Tuesday, September 27, 2005

Gas and Economics

Some people (okay a LOT of people) have been complaining about the price of a gallon of gas. First off … the price of gas in the US is one of the lowest in the world, Europeans generally pay anywhere from $5-$10 a gallon to fill up … most of which is taxes. Second off gas prices are, in large part, dictated by the price of crude oil … this in turn is mainly controlled by OPEC as they represent the collaboration of most of the Oil Producing countries in the world.

For various reasons the price of crude oil has been rising over the last several years … this means that the refineries that we depend on for gas have to pay more for their oil … in turn having to charge more for the gas they produce meaning that the stations have to charge more to cover the expense of buying gas.

Now there are a lot of factors involved here … but part of the problem also comes in the fact that no new refineries have been built in the US in roughly 30 years. The existing refineries have been operating at max capacity for several years now … we can’t produce gas any faster even if we got more oil. Add to that the fact that there are MORE vehicles using the gas … many of which are of the low MPG rated ‘utility vehicles’ and you have a situation of increasing demand with a fixed supply whose raw materials are becoming increasingly expensive.

Now … let’s take a look at the consumer end of things since that’s where most people are complaining about things. We’ll create a fictitious gas station called the Gas-O Line …

I’m opening a new Gas-O station … and I buy 1 weeks worth of gas to get started at $1.00 a gallon (keeping the numbers simple for the purposes of calculation) … of course I have other expenses, station maintenance, electric bill, phone bill, employee salaries (and payroll taxes), rent or mortgage, insurance, etc. … I determine that I need to add $0.50 to each gallon of gas to cover these expenses and, as a business, I want to make a profit so I decide on a 10% profit margin … that would be another $0.15 so I need to charge $1.65 a gallon to cover my expenses + profit … of course the government lays another tax on the sale of that gas that I have to collect at the time of the sale … let’s say it is 10% as well (that’s another $0.165) … so now I’m charging $1.815 / gallon when I open my station.

2 days after I open something happens and my supplier raises his price to 2.00 a gallon. No problem, right? I’ve got a weeks worth of gas already right? Wrong. If I continue to sell my gas at $1.815 a gallon for the rest of the week I won’t have enough money to buy the next weeks supply when the time comes. (Remember only $1.15 of that $1.815 will be around the $0.50 is already spent on employees, etc, and the $0.165 is straight to the government.) To insure that I make enough money to keep my supply going I have to raise my prices to a minimum of $2.75 a gallon … with no profit (which if I’m not going to make any profit I may as well just close down.) … so let’s say $2.85 (less than a 5% margin) … but I’ve already sold 2 days worth so I also have to make up the difference in that gas (this would depend on numbers that we haven’t been dealing with how much sold in those two days, how much was left in the tank, etc. so for now we’ll assume that it is another $0.05 to cover it) … so $2.90 a gallon then.

Most people would accuse me of being ‘greedy’ because of this … say that ‘I’m taking advantage of things’ ... now certainly I can gamble that the price will come back down by the time I need to buy my next weeks worth of gas … but if I do that and keep my price at the $1.815 and the price doesn’t come down I will only be able to afford to fill half my tank ... and if supply prices continue to rise that gets ugly fast.

There are of course a lot of things I’m not taking into account in all this to try and keep it simple. But that is the gist of it … the electric company works in much the same way … they have to charge based not on what they paid, but on what it will cost them to keep their supply coming.

“But prices should be kept low … we need gas!”

In other words “Government should use our tax money to subsidize gas so I can afford to drive whenever I want.”

No, no, no and NO.

We need LESS government in the economy, not more. Part of the problem in general is that we don’t ‘need’ gas … driving is a luxury, a convenience, not a necessity. That we, as a society, have grown so dependent on it is a completely separate matter.

