companies never collude or price fix, and prices are an addition of a reasonable margin to operating costs.

Funny enough, we're not even talking about taxes anymore, but business expenses. Of course these things change the lowest possible price, but corporate income taxes don't raise the cost of production, they cut the profit margin, as they are enacted on net income after business expenses. Further, as I've stated and now shown, expenses only make up the lower bound of a price range, whereas the upper (and hence the one you see on the shelf) price depends entirely on how much the customer is willing to pay for a product, a combination of their need and their belief that the price is justified.

Why do cell phone companies mark up text messages by 1000+%? Because they can and you'll pay it because most of you don't know better. Meanwhile, they add services to your phone for web, streaming music and video, transmitting the equivalent of thousands of texts per second, and the best explanation for the high cost of SMS someone can come up with is "Well they're paying lots of developers and tech support" for a service with trivial operating costs that hasn't changed in 10 years? What are you smoking??

I mean it's one thing to be a free market enthusiast and argue competently about it, I can deal with that. But some of you don't even understand how the basics of supply, demand, pricing, and income tax work. I mean really, do you look at that graph and think "Well, apparently operating costs and taxes shot up in 2007 then fell dramatically in 2008".

On top of that, you'll pull all kinds of shit out of your mouths to defend the people who scheme each and every day to find novel methods and excuses to make sure you and your money are soon parted. LoneShark, you challenge my assertion (and reword it considerably, I might add), then make two more assertions, then provide a graph that shows both of your assertions totally wrong and mine to be correct. Remember when gas was $4 a gallon in 2008? Why is it back down to ~$3.25? Because the conditions that caused the spike which I explained (consumption goes up, production stays the same) have temporarily subsided and consumption is still lower than it was then.

Rahm maybe be famous for saying "Never let a crisis go to waste" but the truth is that he probably learned it from a businessman.


Anyway, I tried to cram responses in for at least 3 of the people piling on me right now. I can't keep it up so I'm gonna prioritize whoever's actually cogent.


[Edited on February 22, 2011 at 9:26 PM. Reason : .]

2/22/2011 9:18:13 PM

Quote :

"So you claimed:"

In the graph shown there are two modes of operation for the oil market. The normal mode has OPEC operating with surplusses, controlling prices by producing less than they can but enough to fulfill demand at a comfortable price for them. The second mode is when demand outstripped OPEC's ability to produce oil, as occurred in 2008. OPEC temporarily abandoned their quotas and produced as much oil as their dysfunctional regimes could manage, to no avail, as prices were forced to rise to quash demand. However, this period came to an end as non OPEC supply increased and oil demand fell in the recession. As of 2009 and on OPEC is again restraining production to maintain current prices.

Quote :

"Because they can and you'll pay it because most of you don't know better."

As a proud capitalist, I am fully aware that prices have nothing to do with costs. But I do keep in mind that this operates both ways. Yes, oil companies are and will continue to profit mightily from current market conditions. And back in 1998 when the price of a gallon of gasoline collapsed to $0.37 a gallon ($0.89 after taxes) they ran huge losses and many oil companies lost their shirts, including Saudi Aramco.

The market price system succeeds at allocation resources by punishing Exxon in 1998 and then rewarding Exxon in 2008. It can work better if not for Government intervention, particularly in Saudi Aramco. But the question is, why are you not happy with it? What system would you prefer and how would that be better?

2/23/2011 5:48:06 AM

Quote :

"The normal mode has OPEC operating with surplusses, controlling prices by producing less than they can but enough to fulfill demand at a comfortable price for them. The second mode is when demand outstripped OPEC's ability to produce oil, as occurred in 2008. OPEC temporarily abandoned their quotas and produced as much oil as their dysfunctional regimes could manage, to no avail, as prices were forced to rise to quash demand. However, this period came to an end as non OPEC supply increased and oil demand fell in the recession. As of 2009 and on OPEC is again restraining production to maintain current prices. "

This may have in fact been what happened, but you aren't reading that off the graph you posted. Entirely too noisy. If I really try to glean something then the rise to $100 makes sense from 7/06 up until ~10/07, but from that point OPEC increased production and demand started to plateau so the price should have started to level off...instead, it went nearly parabolic. At the worst of it, it looks like maybe a 3-4 million barrel per day undersupply...but I thought I read somewhere that the world oil storage capability is near 100 million barrels? This should have blunted the shock.

