Clav,

You say that the funds raised by your proposed $2.00 gasoline tax increase (I assume you include diesel fuel as well)

can either be returned directly (and immediately) to Americans in the form of a reduction in payroll taxes, or used exclusively for research and development of viable renewable fuel sources.

No, Dan, it's not a satire.

Though I didn't say so in so many words, the proposal is predicated on the tax being legislated to be used in one of the two ways I propose, as part of the package.

All the points you raise about the impact on the economy and on Americans are valid, IF one assumes that the $2 rise in the price of gasoline will remain as an increase. However, the more likely scenario is that the increase will precipitate an immediate (and huge), drop in demand, which will in turn, precipitate an equivalent drop in the price of crude, thus nullifying most, if not all, of the scenario you mention. It's worth noting that public transportation ridership is up sharply across the nation, with the recent, smaller increases in gas prices.

Your point about the reluctance of legislators to raise taxes is, I admit, the fly in the ointment of this proposal. Our cowardly, self-serving, craven legislators are, for the most part, not interested in acting in the nation's best interests above their own. Something must be done; not only to stimulate our leaders into finally taking positive, immediate action toward energy independence, but also to stop this hemorrhaging overseas of our national treasure.

Nixon proved price controls don't work in the previous oil crisis. This is an idea that, with some tweaking, at least might have a chance of working.

Dan,

One additional point:

While in general, i agree with your characterization of the government's ability to do anything well, I will point out that, in addition to the Manhattan Project, the government has two other large scale accomplishments to its credit: TVA and Kennedy's mandate to go to the moon did both succeed.

My intent, in any case, is not for the government itself to conduct the R&D, but for the private sector to do so, paid for from government funds, as in the case of the above projects.

Well, Clav

I guess it's possible. Fortunately or otherwise, I suspect that we won't know until, to borrow a phrase, they have snowball fights in Hell.

And, I still think that letting the Government have more of our money is a bad idea; once Government has it, it is Government money, to continue to collect ad infinitum and to which it is entitled for whatever it wishes to use it, even long after the original reason for collecting it has vanished.

Dan

Clav,

One additional point: Didn't Senator Clinton in her "suspension" speech today urge Senator Obama to campaign for higher gas taxes? I thought I heard something along those lines, but maybe my sometimes fuzzy internet connection was at fault and it was just her reference to the glass (sounds sort of like gas) ceiling.

Dan

Dan,

The price of gasoline is going up, regardless.

If, as many experts predict, we will be paying $6 for gas by Labor Day, why not keep those two bucks here at home, instead of sending them overseas? Our money in the government's hands, which I agree is less than ideal, is better than in the Arabs' or Russians' hands.

With the two bucks tax (and subsequent adjustments as needed) we can also set a price floor ($4 seems sustainable) on gasoline, thus ensuring that demand won't skyrocket as the producers lower prices, which they inevitably will, thus also preventing future rapid runups in price.

Remember that payroll taxes include income tax, which even non-working retirees pay, not only on their SS, but also on interest and dividend receipts. Stability in fuel prices would probably also lead to increases in employment, as the economy stabilizes.

I wish I could sell my house and move closer to work. I was relocated to a cost center 60 miles away in 2006. Couldn't sell my house and now I'm stuck. 6 bucks a gallon might force my hand to strike a retirement deal, which would relieve the 100+ dollars per week I'm spending on gas.

But that's just top-of-head thinking. I drive by a HUGE coal yard on the way and back from the job. It sure smells good. I wonder if 60 per barrel fuel made from coal would make me feel any better. Or... as the pundits cajole the folks from the coal regions.... put those people back to work in an industry that would benefit those regions?

Hmmm... pehaps it's a great left wing conspiracy.

There is no doubt we have the resources. Grain is rising in cost (thanks W) along with transportation fees, leaving us feeling the pinch and more places than just the pump. Viable resource? It takes energy to leverage those. Petroleum is THE most effecient energy source, bar none. Even OPEC stated that the costs are they find reasonable is around 60 to 75 bucks per barrel.

Are you sure it's OPEC and not the speculators?

Weren't there measures in place to shelter the price of energy from speculation? What happened to that? One doesn't have to look too far into the past to realize that lobbying efforts lifted those sanctions for the "good" of corporate profits.

Six bucks per gallon. I'm about to puke, and I'm running a effecient auto...

Now... let me qualify myself. after 32 years in the job market, it was only until 2003 that I was taken away from a metro area rich in alternative means of getting to and from work. I can't move back there (WashDC) as I can't sell the abode.

Before relocating to a different cost center I was a scant 13 miles from the job site... now I'm 62 miles. This is getting ugly.

My wife and I are already carpooling to work most mornings, even though we would be able to afford the predicted hike without too much pain.

I'm also considering commuting by bike one or two days a week as well, although this is primarily for fitness reasons: it wouldn't save us any gas, as my wife would still drive herself.

Your suggestion is interesting, Clav, although I think it has zero chance of being adopted. As you observe, the gas companies are taking the flak from the public at the moment because they are the visible face of the oil industry. Most of these consumers are not going to appreciate the 'long game' behind any new tax - it would simply be perceived as adding insult to injury. In an election year, no politician is going to go kamikaze like that.

So - assuming there won't be the new tax and consequent benefits you suggest - what do you think will actually happen?

Clav,

You missed the major role that investors play in increasing prices. The market is playing the most significant role at this point.

Simple, Doc,

The price will continue to escalate to the point OPEC will notice that they're losing billions due to low demand; they'll reduce the price, demand will begin to climb again, even to the point of SUV sales reviving; little to nothing will be done about alternative fuels and the entire cycle will start all over again, just as it did from the seventies, until today.

MEANWHILE: In the name of Jesus of Global Warming (Amen! Hallelujah!), stringent emission reduction measures will be proposed (some will even be passed) and imposed on the public and the auto companies, cap-and-trade (already in the works) policies will be adopted (these are a more surreptitious tax - more palatable to the pols, and easier to fool the public), and still the price of gas will be controlled, but by OPEC, not us.

For a while (probably too long), emphasis on alternative fuels will once again fade away with the lower oil prices, until they (inevitably) climb back up again. The energy (read oil) companies will continue to work on developing alternatives, but won't release them until economics dictate their release.

As long as OPEC controls the prices, it will continue to manipulate the market until all the oil IS nearly gone, decades from now.

And John Q Public will continue to pay - through the hose...

Well, maybe, Clav.

Economic cycles come and go, but for me there is a subliminally apocalyptic feel to the current situation. I expect there was in 1973, as well, although I was too young to remember anything except the power cuts.

For many of the OPEC countries, oil is their only natural resource and the source of all their wealth. As it starts to run dry, you can't really blame them for wanting to rein in supply a bit while they figure out what to do when it's gone completely.

As an object lesson in what happens when a nation's only natural resource is exhausted, I'm sure Saudi Arabia, Kuwait, the UAE and the rest of the oil sheikhdoms have paid close attention to the fate of Nauru.

Well, Doc, obviously I can't speak to your personal apocalyptic feelings, but I think any related to the oil bidness are more a product of the arcane art of selling newspapers and air time than anything else.

I am old enough to remember 1973 very well. There was a similar thread of alarm running around the land back then as well, but if memory serves, the worst economic damage was done by Nixon's hamhanded attempts to control prices by fiat, not the "crisis" in the oil industry.

The story about Nauru is a sad one, but I'm not sure how much of a parallel can be drawn between that tiny speck and the Middle East. The Arab countries are significantly more advanced and sophisticated than the islanders appeared to be; look what Dubai is doing with their petrodollars, for example.

That said, there is a lesson there for the unwary among oil sellers. Mexico would be well advised to take heed of the plight of Nauru; their oil production is already slowing down, and my countrymen, sadly, seem to be doing little about it so far, except for squabbling among themselves.