Another part of the problem is those organizations that call themselves ‘environmentalists’ … It has been environmental laws (and a bit of a NIMBY (Not in MY backyard) mentality in general) that has prevented the construction of new refineries to help keep up with the increasing demand for fuel. It is environmentalists that have so far prevented oil drilling in the section of ANWAR that was set aside for oil drilling as well as off the coast of Florida increasing our dependence on foreign oil from a very volatile international oil market – though we have to keep in mind that without more refineries to refine the crude oil, gathering more oil may have a minimal impact on the price of gas due to the fact that our refineries are already operating at max capacity, the only difference would be that we wouldn’t be buying the oil from overseas so the refinery would likely be getting it’s raw material cheaper.

Oh … and also as far as ‘need’ keeping the price of something low …. Think of it like this:

You are the only person in 1000 miles that can do ‘job A’ … 60% of the people in that 1000 miles ‘need’ job A done. Should you be forced to work for minimum wage because it is a ‘needed’ job? You’d better get some other people to learn to do the job … but what’s their incentive if they can only work for minimum wage? [Ignoring for a moment the fact that I don’t generally agree in minimum wage laws in the first place ….]

Most of you that know me and read this already know all this of course and understand that one of our greatest bastions of freedom is the Free Market system, and that the Free Market system fails to operate when the government interferes with it.

Friday, September 23, 2005

Paying for the Hurricanes

I’ve seen a disgusting number of people from the President on down calling for massive federal funds to rebuild New Orleans … undoubtedly this will continue in the aftermath of the approaching Rita. But is this a proper use of federal funds? If a tree fell on my house tonight my house would be destroyed, I’d have no where to live, there’s a good chance I would have lost a good amount of the stuff I have in the house … but I wouldn’t be eligible for a single dime of Federal aid … In fact the town I live in had some Tornadoes hit as a result of the outer band of storms from Katrina … the people who suffered a loss in those storms are also not eligible to receive Federal aid…

This is exactly why the Federal Government is not supposed to get into the business of charity. There is no way for it to do so in a fair and even manner. It simply can’t afford it. People are calling for the survivors of Katrina to be given a monetary sum from the government to pay for the loss of their loved ones as was done for the survivors of the 9/11 attacks in 2001. Putting aside the fact that I didn’t agree with the payments to the victims families of 9/11 … putting aside the fact that no one called for such for the hurricanes that hit Florida last year … people are suggesting that people who died, largely to their own stupidity, to a storm that they were warned about and ordered to evacuate from DAYS in advance are in the category of people who died in a surprise attack that they couldn’t have escaped from.

Don’t get me wrong … I want to see the people of New Orleans helped … I want to see the people of Mississippi and Alabama that suffered from the hurricane helped ... I want to see those that suffer loss from Hurricane Rita helped as well. But that is why we have the American Red Cross and other, private, charities … it shouldn’t be the government’s responsibility.

The idea is that the federal government should have an insignificant impact in our lives … it should not come bailing us out of our problems. The contribution of the federal government to disaster clean up should be the deployment of federal troops and equipment IF REQUESTED, nothing more … they certainly shouldn’t be writing checks to people.

As it stands a large number of people in the hurricane stricken areas of the gulf coast will be helped twice … by the government and private charities. Other people in the United States will experience loss for various other reasons (house fire, tornado, etc) that don’t classify as a ‘natural disaster’ and many of those will be lucky if they receive help from the private charities. How is this fair and impartial? Did someone that looses everything in a fire in Nebraska somehow loose less than someone that lost everything to Hurricane Katrina? Both may also have lost loved ones in the disaster … both homes are destroyed … both have lost their belongings. But there is a difference here … the ones that lost their homes in a hurricane knew it was coming unless they had their heads stuck in the sand ….

But gone are the days when the Congress or the President will deny aid to a natural disaster victim … we live in the days when both the Congress and the President will happily spend the American Taxpayer’s money on ‘aid’ in order to look compassionate and buy votes. Any politician that tries to stand against what is, in essence, a misuse of Federal funds would loose any political future that they had … they would be called ‘heartless’, ‘callus’, ‘racist’ or even worse ‘rich’, and they would have the political life expectancy of a snowball in hell.

