Giving away the farm, car, boat and your neighbor’s dog. Jody Richards and the legislature want to give Peabody a $90million bond just to consider building a wasteful coal conversion plant in Kentucky. But that’s only part of the up to $500million freebie they’re offering up. Paying $800k-$1million to create each job makes keen financial sense to us– how about you? [H-L]
Lock-step with Bush? Both Geoff Davis and Mitch McConnell offer their praise for Karl Rove. Words of description used include brilliant, dedicated and enormous. We assume they’re talking about his ability to avoid testifying before congress. [Enquirer]
Rumor has it gas is expensive. And oil companies gouge prices. Who knew! Greg Stumbo says these price hikes are illegal, but what you can you do? Hold your elected officials accountable, that’s what. Pressure Congress to make price gouging illegal. [WAVE]
Liberals are liberal with uncertainty. American Prospect (you know, the dirty liberals who hate America) discusses the movement to oust McConnell while at the same time saying the opposition is afraid to come forward. Mainly because Bunning’s seat in 2010 is an easier win. They think it’s McConnell’s win. Go figure. [American Prospect, 2]
Coal companies cut corners. More from the Who Knew Dept. Clintwood Elkhorn Mining Company are demolishing Pike County roads with little regard for area residents or the environment. Along with blatantly violating a plethora of state laws. [News-Express]
11 responses so far ↓
1 David Adams // Aug 21, 2007 at 3:55 pm
At what price of gasoline would we no longer be gouged?
2 jake // Aug 21, 2007 at 5:24 pm
Exactly my point. We scream about gas prices all the time. As far as I know? It’s always been a product that’s gouged as far as gouging can go. I’m just more than a little surprised people are freaking out now instead of several years ago.
I’d be all for the price per gallon hovering around a standard mark-up rate of any other product one can buy. Several zillion percent isn’t exactly my idea of a fair rate. Which is the reason for my sarcasm in the initial post.
Let’s say gas is $3/gal. And we cut out the $0.50 or so in taxes. Let’s be generous and say it actually costs $1 to produce a gallon. That’s still a giant profit for mega-oil. Reality is that their profits are way higher.
Don’t get me wrong– capping gas prices or refining profits wouldn’t help anything. Could have a negative effect. There’s surely a solution somewhere, though.
The cost to produce one gallon of gasoline is minimal to an oil company. Even with the increased cost per barrel of crude oil– the mark-up is a bitch. And with *profits* (that’s after all the bills, payroll, non-existent taxes are paid) for some companies nearing US$10billion? It’s high time we examine the actual value of gasoline instead of using it with wild abandon.
Something most people don’t realize: the costs of distribution, marketing, refining and even state & federal taxes have decreased (or at most, stayed the same) over the past few years.
3 David Adams // Aug 21, 2007 at 7:08 pm
Average profit margin for “big oil” companies is 8%. That’s even with decreases in several of the fixed costs. Your problem is with crude oil and supply of refined oil versus world-wide demand for gasoline.
4 mikebailey2000 // Aug 21, 2007 at 10:13 pm
Gas should probably cost a dollar more, with that dollar going to invest in future technology/research, and the infrastructure changes needed to implement that new technology. Also, the higher price would force consumers to consume less, choosing alternatives rather than guzzling fuel like bingeing frat boys. As consumption dropped, prices would plummet. One of the big problems with gas right now is the inelasticity of demand. In other words, cost can go up markedly without folks changing habits much. But if you toss another dollar on there, I bet some folks will ride the bus, get a bike, or otherwise “come to Jesus” on conservation.
5 David Adams // Aug 22, 2007 at 7:24 am
Mike,
I thought you DFA guys liked poor people. It’s the inelasticity part of the equation that kills people with limited disposable income if you “toss another dollar on there.” Groceries still have to be transported and after we subsidize corn on the backs of taxpayers, price fix and trade-protect milk on the backs of shoppers, and sin tax gasoline to manipulate the elastic part of the demand, prices for everything else goes up whether you ride to bike to Kroger to pay union prices or not.