Mr. Chavez, as he spends his billions shoring up his faltering client nations, might want to pause and think about the Nauruans, as well.

I see smoke and mirrors here. Trying to palm off billions of profit by using a tiny number for it- 7.6 percent is an obscene old and tired trick that no one's buying any more.

If they cut their profits in half to say 4 percent, their bottom line would still be healthly in the green by hundreds of millions.

They're so profitable because they're not building refineries, they're not building refineries so that there's a gasoline shortage which makes them obscene profits under "supply and demand" why would you do something to bring down the price of gasoline, unless you knew it helped your bottom line?

And the old excuse that the tree huggers are keeping them from building new refineries is getting old too.

With all that oil real estate in the Taxas vast wasteland, there must be hundreds of places to build one that no one would object to.

Dubai has rightly identified and is already exploiting tourism as the answer to her future survival and prosperity. Qatar is following suit. Saudi Arabia will probably be all right, as well, as one of the Five Pillars (Hajj) gives her an automatic and massive tourist industry.

But Kuwait, Oman, Bahrain and all those other little countries that haven't got much else to offer but sand should be worried.

While you're at it, try re-reading my article of a couple years back that all of you have been pointedly ignoring, and then ask yourself-where's all that Iraqi oil going?

Iraq has one of the biggest oil reserves in the world, but once we had control of it, the big oil companies in Houston prevented Bush from making a hero of himself by having it released onto the market-vastly lowering the price of a barrel of oil... which would vastly lower their profits.

What would happen if that oil were to hit the market? We sure as hell wouldn't be paying millions a day on a war in Iraq. Shit, Iraqis would be the richest people in the world right now.

Control of that huge amount of oil is sitting in several vest pockets in highrises all over Houston right now, which is where it'll stay until oil hits $200 a barrel.

Maybe they're holding out til just before the election to make Bush (and by proxy McCain) a hero?

I'm laughing now, because everyone thought I was a nut for writing this paragraph two years ago...

To see where the US went wrong, read "The Forrestal Diaries." Back in 1947, Forrestal predicted what would happen to the price of oil if the US didn't act in its own best interest.

If Americans still don't get it after 60 years, there is no hope.

As a result, the lights will soon go out.

Well, Jet,

You may not "buy" the 7.6 number, but nonetheless, it's a matter of record, easily verifiable by anyone with a modicum of access to statistics on the internet.

As for the difficulty in building new refineries; that, too is a matter of record. Here's an excellent 2005 NYT article which clearly explains the various reasons (chief among them: difficulty in obtaining permits and locations, and costs) why no new refineries have been built in the US in more than three decades. The article also notes that despite the lack of new refinery construction and many closures of outmoded facilities, existing facilities have been modernized and upgraded to the point that, even in the face of a 45 percent increase in demand (as of 2005, when the article was written), the gasoline shortfall is only 10 percent and is met by importing gas from foreign refineries.

The reason that oil companies are enjoying record profits (not record margins) is volume. Demand for oil and its byproducts has never been greater in the history of the industry.

The reason prices are currently so high is because the producers (both OPEC and non-OPEC) are manipulating the market to force prices higher, as are the speculators in the futures markets.

"Iraq has one of the biggest oil reserves in the world, but once we had control of it..."

We don't.

Bush has made a point of leaving the oil fields under the control of the Iraqis, precisely to avoid criticism such as yours.

Iraq, as an OPEC member nation, follows OPEC pricing.

Why are so many countries paying more per gallon that we are? The short answer is "we're not" tecnically...

The tax on a gallon of gas in the United Kingdom in 2003 was $3.40, bringing it to $5.89 a gallon!

I'm sure that figure is much higher by now, but compare what they were paying in 2003 against what we were paying at the same time...


In the U.S. in cents we have.
Alabama 39.4
Alaska 26.4
Arizona 37.4
Arkansas 40.1
California 50.4
Colorado 40.4
Connecticut 48.1
Delaware 41.4
Dist. of Columbia 38.4
Florida 48
Georgia 30.6
Hawaii 53.5
Idaho 43.4
Illinois 48.4
Indiana 36.5
Iowa 39.5
Kansas 42.4
Kentucky 39.8
Louisiana 38.4
Maine 41.9
Maryland 41.9
Massachusetts 39.9
Michigan 44.6
Minnesota 38.4
Mississippi 37.2
Missouri 35.4
Montana 46.2
Nebraska .8
Nevada 51.7
New Hampshire 39
New Jersey 32.9
New Mexico 36.4
New York 48.7
North Carolina 40.8
North Dakota 39.4
Ohio 40.4
Oklahoma 35.4
Oregon 42.4
Pennsylvania 45.1
Rhode Island 49.4
South Carolina 35.2
South Dakota 42.4
Tennessee 39.8
Texas 38.4
Utah 42.9
Vermont 38.4
Virginia 37.3
Washington 41.4
West Virginia 43.8
Wisconsin 49.5
Wyoming 32.4
U.S. Average 42

As you can see, it's not our fault that in other countries, they pay waaaaaay more than us!

Originally Bush's plan was to invade Iraq and release its huge oil reserves to the world market, plummeting oil prices, and then breaking the back and sabotaging the stranglehold that OPEC has on the world market. Bush would be a hero after gasoline prices dipped back to or even below a dollar a gallon, the economy would explode when Americans suddenly had more buying power, and GW would probably have a giant "Saddamesque" statue erected of himself in national mall that would rival the Washington Monument.

Why was the plan sidelined in 2003?
Bush needed/wanted/craved/coveted reelection in 2004, and, without big oil's financial backing, that was simply not going to happen. Can you imagine the outrage in Houston when they caught wind of the White Houses' plan? They weren't about to let "good ole' boy" Bush interfere with their own plans to completely suppress Iraq's oil reserves, because if they were released, those record-breaking, obscene, and unimaginable oil company profits that everyone's so outraged about lately (except rich Republican stock holders that is) would evaporate in mid air; that's why!

I always understood the higher prices for gasoline in Europe were caused by the fact that they have way, way less refineries than we do.

They do have a minuscule number compared to us, but whether it actually is the reason for the higher price is something I heard when I was there.

I bought the percentage Clavos, reread and you'll see that. I'm saying that (had you read that far in the comment before posting you comeback) that that 7.6 could be halved and they'd still have hundreds of millions in profit.

As for problems building refineries, if you put a referendom on November's ballot saying that if we approve a couple new refineries being built to lower the price of a gallon of gas back to the obscene level of $2 a gallon, it'd win by a landslide.

The truth is no refineries are being built, and they're not even trying to, because any excuse to keep the supply of refined gasoline low, is a good one, regardless of how flimsy.

Actually, Cindy, Jet is correct. The chief reason they pay more than we do is that they have much higher taxes on petroleum distillate products than we do.

Cindy Europe is paying dollars on the gallon tax-We're paying cents on a gallon of gas. it's that simple

"that 7.6 could be halved and they'd still have hundreds of millions in profit."

Sure, Jet, but why should they? 7.6 percent for the amount of risk they take is a reasonable profit; many other industries (manufacturing, e.g.) have higher profits with lower levels of risk.

And BTW, I read your comment completely before I replied. I didn't address that point because I saw no reason to.

No politician in his right mind would try to raise our federal tax on gasoline, it'd be career suicide..

Ther was an "under the table" deal where the U.S. government would up the tax per gallon by .75 or more, and they'd also increase the kickbacks that big oil is getting to keep them from complaining.

Big oil got their kickbacks

need I say more?

Risk? what risk?... no this should be laughable.

They have billions of dollars a year profits to protect them from this so-called risks.