And that’s the hole that we have allowed to be dug … to change things at this point a majority of Congress would have to commit political suicide … while this might, in the short term, fix the problem it would almost certainly guarantee that the opposition would take power in the next election with the potential result of not only undoing that short term fix, but also lead to further power being controlled under the banner of the Federal government and away from the people who were supposed to wield it … We The People. What this essentially means is that the only way it is going to happen is if ‘We The People’ get out of our comfortable chairs and make it happen….

Monday, September 12, 2005

State Rights

In the wake of Hurricane Katrina many people are questioning the ‘sluggish’ response of the federal aid. As I believe I’ve mentioned once already, this was partially the result of the Louisiana Governor declining the initial offer of federal assistance shortly after the hurricane struck. There were other factors, communication issues, coordination problems between state and local officials that compounded when federal assistance did get the okay to provide aid. While some of these probably were problems with the federal response, many were fundamental problems at the state and local levels.

All of this has led to people questioning why Bush didn’t force the issue and step in, and the reports are that he considered it. With the issuing of an Executive Order, he could technically have moved in and secured Louisiana with federal troops, why didn’t he? State Rights. State Rights have been dying a slow and painful death for decades at the least, but had “W” taken that step it would have essentially put the final nail in the coffin and placed us all directly under the bloated power of the federal government.

He would have set the precedent that the President could, at any time, use Federal Military Forces to seize control of any State in the Union. There is a reason that this is not meant to happen … and it is in essence the same reason that the President couldn’t send troops over to secure Spain after the train bombs last year … he would be grossly overstepping his jurisdiction. This is the type of thing that ignited the war between the states in the first place … the right of the state to govern itself.

People have forgotten the idea that this country was originally organized around … local control by the people. The idea was that most of the ‘government’ that affected our lives was to come from the most local level so that ‘we the people’ could control it. City governments were responsible for handling disputes and enforcing the law of the local area … state governments were to manage those disputes that arose between towns … the role of the federal government was to look to the protection of the states and manage disputes between the states to allow fair and equal treatment based on the constitution. The states were, in essence, small countries with the federal government mediating between them and maintaining the forces necessary to protect the whole.

Now we have President Bush saying Congress should consider whether the federal government should have more authority to step into disaster areas without a request from the states. The answer should be ‘no’ … we don’t need to give the federal government any more authority than it already has, and I would say that we actually need to take some of the authority that it has now, and return it to the States where it more appropriately matches the original ideas on which this country was established.

We as a country need to stop looking to the federal government to ‘bail’ us out … it is not their job. Why does a state need to build a state highway that has to be financed 75-100% by the federal government and has to be maintained primarily through federal funds? The idea is supposed to be that those funds should come from the local level … where the people providing the money can keep a closer idea on where their money is going. What money can’t be gained by the state should come from private investment not money taken by the federal government from people on the other side of the continent. But politicians learned a long time ago that things are so much easier to handle when they are out of sight of the people funding them … it is much easier to get funding for ‘pork’ projects when the money is collected by the federal government and then distributed to the states …

The system also makes it easier to hide ‘pork’ problems at the local level … ‘local’ tax money can be collected and spent reasonably on ‘proper’ projects while federal money can be used for the ‘pork’ projects because the locals won’t look at those numbers as closely … after all … that’s not THEIR money … that’s federal money.

No … the federal government doesn’t need more authority to step in without request from the state … the states need more authority to handle disaster situations. Of course that would mean that the blame for the failures to plan, to use the money and resources properly, for maintaining law and order, and all of the other duties of the state would fall on the state and local government….

Friday, September 09, 2005

Katrina and the Race Card

I get really tired to hearing that <insert issue of the day> is caused by racism, or that people who believe that law and order should mean something are racists, or that only racists support welfare reform (or tax reform, or immigration reform, or virtually any type of reform known to man).

