Sunday, June 29, 2014

I love high altitudes! And I'm okay with high gas prices...

I love high altitudes. It's where I find wild trout in great abundance. In my younger days, before I began thinking deeply about economics, I viewed the outrageous price I'd pay for a gallon of gas from those tiny stations tucked along those mountain roads as pure highway robbery. Each owner knew that his station was the only game for miles, so they'd stick it to every motorist who'd dare venture into their wilderness. Or so I thought.

The other day, while picking up the dry cleaning, the nice lady, with the colorful vocabulary, who watches my little weekly TV segment says to me "hello Mr. Mazorra, how are you today?" I say "great, how bout yourself?" She replies "oh, I'm a little #*%sed off right now to tell you the truth." "What's the matter?" "My last customer haggled with me over her bill. Everybody wants everything for nothing! Don't they know that prices are going up everywhere. It really #*%ses me off how we get a little ruckus in Iraq and those big oil companies stick it to ya immediately with higher gas prices."

(It's funny how the few folks who work at places I frequent, and watch early-morning TV, often spark up conversations about the economy or the markets by telling me exactly how it is. They're usually generous with their comments about the weekly segment, and how they appreciate my perspective, but I'm thinking if that were true, wouldn't they be asking me how it is [not that I always know], as opposed to telling me?)

So, I take a deep breath, and I ponder how I might help my friend understand that the price of a gallon of gas is not determined by some great price-fixer looking for every opportunity to stick it to the consumer. That gas prices have risen lately due to speculators bidding up oil and gas futures contracts, in anticipation of a supply disruption. And how that activity---its result (higher prices at the pump)---inspires profit-seeking producers from other areas of the world to ramp up production. Virtually assuring that there'll be gas for Fresnans regardless of what occurs in Iraq.

But, alas, I didn't give it a try. I was thinking that she--already being #*%sed off and all---was in no mood for a lecture on how markets work. So I simply said "Ah, don't let em get to ya. Life's too short." She said "I know, in fact my doctor just put me on new blood pressure meds" (confirmation for me that I made the right call). "See what I mean?", I replied...

Oh, almost forgot: The next time you're driving to some remote location, when you stop to fill er up at twice the price you paid back in town, be thankful for "free" markets. Be thankful that no vote-starved politician has lately been able to fix the price of a gallon of gas. For if he had, you can darn well bet that that price would not have covered the extra cost of transporting that gas that far into the wilderness. Meaning, you'd be stuck, big time. For that matter, you could even have trouble filling your tank back in town (remember those long lines back in the 70s, when Nixon was fixin prices).

I'm telling you this because apparently politicians are starting, again, alas, to go there...

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