The call it a golden umbrella

Do quote Doc "How did this get published without it being labeled a satire?"

thanks for the info (Jet, Clav), i will update my databank

A profit is something you can stick in your pocket AFTER expenses.

That's after paying the payroll

That's after banking funds for replenishing on-hnd stock, and shipping.

That's after taxes

That's after paying for speculating new oil sources

That's after repairing equipment like after Katrina.

That's after paying insurance against unforseen "riscs" like a tanker breaking in half so that it doesn't come out of their bottom line-it comes out of some insurance company's

And it still totals multi-billions of dollars Clavos, and you can't candy-coat that.

After all that, of course there's the tax breaks from the government (us) too.

Other than that, the article was a rather enjoyable read Clavos... It's been a long time since I've laughed that hard...

XXXXXOOOOOO :)

Great idea, Clav. Liked it even better when I proposed it 2 years ago, but you put it well and it takes even more courage to suggest it now when prices are already high. My goal was to raise prices to the $5 range, but if we could get it up to $6 or more then we'd really see some progress from the private sector with solutions to our fuel problem.

I do think a good portion of the tax ought to go into improving public transportation infrastructure. In a lot of the parts of the country where people drive a great deal it's at least partially because the public transportation sucks. To go from my house to locations in north austin requires a 5 minute drive to the nearest bus stop then a 45 minute ride to the only bus route intersection which is way down in south austin and then another 45 minute ride from there to north austin. An hour and a half to travel 15 miles, a trip that would take 20 minutes by car.

Dave

I left my job of five years working for a man that I love as a son, because he is moving 25 miles south of our offices, changing a 15 minute commute EACH WAY to 1:20, adding a little over 10 extra hours on the road in a week and a huge increase of miles. I am very sad about it. Cosidering I am 51 without a college degree, trying to get a job in the construction industry in Las Vegas, NV is insane/ It is insane to quit, but I do like to have enough money left after rent and gas to buy food and medicine, I cannot do so at the gas prices at the end of May. Luckily I found a job not far from home. Im still concerned about fuel prices, but if it gets too awful, my new boss said I could telecommute 2 of 5 days, wich would definietly help.

Dave,

The tragedy is that, had such a tax been enacted just two years ago, our situation today would likely be much further along the road to complete independence from OPEC.

Instead, we've got the clown congress in DC enacting such worthless ideas as new CAFE standards for 12 years in the future, and seriously debating a cap-and-trade tax (S. 2191) that will likely significantly exacerbate our economic problems in exchange for an inadequate reduction in carbon.

In reality, those most responsible for high prices are the oil owners; nations such as Saudi Arabia, Iran, and others in the Middle East, and Venezuela in our own hemisphere. They enjoy unimaginable riches; riches which have come primarily from the USA and Europe, and there is no end in sight to this unprecedented transfer of wealth....

As the base prices have risen inexorably, thanks to the greed of the producers, speculators have begun to play an increasingly influential (and detrimental) role in pricing.

This is a really funny stuff to hear from the mouth of a capitalist. Are these neutral assertions Clav? I mean you aren't blaming oil owners or speculators right? Is it just my inference? It's too subtle to tell.

So, we have the market (of which the owners of oil are a part) which is responsible for high oil prices, and which in another fashion (via speculators) is exacerbating the problem. We have the solution, which will certainly deeply harm the economy and likely push more Americans into bankruptcy. All this will be happening while the market (which is really sort of god to some people) saves us.

Great system. Waiting for the market to decide when to act is like waiting until your house is on fire to invest in an extinguisher.

With a bit of forethought (say from a government that actually puts some value in science) we would have already had alternatives in place (consider the French).

Oh, wait...did I mention "The Market" can only save us if the government steps in and punishes its citizens for what The Market failed to accomplish without government intervention?

"So, we have the market (of which the owners of oil are a part) which is responsible for high oil prices, and which in another fashion (via speculators) is exacerbating the problem."

Not quite. More accurately: "We have the owners and speculators manipulating the market, resulting in artificially high prices, which will remain so until we, the demand side of the equation, signal by our decreased demand that the price has gone too high. To date, we haven't done so to a great enough degree to convince the arabs that their prices are too high, so they keep raising them until such point that demand slows enough to reduce their revenue, even at the higher prices.

"We have the solution, which will certainly deeply harm the economy and likely push more Americans into bankruptcy."

Maybe. We'll find out for sure either way, because OPEC will raise prices to the $6 level before the end of the year. At least, if we raise them through taxation, we keep the extra revenue (and return it to the people in the form of reduced payroll taxes and stepped up R&D), instead of making the arabs even richer.

You're blaming the skyrocketing oil/gasoline prices on oil-producing nations? Get real.

It's our foreign policy, silly. Look at the value of the dollar. It's tanking. If you want prices to stabilize, we should get out of the Middle East and stop threatening Iran. We should also stop spending and start paying off our debt. We should also get rid of the Federal Reserve, which is a root cause of the situation we're in.

Oil speculators? Oil-producing nations? Ha.

"Look at the value of the dollar. It's tanking."

While the devaluing dollar has certainly had a negative effect on oil prices (as it has on virtually all imports), the price of gasoline (oil) has been rising far longer than the dollar has been losing value.

We have the owners and speculators manipulating the market, resulting in artificially high prices...

A funny thing here is that I cannot decide whether to use "flaws" or "legitimate practices" in describing manipulation in the market economy. Manipulation of the market is part and parcel of the market--we can't have it both ways. It is in the realm of fantasy to imagine some ideal market where this is not so. It is certainly not reasonable to assess the actual market as if its own flaws exist apart from it. But is manipulation even a flaw?

It is legitimate for owners to get the highest prices they possibly can, manipulation is treated as fair practice when we are considering our own internal market--even if that manipulation sabotages choices that would be better for the economic health of our population.

Look at what GM and the oil industry did with the EV1. The battery technology was withheld and kept secret (until after the cars were destroyed) so that the consumer would not be able to make a realistic assessment of the electric car. The auto industry makes a great deal of money on servicing of cars--a great deal of that money would be lost with electric cars. The oil industry's interest in destroying this technology doesn't require further comment.

...which will remain so until we, the demand side of the equation, signal by our decreased demand that the price has gone too high....

And then we will what, magically replace our infrastructure overnight? Will The Market pay for that? How much will all those people who are bankrupt be able to contribute to this demand. I guess we'll find out.

Until the oil industry gets tired of its new profits, they're just as likely as anything else to keep sabotaging our demand as they have done in the past (just look at who bought 60% of the battery technology from GM). By that time we should be in crisis after crisis.

Clavos, t5at so-called "Clown Congress" can't get anything done because they don't have enough of a majority to override a Clown president that knows they don't have enough of a majority to override his vetos, so he sabotages everything he tries to do.

What's the sense of producing an energy-efficient car that only the rich can afford?

So, Cindy, you are content with allowing the oil producers to set their own prices, instead of trying to seize the initiative ourselves, and by means of taxes we can return to the people, raise the price to where demand is diminished to the point that OPEC must react and lower their prices?

"It is legitimate for owners to get the highest prices they possibly can, manipulation is treated as fair practice when we are considering our own internal market--even if that manipulation sabotages choices that would be better for the economic health of our population."

This is essentially correct, and the best way to stop the rise in prices is to not buy the product; i.e., to reduce demand. However, the American consumer has demonstrated repeatedly that the only stimulus to which they will react to reduce demand, is higher prices.

By raising the tax on fuel substantially, we get an immediate reaction from consumers; they will consume less: by carpooling, by using public transportation where available, by consolidating trips, eliminating trips where possible, driving more conservatively (I could stand to do that; I'm a terrible leadfoot), those who can, will switch to more fuel efficient cars (Many already are; Toyota just sold its millionth Prius, and GM has seen enough of a shift in demand they're seriously revamping their product lineup, as I noted in the article).