2/23/2011 6:32:00 AM

Quote :

"The People’s Budget Budget of the Congressional Progressive Caucus Fiscal Year 2012 The People’s Budget eliminates the deficit in 10 years, puts Americans back to work and restores our economic competitiveness. The People’s Budget recognizes that in order to compete, our nation needs every American to be productive, and in order to be productive we need to raise our skills to meet modern needs. Our Budget Eliminates the Deficit and Raises a $31 Billion Surplus In Ten Years Our budget protects Social Security, Medicare and Medicaid and responsibly eliminates the deficit by targeting its main drivers: the Bush Tax Cuts, the wars overseas, and the causes and effects of the recent recession. Our Budget Puts America Back to Work & Restores America’s Competitiveness • Trains teachers and restores schools; rebuilds roads and bridges and ensures that users help pay for them • Invests in job creation, clean energy and broadband infrastructure, housing and R&D programs Our Budget Creates a Fairer Tax System • Ends the recently passed upper-income tax cuts and lets Bush-era tax cuts expire at the end of 2012 • Extends tax credits for the middle class, families, and students • Creates new tax brackets that range from 45% starting at $1 million to 49% for $1 billion or more • Implements a progressive estate tax • Eliminates corporate welfare for oil, gas, and coal companies; closes loopholes for multinational corporations • Enacts a financial crisis responsibility fee and a financial speculation tax on derivatives and foreign exchange Our Budget Protects Health • Enacts a health care public option and negotiates prescription payments with pharmaceutical companies • Prevents any cuts to Medicare physician payments for a decade Our Budget Safeguards Social Security for the Next 75 Years • Eliminates the individual Social Security payroll cap to make sure upper income earners pay their fair share • Increases benefits based on higher contributions on the employee side Our Budget Brings Our Troops Home • Responsibly ends our wars in Iraq and Afghanistan to leave America more secure both home and abroad • Cuts defense spending by reducing conventional forces, procurement, and costly R&D programs Our Budget’s Bottom Line • Deficit reduction of $5.6 trillion • Spending cuts of $1.7 trillion • Revenue increase of $3.9 trillion • Public investment $1.7 trillion Further Links The People’s Budget Online: http://www.thepeoplesbudget.org Official CPC executive summary: http://grijalva.house.gov/uploads/The%20CPC%20FY2012%20Budget.pdf"

10/19/2011 6:08:58 PM

Quote :

"Trains teachers and restores schools; rebuilds roads and bridges and ensures that users help pay for them Invests in job creation, clean energy and broadband infrastructure, housing and R&D"

and probably doesn't even begin to try and pay for any of that.

Quote :

"Ends the recently passed upper-income tax cuts and lets Bush-era tax cuts expire at the end of 2012 Extends tax credits for the middle class, families, and students Creates new tax brackets that range from 45% starting at $1 million to 49% for $1 billion or more Implements a progressive estate tax "

Soak the rich! Class warfare at its best.

Quote :

"Eliminates corporate welfare for oil, gas, and coal companies; closes loopholes for multinational corporations "

But keeps it for other corporations that liberals love.

Quote :

"Enacts a financial crisis responsibility fee and a financial speculation tax on derivatives and foreign exchange"

Great, a new tax that everyone gets to pay!

Quote :

"Enacts a health care public option and negotiates prescription payments with pharmaceutical companies "

Great, more gov't meddling in healthcare. More of the problem will definitely fix it this time!

Quote :

"Prevents any cuts to Medicare physician payments for a decade"

Great, let's ignore the elephant in the room and not even try and fix anything.

Quote :

"Eliminates the individual Social Security payroll cap to make sure upper income earners pay their fair share"

Great. Now Bill Gates gets million dollar SS checks!

10/19/2011 7:40:20 PM

Quote :

"Str8Foolish, your graph of production ends in 2008, the year production began to increase. Your graph for consumption ends in 2005, the year consumption leveled off. Me-thinks you have cherry-picked your dates to produce the graphs you wanted to produce. "

I don't get it. How can you make two statements that are blatantly fucking wrong, provide a graph yourself that proves them wrong, then go on to argue as though you didnt' just make a fool of yourself.

Are your conclusions even related to the "facts" in your mind, or do you just extrapolate backwards from what you believe must be true? I'm just amazed that somebody will trot out their best arguments (I'm assuming you don't open with your worst ones), see them proven factually incorrect, then carry on anyway with no reevalatuion of the conclusions you made earlier based on those counter-factual assertions. Maybe I'm just weird but when I make a conclusion, based on something I believe to be a fact, and that fact is proven wrong, I don't double down but instead shut up for awhile and rethink the conclusions I had made.

10/21/2011 1:26:58 PM