Price of gas no longer a political issue in US?

[Imran Siddiqui]

Well I've said my piece, now he can be an idiot by himself if he wants .

[Dinner]

Originally posted by Kidicious
You obviously need more explaination since your economics is so weak.

KIDICIOUS JUST ACCUSSED SOMEONE OF HAVING A WEAK GRASP OF ECONOMICS!!!!!

[pchang]

Rising gas prices don't hurt the US economy as much as it used to. In addition, rising gas prices are an economic opportunity for lots of new technologies and companies. So, in the long run, rising gas prices aren't that big a deal.

[Ned]

Originally posted by Oerdin





KIDICIOUS JUST ACCUSSED SOMEONE OF HAVING A WEAK GRASP OF ECONOMICS!!!!!

Actually, Kid does seem to understand economics very well. It is his politics which supports Marxism that is weak-minded.

[Dinner]

It has been said that the economy is more efficient now then it was during the oil shocks of the 1970's and the high oil prices of the early 1980's so we don't feel the hit quite as bad. That plus much of the economy has shifted from manufacturing to less energy dependent services and high tech.

We do need more refining capicity plus we need more pipelines and it wouldn't hurt to build a few LNG terminals so we can begin importing ship loads of LNG.

[Dinner]

Originally posted by Ned
Actually, Kid does seem to understand economics very well. It is his politics which supports Marxism that is weak-minded.

Oh, I'll give him this thread but I'm thinking of many many threads where he claimed adopting communism would improve economic performance.

[Ned]

Originally posted by Oerdin
It has been said that the economy is more efficient now then it was during the oil shocks of the 1970's and the high oil prices of the early 1980's so we don't feel the hit quite as bad. That plus much of the economy has shifted from manufacturing to less energy dependent services and high tech.

We do need more refining capicity plus we need more pipelines and it wouldn't hurt to build a few LNG terminals so we can begin importing ship loads of LNG.

Hah!

The so-called "oil shock" was caused not by the run-up in oil prices due to the Saudi embargo, but to the oil price controls imposed by Nixon and thereafter maintained by Ford and Carter. The 70s were an economic disaster primarily caused by those oil price controls.

[Ned]

Originally posted by Oerdin


Oh, I'll give him this thread but I'm thinking of many many threads where he claimed adopting communism would improve economic performance.

Yeah, but that's where politics substitutes for knowledge and intelligence.

[Imran Siddiqui]

The so-called "oil shock" was caused not by the run-up in oil prices due to the Saudi embargo, but to the oil price controls imposed by Nixon and thereafter maintained by Ford and Carter. The 70s were an economic disaster primarily caused by those oil price controls.

Technically it was a bit of both. After all the price controls would not have been applied had it not been for the oil embargo.

Kind of like the Great Depression, yeah the main problem wasn't the stock crash (rather the tight monetary policy by the Fed while we were in recession), but it definetly had a major impact.

[Ming]

Now come on... discuss the topic... NOT THE POSTERS!

[Kidlicious]

Originally posted by Imran Siddiqui

You obviously need more explaination since your economics is so weak. See there's a concept, really simple actually, called the law of diminishing utility. Higher gas prices don't affect rich people's utility as much so they aren't concerned with them.

Um... that isn't exactly true, as JohnT pointed out. I wonder why Asian cars totally dominated the market in the early 80s? Everyone wasn't poor, so why did people buy the less gas guzzling car? Because the price matters, at least in the long run.

Two reasons. One, gas was much more expensive in the 70s, and people had expectations of high gas prices in the 80s. Two, the American cars built in the 70s were ridiculous in terms of gas milage. The only alternative were japaneses cars that were more gas efficient. That being said poor people tended to buy more gas efficient cars because they really had too. Only wealthy people could afford to buy cadilacs anymore, and so they were mostly the ones who did.

You usually have a steep demand curve with gasoline in the short run and a much flatter demand curve in the long run (It's an elasticity problem). If gas prices rise high, poor as well as rich will end up getting the cars that use gas less, even if they cost more in the short term.

Everyones demand curve is different. The wealthier you are the more inelastic your demand for cheap things is, because it's chump change too you. So the wealthier you are the less you are concerned with changes in price for gas at the lower price levels.

The law of diminishing utility usually applies to those things that increase utility, so the more you got, the less the last unit will be worth to you (compared to the first unit). It doesn't really work that well in the gas market. Even though each dollar at a certain amount is worth as much as each dollar made at less than that amount, it still has value and increased gas prices taking money away still is important, especially since every business must deal with it in some fashion.

What you are saying doesn't make any sense (that has nothing to do with you, only the topic ).

I'm refering to the diminishing utility of money. The more you have, the less you are concerned about a small portion of it being wasted. A twenty dollar increase in your gas bill is likely to go unnoticed, and certainly will have little effect on your consumption if you make a decent income.

[Kidlicious]

Originally posted by Ned


Hah!

The so-called "oil shock" was caused not by the run-up in oil prices due to the Saudi embargo, but to the oil price controls imposed by Nixon and thereafter maintained by Ford and Carter. The 70s were an economic disaster primarily caused by those oil price controls.

The main cause was inflation. The price controls didn't do anything to aggrevate inflation. In fact they probably helped the situation.

[Kidlicious]

Originally posted by pchang
Rising gas prices don't hurt the US economy as much as it used to.

Supply Shocks do hurt the economy a great deal. If it gets so bad that we have supply shocks we are in trouble. We really need to have a great decade with our economy, because in less than ten years we will face a crisis.

[Ned]

Originally posted by Kidicious


The main cause was inflation. The price controls didn't do anything to aggrevate inflation. In fact they probably helped the situation.

We seem to agree on these points. Which is why I defended you earlier when someone attacked you on economics.

[Kidlicious]

Thanx Ned