By paying the tax back to the consumers, we reduce the pain to a minimum, while still keeping the price of fuel high and reducing demand; to bring their sales back up, OPEC will have no choice but to increase supply or simply reduce the price of a barrel; either way the price goes down, and stays down, as long as demand remains lower than supply.

According to Edmunds, the Prius, at a base price of $21,500 is only a little more expensive than the best-selling car in America, the Camry (Base $19,000).

Hardly a car "only the rich can afford," and not the only fuel efficient car on the market by a long shot; plenty of cars in the $15,000 to $17,000 range deliver better than 30 mpg.

I repeat-the vast majority of the working public can't afford-or don't have the credit to buy the fuel efficent cars. Big business and Big oil under the Bush administration has destroyed their own customers-the middle class by pricing their product out of the reach of the very people they need to buy them.

All those billions we've uselessly spent in Iraq would've been better spent giving anyone who needs a fuel-efficient vehicle a subsidy to buy one.

DAMN IT Clavos-wake up and smell the fucking coffee. The vast majority of us are rolling pennies to fucking put gas in the 15-year-old rustbuckets we can barely afford now.

ARGUE THAT POINT AWAY

We can't afford a god-damned $70 tank of gas, where the hell do you think we're going to get the money for a $20,000 car???????? What wages we barely make are going to buy basic necessities like groceries.

Get your head out of your fucking ass and look at the economic REALITY of this country.

What this article shows is Clavos' innate misunderstanding of the poor and working class in America. Raising gas prices for ANY reason, even if it involves a rebate that shows up in the mail at a later date, will do more harm than good. Jet's right when he says that these products are out of reach for the average American. Many Americans are working two or more jobs and still come up below the poverty line, so the notion of shifting over to a fuel-efficient car is a pipe dream that few can think about affording.

With homes closing and people being forced out of places they've lived in for years, the LAST THING America needs right now is an increase meant to "take the power back" from oil producers. There's a global food shortage going on, people are losing their jobs because they can't afford the gas to drive to work, and the economies of once stable countries are on the verge of collapse. As such, the notion of introducing HIGHER gas prices at this time in history seems a decidedly cruel notion.

Jet,

What's the sense of producing an energy-efficient car that only the rich can afford?

Jet? This doesn't compute to me. What is the sense in making a gasoline car (1900s), Television, household appliance, computer, cellular phone that only the rich can afford (when you first make it)?

In the 1980s I showed my husband an advertisement for a phone you could use from your suitcase. The price was astronomical. In the 1990s they were affordable--now they can be had for free!

The EV1 came out in 1997, that is eleven years ago.

You're too damned busy with your Republican talking points trying to blame congress, because they can't fix TEN YEARS WORTH of damage that the GOP Bush-rubber stamp congress did in only the last year and a half?

@#47

Clav, why do you think the Japanese have the Prius? Where was the American equal to the Prius, when it was launched?

Do you think that the American market wasn't ready for the technology? No demand?

Cindy-re-read #49

"...the LAST THING America needs right now is an increase meant to "take the power back" from oil producers."

Maybe. The point is the arabs are already raising the prices. Those "poor and working class" people are going to be paying $6 for their gas anyway.

The only difference will be it will be going into arab pockets, not American ones.

Clavos, I'm sorry I lost my temper, but damn it. I could write an expanded article on what I said in two paragraphs in #49-but what would be the use when people like you don't care to hear it, or worse-yet refuse to acknowledge the absolute truth of our reality in this country?

"Clav, why do you think the Japanese have the Prius? Where was the American equal to the Prius, when it was launched?"

Excellent question, Cindy.

Until recently the American manufacturers hadn't a clue about that end of the US auto market; they were totally focused on the SUV/truck market and ignored the smaller cars for years.

There's a reason Toyota is now about to overtake GM and become the largest automaker in the world: they're smarter than the American companies.

The market IS here; Toyota saw it (so did Honda), and that's why Toyota just sold its millionth Prius, while the best the Americans have managed to do is come out with hybrid SUVs. Talk about oxymorons!

Clavos, The only new cars being sold are to the upper middle class and the rich (and middle-class people that either lie-or the dealships fudge their income levels on the applications for the loan)

If the only market you have is to them, you produce what they want to buy-SUVs.

The Japanese and Koreans are producing cars that the middle class can barely afford-which is why they're doing better American car makers.

Most Americans can barely afford to pay the required insurance on an financed new car, much less put gas in it. On top of that the maintanance costs required to keep a warrantee from becoming invalid on a new car take them out of reach of working class people. Oxygen sensors, $100 tunes ups, dealer priced services because gas stations don't fix cars any more. The days of being able to work on your car and save some money are long gone.

It's sad that you've lost sight of that reality.

The absolute reality of #49, and the government's (and your) refusal to address it) or acknowledge it, is what has gotten this country in the state that it is now.

on the verge of bankruptcy.

Jet. I have only this to say on the subject of affordable cars.

1997 Geo Metro - 50mpg, Sells for about $700. And it's a damned reliable car rated 9.2 out of 10 by consumers at edmunds.com. If you want a newer model you can get a Suzuki Swift which is the same car and they made them up until 2006. And strangely they're all made by exploited peasants in that third world nation - Canada.

Dave

Sorry Dave, but in the humid days and heavily salted winters of Ohio, you won't find one worth buying, much less trying to maintain and find parts for a ten-year-old car...

At least you gave a thinking man's answer.

Jet

Jet,

In other words, @#55, the poor and "working class" (i.e.) the "new poor" are already doomed.

They won't be able to contribute to consumerism much anyhow so fuck'em. We must never have doubt in The Mmmmmmarket.

Jet,

I really think your missing the point of Clavos' article here and I think if you take a closer look at some of your criticisms they don't really hold water.

I see smoke and mirrors here. Trying to palm off billions of profit by using a tiny number for it- 7.6 percent is an obscene old and tired trick that no one's buying any more.

Maybe so, but all Clavos is saying is we could say the exact same think about every other major industry in the U.S. People call oil profits obscene, but they're not any more obscene than anyone else's.

If they cut their profits in half to say 4 percent, their bottom line would still be healthly in the green by hundreds of millions.

Very true. But what would cutting profits in half really do for the price of oil? You would reduce the profits as a percent of revenue by 3.6%. Even if all of this money was channelled directly into lowering prices, prices would only drop by 3.6%. That would drop retail values from the 4.50 or whatever you're paying now, by only 16c. Not exactly the results we're looking for!

They're so profitable because they're not building refineries, they're not building refineries so that there's a gasoline shortage which makes them obscene profits under "supply and demand" why would you do something to bring down the price of gasoline, unless you knew it helped your bottom line?

Except all of the price increases right now are occurring upstream in the oil business. Not downstream at the refinery or retail level. Supply shortages may have been driven by limited refinery capacity in the past, but that is completely untrue in the present situation.

@#46

Clav,

I will answer in bits. As Akismet reads my post as spam.

Part I:

So, Cindy, you are content with allowing the oil producers to set their own prices, instead of trying to seize the initiative ourselves, and by means of taxes we can return to the people, raise the price to where demand is diminished to the point that OPEC must react and lower their prices?

Content? I've never been content with having to clean up the crap that The Market excretes. But it seems capitalism cannot exist without constant bail-out by government at the expense of taxpayers. That is why I'm not a capitalist.

As for problems building refineries, if you put a referendom on November's ballot saying that if we approve a couple new refineries being built to lower the price of a gallon of gas back to the obscene level of $2 a gallon, it'd win by a landslide.

But again, the recent price increases have not been driven by the increased price of refined gasoline, they are being driven by the price increases in crude. Before the refineries even get their hands on it. Crude gasoline has more than doubled. It makes perfect sense that retail values have almost doubled. The only reason it hasn't doubled is because the refineries are losing money.