6 Steve Magruder // Aug 22, 2007 at 10:57 am
David, to reiterate what Mike said, people will choose alternatives if the price of gasoline is too high for them. We need to be getting more people carpooling or using public transportation anyway. Why? — it’s simple — the world is beginning to run low on readily available fossil fuel reserves and no effective society-wide replacement is in sight. Conserving should be what conservatives can deal with, right?
I’m amazed that some people don’t seem to get that gasoline prices are going to continue rising and hurting the poor _no matter what_. So we may as well start doing some reformatting of our society’s habits so we can all adjust for what’s coming. It’s either now or within the next decade. Pick your choice. I would prefer we no longer procrastinate on this matter.
America’s overconsumption of energy needs to be dealt with, or we’re heading toward an energy crash that will destroy the economy. And that will definitely hurt poor people in this country even worse than having them consider transportation alternatives.
7 David Adams // Aug 22, 2007 at 1:35 pm
Steve, what alternative to food will we choose as the government meddling such as you propose continues to increase its price?
And your assertion that gasoline prices are going to continue to go up no matter what has no basis at all other than some kind of perverse wishful thinking.
And where did you get the idea we are heading toward an economy destroying energy crash? Did Al Gore or Michael Moore put out another movie?
If you deal with American “overconsumption” but don’t do anything about energy usage by the rest of the world, you are wasting your time. The Bush administration has it right. Increasing production is the key.
My money is on nuclear.
8 jake // Aug 22, 2007 at 1:46 pm
Google “peak oil” – it’s something both Michael Moore and Al Gore have tossed aside various times. Many debate when we’ll hit ‘peak’ but no one disputes that it will happen.
We can’t really increase production. There’s not much left to produce. The world was already at 90% 3-4 years ago.
Basis for gasoline prices continuing to go up include: well, they’ve gone up steadily since gasoline was $0.02 per gallon, free market inflation, rise in demand, or even mega-oil profit desires (if you prefer to think it’s all Exxon’s fault). There’s no way to dispute that prices will increase. Regardless of political ideology.
Maybe Steve means the U.S. needs to catch up with the rest of the world’s modern countries when it comes to dealing with overconsumption? Maybe those countries with real mass transit systems? And I’m not talking Louisville’s difficult to navigate TARC system.
9 Steve Magruder // Aug 22, 2007 at 2:34 pm
David, your position on food is rather melodramatic. Even with higher gas prices, food prices are not out of reach for most people. And food distributors have various methods for reducing transportation costs during crunches.
And for you to assign “perverse wishful thinking” to what is actual reality is rather telling. The world is absolutely running out of readily available fossil fuels, or are you denying this? And when supply goes down, and/or the cost of retrieval goes up, the price goes up. Not hard to understand.
Also, it is beyond obvious that an economy dependent on easy, cheap energy is heading toward an economic crash if we don’t reconfigure our use of energy. Nuclear is one feasible approach as long as newer technological approaches are utilized and a reasonable way to deal with waste is found. It’s not a golden hammer, however, and you certainly know that. Otherwise, you will be telling me how everyone will be driving nuclear-electric-powered cars within five years — yeah, right.
10 Steve Magruder // Aug 22, 2007 at 2:39 pm
Also re: food, I meant to add there is a growing movement toward more locally grown/produced foods, and that takes some of the strain out of energy consumption. So, even if fuel costs continue to rise, there are alternatives that can be looked at. People don’t act in a vacuum — they usually respond to crises with solutions. I guess in David’s world, everyone just cries and gives up whenever they face a challenge.
11 Steve Magruder // Aug 22, 2007 at 2:44 pm
Jake, yes peak oil is real, and when the peak is hit is certainly something that is disputable. What’s important to note about this is that on the “other side of the curve”, extraction costs go up, up, up as we run out of the easy-out drilling locations (and we will run out — no political ideology can escape this reality).
Also, yes, it’s high time for Americans to get very serious about mass transit, carpooling, biking, etc. This addiction to the nearly-free energy ride is going to be our economy’s end if we don’t start adjusting as soon as possible.
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