Further Reflection on Gasoline Prices III

Posted: June 3, 2007 in Costs of living

I am reminded, once again, of my soap box rant about how foolish it is for people to rail against rising gasoline prices; but refuse to park their cars and use public transportation. What really causes me to pause is the realization – which I’ve had before – that as people reduce their driving and take public transportation, gasoline prices will increase even faster because the gas companies would escalate price increases to make up for declining use in order to maintain profits. The result would be unfair cost for those who can not do without using their private automobiles. Also transportation costs for delivering goods we all purchase increase thus adding to the cost of those goods.

However, our arguments for decreasing gas usage are reinforced by: there would ultimately be a force towards alternative sources of energy that might soften the tendency towards spiraling prices. There is also the probability that oil companies will become energy companies to maintain their profits. In that case oil won’t be as much a factor as it would if we were really locked into fossil fuels. As a matter of fact BP (British Petroleum) is already doing this according to advertisements. In their advertisements they use the phrase Beyond Petroleum to signal a move towards diversified energy sources.

Amended on Saturday, June 2, 2007

Recently I heard (or read) that Democrats are pandering to constituents’ yelling about gas prices by calling for investigations and denouncing petroleum companies and their obscene profits. Welll… If one takes a more objective approach and thinks: Just what do you expect in a capitalist society where maximizing profits is the main motive to conducting business? In fact, when I was working for a publicly traded company the CEO conducted talks with each and every person at the corporate headquarters (100 people at a time so as to provide the opportunity to give him feed-back – with guarantee that no recriminations like getting fired will befall anyone who speaks up no matter what they say); and he said that he is obligated by law to do everything he can to maximize profits. This was an apology for riffing most of the vice presidents; but it was also a lesson in corporate economics 101. So, if maximizing profits is mandated by law, then why do we rail against companies who do so? Isn’t it jus so much political b. s.? Shouldn’t we eschew bromides about obscene profits; whether they are about gas or companies?

The fact that we are often reminded that the public aren’t slowing down their driving habits in response to rising gasoline prices should tell us that a lot of alligator tears are being shed about this awful phenomenon.

I saw an article calling John Edwards an ambulance chaser (gasp!). Wouldn’t that be consistent with pandering to a potential electorate that is yelling about gasoline prices and refusing to do anything about it?

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