@#46

Clav,

Part II

This is essentially correct, and the best way to stop the rise in prices is to not buy the product; i.e., to reduce demand. However, the American consumer has demonstrated repeatedly that the only stimulus to which they will react to reduce demand, is higher prices.

Clav, you mean the American consumer behaves according to the dictates of capitalism? How do you think they got that way?

So far, in order for capitalism to work effectively, we would have to:

A) have owners that aren't greedily (artificially) raising their prices as high as possible.

B) consumers that are not price-driven.

C) speculators that don't take advantage of this.

Okay, well there you have it. But, wait, capitalism seems to have disappeared in there somewhere.

And now, since we don't have A,B, and C we are calling for the government to step in and bail The Market out?

@346

Clav,

Part III

Which brings me around to what I first said: This is a really funny stuff to hear from the mouth of a capitalist. (who still thinks the market economy will save us)

The average citizen will do all the things you said, s/he will be forced to by sheer dire circumstance if nothing else. Yet the oil industry will reap higher reward throughout.

--see #49 and #50 I don't need to reiterate the same points as they were well-addressed in those posts.

Does this seem to you like a system that is intelligent? Trusting the equivalent of our economic air supply to those (our great big market players) who have every right and reason to use it to keep the plastic bag firmly over our heads?

So, if you are going to propose a solution that is not based on The Market, then kindly stop chanting its incantations.

A profit is something you can stick in your pocket AFTER expenses.

That's after paying the payroll

...

That's after paying insurance against unforseen "riscs" like a tanker breaking in half so that it doesn't come out of their bottom line-it comes out of some insurance company's

And it still totals multi-billions of dollars Clavos, and you can't candy-coat that.

After all that, of course there's the tax breaks from the government (us) too.

Yes but if you observe any industry in the U.S. the theoretical zero profit rule of economics doesn't exactly work out. As Clavos pointed out their profit margin isn't higher than anyone elses. Why are Exxon's profits obscene, but GM's profits (until the auto-industry went south) the result of good ol' American business?

Also, not that it matters, but I think your figures on the state gas tax don't include the federal gas tax.

PETI-tackle the reality of #49... or try to.

We're talking apples and oranges here. If the kid down the block is selling lemonade for .50 a glass and it only costs him .25, does that give the oil industry an excuse for their profits? There are many sources of lemonade-just like there are many sources of cars-BUT THERE'S ONLY ONE SOURCE OF OIL... and it has us by the balls.

Oil is for all intents and purposes a monopoly, because it's the only source of energy that this country is geared for. Airlines are going out of business because of greed, people are working two jobs, one to by gas to get to the other one.

what good is it to raise gasoline taxes to make us drive less, if the general public HAS to drive in order to make a living. The oil companies KNOW that no matter the price, we'll pay it in order to make a meager living to put more money in their pockets.

Post # 49 is the best post in the thread, it cuts through all the bullshit and spells out the problem in words anyone (except the unaffected) can understand.

Thank you for that Jet.

DAMN IT Clavos-wake up and smell the fucking coffee. The vast majority of us are rolling pennies to fucking put gas in the 15-year-old rustbuckets we can barely afford now.

ARGUE THAT POINT AWAY

We can't afford a god-damned $70 tank of gas, where the hell do you think we're going to get the money for a $20,000 car???????? What wages we barely make are going to buy basic necessities like groceries.

Get your head out of your fucking ass and look at the economic REALITY of this country.

I don't think Clavos' idea is meant to ignore the fustration. I think Clavos should have phrased it as a rebate instead of a payroll tax cut. Either way (with the difference being the effect on the unemployed) no American stands to lose a single penny. We tax gasoline at 2 dollars a gallon. On average, everyone ends up paying an extra 2 thousand dollars on gas tax. Everyone gets a 2000 dollar rebate check. The people who drive more than average, or who drive 10mpg vehicles, lose money. The people who drive less than average make money.

It all breaks even. Look at it as an opportunity to make money. If you don't drive at all, you made 2000 dollars. If you use half as much as the average person, you made 1000 dollars. Free money!

Argue with #49, I've said all I can say on this subject, much to all of your relief no doubt.

Come up with a valid denial of the points in #49 and I'll humbly and meekly announce I'm wrong.

We can candy-coat this debate all we want and someone will intentionally say something that everyone will want to argue and distract away from the reality of what #49 is.


Until then, I'm off to Wal-Mart for supplies... I have to see if I can find a locking gas cap somewhere.

Almost anyone who makes less than 100k a year stands to make money on this. They consume less than the rich. They consume less transported goods. They fly less. They take fewer long drives for fun. They are more likely to take public transit when they can. They overrall consume less fuel than the wealthy. As a result, the rebate would be larger than the amount of money they spent on the gas tax. Most people making less than 100k a year would make money on this deal. The effects of the day-to-day cost increases could be mitigated by slowly implementing the program, 50c per year for 4 years, gradually increasing the rebate from 500, to 2000 dollars simultaneously.

Dear God, that's about as rediculous as the housewife that announced that she saved her husband %75 because she bought a $150 dress that she didn't need on sale

rediculous ridicoulus dedickulo oh never mind... and that was $75..

what good is it to raise gasoline taxes to make us drive less, if the general public HAS to drive in order to make a living. The oil companies KNOW that no matter the price, we'll pay it in order to make a meager living to put more money in their pockets.

I agree 100%!!, but the working class consumes far less fuel than the rich! So a flat tax and flat rebate essentially transfers wealth to the poor and rewards them for consuming less (and consequently narrows the consumption/wealth gap). It's almost socialist! And coming from Clavos!

Dear God, that's about as rediculous as the housewife that announced that she saved her husband %75 because she bought a $150 dress that she didn't need on sale

I don't think this analogy quite works. The fact is giving everyone a 2000 dollar rebate and increasing the gas tax by 2 dollars would be a massive transfer of wealth away from the rich and towards the poor.

You know who would be really screwed on this deal? Those wealthy shits living along rt 2 outside Boston who drive 45+ miles to work every day. Those millionaires in Fairfield/Middlesex County CT who drive 60+ miles into work in NYC in a sportscar getting 15mpg. THATS who this deal would make pay for the rebate.

@#57

Clav,

Until recently the American manufacturers hadn't a clue about that end of the US auto market; they were totally focused on the SUV/truck market and ignored the smaller cars for years.

But that is not true, we had the EV1 on the road in 1997. We certainly did understand that market and we purposely killed it.

There's a reason Toyota is now about to overtake GM and become the largest automaker in the world: they're smarter than the American companies.

They surely are, but not for the reasons you imagine. Toyota they went to extraordinary lengths and overcame seemingly insurmountable obstacles to push this technology out into the market when it did.

"...before the Prius, Toyota had never been much of a pioneer. It was known as a 'fast follower,' a risk-averse company in which process--the famous Toyota lean production system--trumped product. Indeed, Toyota, based in rural Aichi prefecture, 200 miles from Tokyo, enjoys depicting itself as a slow-moving company of simple country farmers. But as interviews with company executives in Japan and the U.S. make clear, Toyota is capable of breaking its own rules when it needs to. In rushing the Prius to market, it abandoned its traditional consensus management, as executives resorted to such unusual practices (at least for Toyota) of setting targets and enforcing deadlines that many considered unattainable."

The market IS here; Toyota saw it (so did Honda), and that's why Toyota just sold its millionth Prius, while the best the Americans have managed to do is come out with hybrid SUVs. Talk about oxymorons!

Why do you think a risk averse company suddenly is all out tripping over themselves to push out a technology so hard? The reason why Toyota pushed so hard at the same time the GM EVs came out, was to compete with the American technology. When American car makers saw they could get away with abandoning the alternative technology, Japan--which had been trying to get a jump on us-- was already committed to it and their "smartness" was more in line with seeing a need that was being abandoned by the U.S. car maker.