It is, in essence, minority leaders (or those pandering to minorities) saying ‘I can’t actually debate with facts so I’m just going to call anyone that disagrees with me a racist.”

Take looting in New Orleans as an example …. There have been reports of people, even some political figures that have compared people who expressed opposition to looting as, in the words of one blogger, ‘racist f---s’.

I’m sorry … but there is nothing that you NEED in a jewelry or electronics store. I can distinguish and allow the ‘looting’ of grocery and convenience stores for food and/or water in a situation such as this, heck a lot of the food in those places will spoil and have to be thrown out anyway ... at least this way SOMEONE gets some use out of it, but that plasma TV isn’t needed for your survival. Of course had residents been properly prepared then they wouldn’t need to loot even for the necessities of survival …. But that’s an argument for a different rant.

One person tried to justify the ‘looting’ of televisions by saying that they would use those televisions to ‘barter for the necessities’. I’m sorry … but what’s wrong with using cash, or items that *gasp* actually belong to you.

I’m sorry, I don’t care if you’re Black, White, Hispanic, Oriental, Martian, or Green with Purple Poka dots, stealing is stealing, and while I can forgive theft for the necessities of life given the extra ordinary conditions … taking advantage of those conditions to steal the property of others for personal gain is not forgivable. It’s not a ‘race’ issue … are most of the looters in New Orleans black? Well, given that most of the citizens of New Orleans are black (to something like a 7:1 ratio) then odds are pretty good that, yes, most of them are. Chances are pretty good that they are poor too … and that doesn’t matter either.

Odds are that … regardless of race … the people that start looting in these situations are the same people that take the ‘easy way’ out of life, preferring to live off government hand outs than to actually work for anything. Denied those hand outs they seek to take what they want directly (notice the use of "want" as opposed to "need"). At best they are lazy good for nothings, at worst they are social predators to whom stealing is already quite familiar.

Others want to blame the slow response of federal agencies on ‘racism’ … saying, as Georgia Democratic Congressman David Scott suggested, that ‘Washington would have moved more swiftly if the faces on rooftops had been white.’

Of course now we are finding out that the delay in federal support came because the Louisiana Governor declined the initial offer of aid, requesting time to assess the situation. The same also seems to be true with the Red Cross response … National Guard Troops and Red Cross were ready to go as soon as the hurricane was over … but were delayed by the state government.

Federal support can be offered, but unless it is accepted there’s nothing that they can do. Red Cross can technically go in on their own, but in a situation like that, if martial law is in effect they can find themselves on the wrong side of a bad situation. No … the slow response wasn’t racism … unless it’s the Governor of the state that you’re accusing of being racist.

Just because something bad happens to a member of a minority group … or a member of a minority group finds themselves in a situation that causes people to disapprove of their actions … doesn’t automatically make them a victim of racism. If a person that happens to be a minority gets fired from a job by a boss who is white because they weren’t DOING their job, that doesn’t make it racism, but there are those that will be jumping up and down shouting racist and pointing their fingers at the boss if it gets televised on the news.

We really need to take the ‘racism’ card out of the deck … with as often as it is used today the only thing that is happening is that true examples of racism are more likely to go unnoticed …. Much like the boy who cried wolf was ignored when the wolf actually showed up….

Wednesday, September 07, 2005

People in Need

This isn’t specifically about Hurricane Katrina, rather it’s about people in general, but it can certainly apply to the people affected by the hurricane. I’m not just talking about donations because while those people whose lives have been torn apart by the hurricane can certainly be helped by those and are definitely in need. I am also not specifically talking about beggars, panhandlers, or people on welfare that may or may not truly be in need.

I’m talking about normal people who find themselves, for whatever reason, in a situation that they could use some help. Car broken down on the side of the road, or find that they left their lights on and their car battery is dead, or they locked their keys in the car for examples. Minor things that could happen to anyone and, I dare say, eventually happen to everyone.

