The Price of Gas

It was with some interest this week, that I participated in a discussion at work about the current price of gas. It seems like the volume is being turned up on the debate to allow more domestic oil drilling, in an attempt to increase supply of gasoline and thereby reduce the price of gas for us all.

Seems logical, more supply, less demand, lower prices. Economics 101.

The major oil companies hope to convince enough consumers that expanded drilling rights is the cure to $4 gas. C'mon, Alaska would look great with those oil derricks scattered across it's vista. How about drilling off the eastern and western U.S. coastline... The chances for an environmental disaster aren't that big, are they? What could possibly go wrong with that plan? Those pesky National Parks are hiding the key to cheap gas. Why go camping when you could go drilling?

The ONLY thing holding us back from $2 per gallon gas is expanded drilling rights.

Except that's not the way it works.

We forget that oil is bought and sold in a world market. Even if we produce more gasoline domestically, does anyone really believe that Exxon Mobil, will sell it to us for a reduced price when they can get $4 (or $5 or $6) in the World market? Major markets like China and India are becoming major oil consumers. They're adding to the demand far faster than anyone can supply.

Lobbying by the oil companies is distorting the truth. They know it won't drive prices down. But it will grant them access to additional supply upon which they can generate more profits. Because the name of the game is not to serve its customers, its to serve shareholders.

And they have done THAT, very well.

Want proof?

The U.S. gets most of its oil from ,,,,wait for it......Canada. Not Saudi Arabia, Iraq or Iran. Canada.

If you apply the same reasoning the US Oil giants are pitching, where greater supply equals lower prices, then you also need to explain why Canadians are paying MORE for gasoline than we do HERE! They EXPORT oil, for heavens sake!

Aside from a couple of examples of dictatorships, in whose countries gas is artificially kept inexpensive as a means to staying in power, free market economics are in effect.

The bad news is that gas will never return to 2005 prices. Ever.

The good news is that if we seize the opportunity, perhaps we can rid ourselves of this dependency over the next thirty years.

In the meantime, get ready for higher prices.

I Want an Elitist President.

I'm confused by all the "elitist" criticism of the Presidential candidates. Isn't it time we voted for an "elitist"? Don't we deserve an elitist?

The person I want leading this country is definitely NOT one of the friends I hung around with in college. Don't get me wrong. They were great. It's just that I wouldn't trust them to lead a country. And I'm sure they'd feel the same way about me.

I want a President who is thinking six steps ahead of his rival in Foreign Policy matters. I want a President who connects the dots with respect to cause and effect. Someone who has the vision (unpopular or not) to make longer term decisions and to effectively communicate why we're heading in that direction.

I want a meticulous planner, a brilliant strategist, a uniter, a Mensa level scholar, a brilliant communicator and motivator, a historian, a psychologist. The challenges facing us right now demand that we bring to bear the best and brightest minds in the country. These people aren't everyday, average citizens.

They operate in the intellectual stratosphere. The are among the "elite".

Dictionary.com describes "elite" as "the choice or best of anything, considered collectively".

Those who argue that we should write off any candidate who is considered "elite" are advocating for mediocrity. Perhaps it's because the best candidate from the accusatory group is just average. Perhaps they don't understand the meaning of the word "elite".

Maybe some of us aren't comfortable around smart people.

Get over it.

Would you take advice (or a prescription) from a physician with an Internet "degree", who was working out of his car and who couldn't put a sentence together? Or would you prefer being attended to by an articulate, compassionate doctor with several degrees from a prestigious medical school, operating from a meticulous office?

I like "elite". I trust "elite".

I want to vote for someone I'd like to have a beer with. BUT, I would expect that same person would never be caught dead having a beer with me. They'd have more important things to do.

Pay Up Sucka!

On May 1st I gave my brother a call. He's a CPA and a partner in an accounting firm in Ontario, Canada.

I called him on May 1st, because April 30th is when Canadian income tax is due and his firm processes a LOT of returns.

And so, I waited until the seasonal crush of work subsided before calling him. it wasn't long before our conversation turned to tax rates.

With all the local talk in the US of making income tax cuts permanent and with several of the Presidential candidates talking about gas tax holidays over the summer months, bailing out failing financial institutions, bailing out homeowners affected by raising mortgage rates, lowering corporate income tax rates and somehow paying for universal healthcare, Social Security and Medicare/Medicaid against a backdrop of a declining US dollar, a slower economy and an ongoing expensive war, I thought it was time to inject a dose of reality into the discussion.

In Canada, they have universal healthcare, Social Security and are NOT fighting an expensive war.

My brother reminded me that in Canada, the highest personal tax rate is 46.4% and that it applies to all incomes over $120,000. In Canada, mortgage interest is NOT deductible. And remember too, that Canada has a consumption tax of 15% (Provincial Sales Tax and a Federal Goods and Services tax) on stuff you buy with your after tax dollars! Oh, and gas is currently (the US equivalent) of about $4.25 a gallon.

The Canadian economy is about 10% the size of the US economy and yes, they have a National debt.

The big difference between the approach that the two countries take is that in Canada, they attempt to "pay as you go" for services. In the U.S. we tend to try to keep taxes low, count on a growing economy to make up the shortfall and put the difference on the charge card (increase the national debt).

It allows us all to live "the American dream".

Question is: Which of the Presidential candidates will have the courage to wake us?