American Car makers destroyed their technology because their marketing experts told them that the Humvee was what they should invest their money in. That is why we have the SUV and japan has the hybrid.

When American car makers saw they could get away with abandoning the alternative technology, Japan--which had been trying to get a jump on us-- was already committed to it and their "smartness" was more in line with seeing a need that was being abandoned by the U.S. car maker.

Your theory falls apart by the fact that GM now has record losses and is falling apart at the seems. Laying off workers etc. Capitalism punished them for their lack of foresight.

And GM is now in the process of turning around, and now the full force of their company and its billions of dollars of capital investment will be turned towards creating even cheaper, affordable fuel efficient hybrids, in order to compete with Toyota.

Your distinction between a foreign and domestic producer in an international market doesn't prove anything. Had Toyota been centered in Texas, the exact same thing would have happened. One auto-maker would adopt the short-term pay off strategy and have a few years of record sales, while one would take the risk and develope the technologies to run GM into the ground.

You think you consume a lot of fuel Jet? I'll tell you who consumes the majority of America's fuel supply.

The wealthy classmate of my brother's who is planning a 33 state drive tour of the U.S. If there was a 2 dollar tax on gasoline, they would pay for several peoples 2000 dollar rebate just by driving that trip alone.

The family of four that hops on a plane to CO/CA/UT for a ski trip every year.

The wealthy classmate of mine who's been on a plane trip to Europe every year of his life.

The millionaire on the CT coastline who commutes 60+ miles in a 15mpg sportscar to NYC (clogging I95 3-4 lanes each direction in the process) while his working class neighbor takes the subway or moves to a poor slum around NYC or works for a landscaping agency to take car of the man's garden while he's at work.

Those 3-4 car families where every son and daughter has a little sportscar or big hummer to drive out on the town whenever he wants.

THATS who uses the majority of America's fuel. And a 2000 dollar rebate won't cover their expenses.

@#81

PETI,

Just see Who Killed the Electric Car as all the "flaws" in my "theories" are already addressed much more eloquently in that documentary.

Pretty much the only fault I can find with Clavos' article is his explanation of ROE. It's not the profits but the ROE of the oil companies that is unusual. Here's Clavos' explanation:

Oil companies are enjoying substantial returns on equity, with industry-wide levels reaching 27% recently, compared to manufacturers' ROEs in the high teens, but oil exploration is a very expensive activity, with a high probability of failure. Greater risk always results in higher ROE for investors.

Expensive oil exploration should make ROE lower, not higher because it should make expenses higher, profits lower, and the return on initial investment lower.

Greater risk might result in higher ROE sometimes, but why would the industry wide average be so high? If it's risky some people should be losing, and some striking it rich. The average ROE wouldn't necessarily be higher.. so I'm not sure this explanation works. I think there must be something else in the current situation making ROE so high. Either way, it's not that significant because even if you redistribute all these profits across the price of oil, it wouldn't do much at all to lower retail prices (about 15c - practially nothing).

The profits of the oil industry are not the issue here.

@#81

PETI,

I will say this much:

Your distinction between a foreign and domestic producer in an international market doesn't prove anything.

It wasn't intended to. It's just what happened. I wasn't dealing with hypotheticals.


Your theory falls apart by the fact that GM now has record losses and is falling apart at the seems. Laying off workers etc. Capitalism punished them for their lack of foresight.

You seem to be a bit confused here about whom capitalism has punished. You are essentially reinforcing my point.

PETI,

Just see Who Killed the Electric Car as all the "flaws" in my "theories" are already addressed much more eloquently in that documentary.


I am not disputing GM killed the electric car. I am disputing your theory that capitalism or captialism as practiced in America is somehow to blame. Japan is capitalist. Toyota is from Japan. The government of Japan did nothing to influence Toyota.

GM's choice to squash the electric car was a poor decision on their part. GM is falling apart now while Toyota has record sales.

It is an international market. Toyota has been selling cars in the U.S. long before GM squashed the electric car. If Toyota was centered in Texas, the exact same thing would have happened. GM would still have squashed the electric car temporarily, while Toyota would develope the technology and ultimately surpass GM.

The fact that Toyota is headquartered in Japan and GM in the U.S. proves nothing.

@#84

PETI,

Clavos did provide a link for us to read, documenting his figures. If you disagree, you might start out with his link to U.S. News and World report and see if you can disclaim their figures by simple reasoning.

You seem to be a bit confused here about whom capitalism has punished. You are essentially reinforcing my point.

If you're insinuating capitalism has punished Americans, I disagree. Development of affordable fuel efficient cars would not be any farther along if GM hadn't squashed the electric car. Other manufacturers have been investing billions in the technology. And now that the price of fuel is rising, their investment is beginning to pay off.

PETI @#87 sorry my mistake, you were not discounting the figures

"I repeat-the vast majority of the working public can't afford-or don't have the credit to buy the fuel efficent cars."

I pay $300 something a month for my 2004 Prius and then insurance on top of that. Sounds like the vast majority of the working public can't handle their finances. Maybe they should wake up and stop spending four dollars on coffee and other unneeded luxuries.

btw, it's a little hard to feel sorry for you rolling pennies, when you have cable and internet access. There's almost $100/mo right there.

"All those billions we've uselessly spent in Iraq would've been better spent giving anyone who needs a fuel-efficient vehicle a subsidy to buy one."

Who is using talking points now? There were subsidies. I got write-offs the first two years on my federal taxes for buying a hybrid. Turn down the emotional rhetoric and do a little research.

RE: Jordan's post. Sorry to be cruel, but anyone working two jobs who is still below the poverty line isn't doing something right with their lives and has made poor choices along the way.

PETI @#88

Please see your own words:

Your theory falls apart by the fact that GM now has record losses and is falling apart at the seems. Laying off workers etc. Capitalism punished them for their lack of foresight.

Capitalism is punishing whom? Is it punishing GM? How is a "corporation" punished? "On paper"?

...Laying off workers etc. Capitalism punished them [the workers] for their [the corporate execs] lack of foresight...

...Development of affordable fuel efficient cars would not be any farther along if GM hadn't squashed the electric car....

Yes it would have, there was demand even with the old tech battery. Why do you think they could not allow the cars to stay on the road?

It doesn't make sense to destroy them and try to do so secretly. It doesn't make sense to buy the battery technology for the inventor and then silence him from speaking about his invention.

Why would GM refuse to accept $1.9 million for the last of the cars that weren't destroyed?

Do these things make sense to you?

Please show me how they fit into your theory.

@#91

"for the inventor" should be "from the inventor"

Also, I forgot to mention the punishment capitalism dole out to the American public [in evidence today] for GM's lack of foresight.

Which is why you shouldn't let an entity that has no obligation but to serve it's greedy interests, be in charge of your air supply.

El Bicho,

Glad to hear you are doing so well and are therefore slumbering happily in your untroubled sleep.

If you are going to condemn people and hold yourself up as an example, the least you can do is provide a disclaimer of your own circumstances.

Single? Children? Income? Occupation? Health? (yours your family's?) Homeowner? (when did you buy?), etc.

If you think this is private, then take your self-proclaimed superiority and stick it sideways up one nostril.

El bitch-0 my cable and internet are free they come with the rent (:^p~~~~~~~~~~

EB I'm paying $292 a month for my car because of my low credit rating-because I'm financing it, I have to insure it for $722 every 6 months in order to be in compliance with my new contract... and that's far a five year old car.

I did my fucking research, I'm my fucking research.

Huntington Bank wanted 308 a month, National City wanted 349-all wanted full coverate up to $300,000 per incodent. No one would finance another car used or new, so I had to buy the car I was leasing.