Now I would like to think that people have enough respect for one another to lend a helping hand to someone in need when they’re able to. I would like to think that people would provide that help to another person regardless of who the person in need was. I would like to think all that … but too often I see that just isn’t the case.

Certainly I understand that people aren’t always able to help, but I’ve personally encountered people that aren’t unable … they are unwilling to help … or were unwilling to help me at least. And today, as I’m reading Neal’s Nuze (http://boortz.com) I see “Yesterday I told you of one man who wrote that he was driving down an expressway and saw a car broken down on the side. There was a woman holding a small child standing outside the car. He pulled over to help, but when he saw the "W" sticker on the woman's car he drove off. He just couldn't bring himself to help anyone who supported George Bush.”

Now I believe he was referring to something that he had read off of http://www.democraticunderground.com/ and frankly, well, I can’t say I’ve exactly had a stellar opinion of the posters at that particular site, so I can’t say that I’m that surprised.

A lot of people wouldn’t have a problem with this stance … and maybe I’m just weird … but to me, there’s no difference between a person that would do this and a person that would drive off because he suddenly noticed that the woman was black, or saw a Star of David on her back window. This is a person who is willing to discriminate against another human being because she’s different than him. He believes that he is better than her because of her political choice … he believes that she doesn’t deserve his help. I bet he felt that he ‘taught her a lesson’ too … if he had a Kerry bumper sticker the ‘lesson’ that he probably taught her was that Kerry supporters were jerks …. Though there’s a good shot she already knew that….

I hope that he has a wife and young child, and that they break down on the side of the road, and the person that stops and helps them has a big “W” on their front bumper … proudly displayed. Of course they might be too proud to take assistance from a lowly ‘Bush supporter’ ….

People really need to realize that we’re all humans and we’re all different we should welcome that difference because life would be really boring if we were all the same.

Well … I’ve rambled enough for the day … hopefully there was a point in all that somewhere…..

Thursday, September 01, 2005

Hurricanes and Greedy Americans

I’m sure that you’ve all heard about Hurricane Katrina by now … heard of the devastation that it caused and the after effects that still continue to cause problems. Many of you also know that I went through Hurricane Andrew in South Miami in 1992, so I am acutely aware of the damage that a Hurricane can cause in an area and the needs that the people in such areas have.

I’m not here to give you news of the hurricane or it’s aftermath … there are plenty of news sources for that, and I’m not going to beg you for donations to help the relief effort or seek sympathy for the survivors or those that lost family members or lay blame for the hurricane.

I am here to talk about that whole ‘blame game’ though … as if anyone is to blame for a hurricane. I’ve heard various accusations in the wake of Katrina … that the hurricane hit because we have so many of our troops in Iraq that they weren’t here to do something about it (just what they were supposed to do I have no idea) … that it was the judgment of Allah (who didn’t see THAT one coming) … That it was George W. Bush’s fault (though I couldn’t figure out why specifically … I suppose it probably goes back to the war though) …. I thought I saw a suggestion that it was because we were drilling in ANWAR (except we aren’t … though we should be) … oh and it’s the fault of the Governor of Mississippi for not supporting the Kyoto treaty … and the fault of ‘greedy Americans’ and their SUVs.

Personally I blame John Kerry … if he had been a better Presidential Candidate he would have been elected and doesn’t everyone just KNOW that he’d have built a wall around the country to protect us from such terrible natural disasters? I also blame Germany and France for not supporting the war in Iraq … if we’d had more support from them more of our troops might have been here (though I still don’t know what they were supposed to have done to stop the hurricane) … I also blame the California Environmentalists since it was their environmental laws that caused the devastating fires in California a few years ago, and we’ve had more frequent and stronger hurricanes since those fires….

Does everyone see how completely stupid all that is? I can assign blame to whomever I want too, it doesn’t make me right or them at fault. All it does is make me one of ‘them’ … one of those people that tries to blame all the bad things that happen on the people I disagree with. One of those people that tries to politicize this natural disaster to try and gain support for my views.