I guarentee a Prius can't be found anywhere for the price you're paying, if it where I'd be in it.

... by the way has anyone seen the monthly power bill for a non-hybrid electric car?

GM gave the people what they wanted-SUVs. Why, no one making under $50,000 per could afford a new car, and all those above could afford to buy SUVs, so that's what GM thought their buying public wanted.

We're also forgetting that hybrids when they first came out had very long waiting lists and could not be purchased, they had to be leased.

Capitalism is punishing whom? Is it punishing GM? How is a "corporation" punished? "On paper"?

It's owners and investors are losing billions of dolalrs.

And it's not capitalism's fault that GM's execs were stupid. If exec's and owners who have billions of dollars at stake couldn't make the right decision, why would anyone else?

"...Development of affordable fuel efficient cars would not be any farther along if GM hadn't squashed the electric car...."

Yes it would have, there was demand even with the old tech battery. Why do you think they could not allow the cars to stay on the road?

First of all I said development, not ownership. Other companies have devoted billions of dollars to hybrid/electric technology. GM's temporary cover-up might have made them some short term cahs, but it certainly didn't hinder the long-term development of hybrid/electric technology. It's impossible to think that a short-term coverup has hindered the long-term development of these technologies, which have required billions of dollars of investment and an unthinkable large scale effort of the worlds largest manufacturers in an ultra-competitive market.

Nor did it significantly hinder hybrid/electric ownership. Anyone who wanted an EV1 in 1997 could have bought any of the other hybrid/electric cars that other manufacturers came out with a few years later.

Also, I forgot to mention the punishment capitalism dole out to the American public [in evidence today] for GM's lack of foresight.

And you think another style of economics would have made the execs and owners of GM (who are now losing billions for their poor decision) smarter?

GM gave the people what they wanted-SUVs. Why, no one making under $50,000 per could afford a new car, and all those above could afford to buy SUVs, so that's what GM thought their buying public wanted.

We're also forgetting that hybrids when they first came out had very long waiting lists and could not be purchased, they had to be leased.

Jet's exactly right. The reason we're in the situation we're in is not because GM was greedy. We're in this situation because the American public wanted SUVs. GM made a lot of Americans very happy with a lot of brand new 10mpg SUVs. That's why we should have done Clavos' plan ages ago. The intelligent majority should have realized the long-term consequences of cheap fuel (SUVs, inefficient cars, poor public transit, inefficient infrastructure). Most people making under 50k a year would have broken even or made money, while car companies would have had the early incentive to improve fuel efficiency. And rich people might alter their fuel consumption habits, reducing demand and the long-term price of oil.

I don't get it Cindy. Your all about fuel efficient cars, efficient infrastructure, lifestyle changes, decreased fuel consumption, and yet you oppose the single most important step to accomplishing that goal: increased fuel prices?

Clavos' plan does exactly what you have been talking about.. pre-empt long term supply shortages and drastic price increases with price increases now in order to make the transition to renewable, efficient energy sources smoother.

No matter what you do fuel consumption and fuel habits in America will not change until the price of the commodity actually reflects the long-term costs of oil dependence. That's what a gas tax does.

Ok basics lesson in capitalism:

How do people make money?
By selling things.

How do you sell things?
By making things people want.

If America wanted fuel efficiency, GM would make it. Until recently however, most Americans didn't give a damn about fuel efficiency. You were 10 times more likely to hear the 0 to 60 time of the car in the tv ad than the mpg.

If Americans gave a damn about fuel efficiency, we would get fuel efficiency. The problem is, the majority don't or don't care enough. That's why we need a plan like Clavos' that makes people pay so they do care. The problem is it has zero chance of actually happening because most people still don't get it.

PETI:

Nice job. I had to work for a few hours this afternoon (for free - didn't sell him the boat - maybe next time)

I especially liked this:

"It's almost socialist! And coming from Clavos!"

You're right.

Carry on...

I have been saying since middle school we need a higher tax on gasoline. We are the biggest oil consumer precisely because oil is so cheap here. In an environment where the price of oil is inevitably going to rise, who will be more ready?

"We are the biggest oil consumer precisely because oil is so cheap here."

Quoted for Truth.

A high gas tax-even a medium one will hurt the people it's supposed to "help" the most.

The rich and near rich won't feel it at all, but everyone else will have to decide whether to put gas in the tank or food in the table.

Those of you who can't understand that never will.

Ok, enough bashing on GM. IMO they make crappy cars. However, they do make more Hybrids and more varieties of cars with a Hybrid option than any other manufacturer. They also produce some of the most fuel efficient vehicles on the market, not just SUVs.

Plus they make hybrids to meet the needs of different consumers. They make a hybrid pickup that gets 25mpg which is 50% better mileage than a typical pickup. The Saturn Vue is the lowest priced mid-sized hybrid SUV on the market and gets 30+ mpg.

Dave

The situation is so easy to understand-and you don't need a college degree:

The price of oil goes up

the cost of delivery of goods and services goes up because of the price hikes

The cost of living forces workers to demand higher wages

Companies are forced to pass the cost of labor over to the consumer

Companies are forced to move to Mexico, China and India in order to survive because the labor is lower. (have you ever called tech support and got someone without a heavy accent?)

As the companies flee, unemployment goes up.

In 1968 a gallon of gas was 45 cents and a brand new car was $6000, and the stock market was at the level of 1,100-see a pattern here... Inflation is growing steady already.

The price of oil goes up farther

the cost of delivery of goods and services goes up again because of the price hikes

The cost of living forces workers to demand even higher wages

More companies are forced again to pass the cost of labor over to the consumer

The remaining companies are forced to move to Mexico, China and India in order to survive because the labor is lower. (have you ever called tech support and got someone without a heavy accent?)

as the companies flee, unemployment goes up.

Where will it end?

The great depression of 1929. Just like then, nothing will be done until the rich were sffected.
I see the stock market falling below 10,000 by December... and only because rich republicans will keep it artificially up in hopes it'll swing the election in their favor, and a sudden crash will be blamed on the new Democratic administration-just as they hope it will.

whose bashing GM-I was defending them?

@#102

If America wanted fuel efficiency, GM would make it.

That question was asked and answered in the documentary I pointed you to PETI. In a nutshell, the service end would have taken a devastating blow from the electric car.

"About 58 percent of profit at the average car dealer last year came from service and parts, according to the National Automotive Dealers Association's industry-analysis division, compared with about 14.5 percent from new-vehicle sales."

Here's an excellent article from Bloomberg about the fallout from the mistakes made by the US auto manufacturers over the last several decades, which says in part:

"Sales of full-size pickups fell 36 percent in May and of large SUVS, 42 percent, automakers said yesterday. Total vehicle sales dropped 11 percent, the biggest decline this year...

"...Not since the 1980s, when Toyota Motor Corp.'s success with economy models prompted American companies to downsize their cars, has Detroit faced this kind of challenge to a mainstay, analyst Casesa says. The switch to smaller cars then was generated by sharp price increases by oil-producing nations and supply interruptions that doubled the cost of gasoline.

Today a similar shift in American buying patterns is taking hold, again driven in part by gas prices...

"...Lehman Brothers, the New York investment bank, is forecasting 2008 sales of a little over 1.5 million pickups, 35 percent off from average annual sales for the past five years of about 2.3 million. Deliveries of SUVs in 2008 will drop 31 percent to 462,000 from last year's 665,78l, Lehman estimates...

"...``This isn't a bubble,'' said David Littmann, senior economist for the Mackinac Center for Public Policy, a nonprofit research group in Midland, Michigan. ``Unless there's a concerted political decision to go out and drill for more oil, the automakers will no longer be American. GM could have a hyphen in its name.''"

Even the Japanese got sucked into building large trucks, though to a lesser degree:

"The collapse in pickup demand has hurt Japanese automakers as well, albeit less. Toyota, maker of the Tundra, and Nissan Motor Co., which makes Titans, sold 262,321 pickups in 2007.

Of the six top U.S. carmakers based on sales volume, only Japan's Honda Motor Co. has steadfastly avoided investing in large pickups or full-size SUVS. Honda instead built a lighter, more fuel-efficient small pickup, the Ridgeline. The model has sold 40,000 units a year since 2006. "

PETI,

Shareholders blast pay of GM chief executive

June 3, 2008

"WILMINGTON, Del. -- General Motors shareholders blasted the company's chief executive for raking in huge salaries and bonuses while the automaker has struggled..."

So, basically, the workers, the public and then the shareholders are being screwed.

At least the shareholders are liquid PETI. I wouldn't ascribe the same liquidity to the workers or the public.

The execs are quite happy though. Just like they are supposed to be.

I see a lot of argument here supporting the idea that if the market demand rises then the market changes. I'm not sure what the point in proclaiming the obvious is.

Did anyone deny this? Or have the more subtle points I made simply resulted in wasted typing?

Under Bush's Big Oil-big business administration, the executives have been grabbing all they can, ...while they can. Now that big conracts are drying up in Iraq building buildings and infrastructure that are already falling down, or were never completed but paid for.

Now it's the oil industry. If this happened during the 2004 election, Bush never would've been re-elected. The oil shortages isn't from depleting reserves, it's from rich fat cats buying low and selling high, holding off releasing what they've bought until the price of a barrel triples-trippling their money.

They will continue to grab what they can, while they can. Example, Bush's scam encouraging common folk to blindly invest their retirement money in the stock market, then after then after the millionaires have sold off their shares making multi-millions only to laugh when it crashes- leaving everyone else holding an empty bag.

Then they'll come back in and buy back their old stocks paying ten cents on the dollar.


Mark my words it will and is happening as I speak.

@#102

PETI,

Why didn't Americans give a damn about fuel efficiency?

@#105

Agreed.

But sudden drastic increases in price result in serious hardship and will eventually result in chaos.

Which is why it should not have been The Market that was relied upon to save us. And which is why it is likely, when all is said and done, it will not be.

#102

I agreed people will have to pay to care. However, we don't want to create an all out economic depression getting them to care.

We already have enough to worry about:

The worst market crisis in 60 years

(Before you try to casually discredit George Soros's knowledge of market bubbles, you may wish to learn a little about his history.)

I wouldn't casually discredit anything about George Soros, including his goal (stated) of seeing the end of our capitalist economy and the establishment of socialist economies worldwide, all centrally directed by one entity.

Ironic, in light of his having made his very substantial fortune as a capitalist corporate raider.

I agreed people will have to pay to care. However, we don't want to create an all out economic depression getting them to care.

We already have enough to worry about:

As I have explained at least 10 times in this thread to you and Jet. No one loses a penny according to Clavos' plan. The money from the plan doesn't up and dissapear. The only people who lose money on this plan are the arabs and the millionaires in the U.S. who consume most of our fuel.

You tax the gas then you give the money right back to them. It simply changes the cost structure.

If I hear one more word about how this plan hurts working Americans I am going to flip out. Did you read the part about giving the money right back to people? Or are you too caught up in your socialist agenda to do anything practical about the situation?

It's basic economics, you want to reduce consumption of a commodity: tax it and give the money back in a rebate. No money is lost net, except by those who consume above average (ie the rich) and those who are selling it. You really want to take on Exxon-Mobil's profits? Start taxing their commodity. They will go ape-shit.

It's funny to think, if Clavos had proposed a corporate tax on the companies, you wouldn't have batted an eye, even though the cost would have been passed straight to the consumer.

Why didn't Americans give a damn about fuel efficiency?

Because fuel was cheap.

But sudden drastic increases in price result in serious hardship and will eventually result in chaos.

Which is why it should not have been The Market that was relied upon to save us. And which is why it is likely, when all is said and done, it will not be.

Which is why I suggested to Clavos the plan be done in four 50c increments and the yearly rebates increase in four 500 dollar increments to 2000 across 4 years.

Okay, I've won the lottery to the tune of 300 million dollars.

I go out and buy every container of chocolate ice cream in the state of Ohio and put it into cold storage where no one can get at it.

I bought each container at $5.50 each wholesale. My huge purchase is driving the price of chocolate icecream to $10 a container because the demand is there but there's no supply.

The surrounding states are afraid to let go of their reserves for fear theirs could disappear just as quickly.

In effect I've caused an icecream shortage.

I offer a "just discovered" supply of chocolate icecream the next week, which I'll sell to the stores for only $8.50 a gallon making a three dollar a container profit on a shortage that I myself created.

That's what oil speculators are doing right now.

PETI, you're putting the burden squarely on the back of the ones least able to bear it. Instead, force the oil companies to give up 25% of their subsidies over a period of four year and it'd have the same effect.

And you're delusional if you think the U.S. will ever really on some kind of socialist or central planning system. A large portion of the country would be up in arms (literally) before that happened.

What is your solution to this problem? Increased taxes to fund government sponsered research which will operate at something like 10% efficiency. Who do you think those taxes are going to hurt?

Of course you're going to respond that you'd get the money from cutting some illegitimate government spending like the Iraq war or farm subsidies but that money is already needed to reduce the deficit and any leftovers should be given as a tax break to lower and middle class Americans.

Face it, every dollar you propose the government spend is a dollar out of Americans' pockets.

Why would you do that when you can adopt Clavos' plan where the only people who lose money are the arabs?

Your centrally planned socialist solution is the one that costs working America money, not Clavos' rebate plan.

"Go ahead, tell me I'm wrong"

You're not wrong, but you are way late to the party:

I pointed out the reasons for the steep gas prices in the article, and PETI has said it upthread at least a million times.

An even better real-life example? Suddenly all of our televisions are going to become extinct next February because they're no longer capable of decrypting the new tv signals.

Result: TV's that we used to be able to buy for $100 to $500 are gone forever. Now they're $600-$5,000. Back when tv went from black and white to color broadcasts, it was mandated that TV stations had to by law broadcast color signals that a black and white set could decode and display.

Millions of TVs didn't go obsolete in the blink of the color eye in the 1960s.

Now appliance stores are being caught selling analog tvs and not telling anyone that they'll be useless in less than a year. Why, because they have a "Get out of jail free" ticket from the Bush administration.

Grab what you can while you can, he's out of office along with his pro-big business vetoes in about six months!

PETI, you're putting the burden squarely on the back of the ones least able to bear it. Instead, force the oil companies to give up 25% of their subsidies over a period of four year and it'd have the same effect.

Right it would have the same effect. So why are we arguing?

And if you READ my post 119 you would see the fact that this does not fall on the backs of the working poor. The working class MAKE money according to Clavos' plan. I understand you being suspicious of anything Clavos proposes (I myself am also :) - no offense Clavos) but when he proposes something as practical and straight cut as this, you really have to hand it to him.

The rebates generated by this plan would more than pay for the increased cost of fuel to working class Americans. The people who pay are the rich people going on 33 state driving tours of the U.S. Are you planning any driving trips to 33 states Jet? I'm not.

PLEASE dont repeat that the burden falls on those least able to afford it. They don't. I assure you anyone struggling with the rent or car payments does not have above average fuel consumption.

Besides, a corporate tax/cancelling 25% of subsidies has exactly the same effect as Clavos' plan. You can't be in favor of one and against the other. The only difference is symbolic.

"I understand you being suspicious of anything Clavos proposes (I myself am also :) - no offense Clavos)"

None taken, PETI.

I'm old enough to know there's no honor among thieves...:>)