Monday morning I was at the gas station filling my tank as I watched the employee changing the gas prices on the sign. The first price that was put up was $4.03. I thought, "Well, we’ve hit the $4/gallon mark. Wonder if it will continue up to $5 or $6 like some experts have been predicting."
Then I got thinking and remembering previous events concerning gasoline in my life. The first notable event was the 1979 gas shortage during Democrat President Jimmy Carter’s term. You could buy gasoline only on alternate days. Your day to buy depended on the last number of your license plate – odd numbers bought on odd numbered days and even numbers bought on even numbered days.
Of course, with the law of supply and demand, the price of gasoline went up dramatically. The gas lines were very long and the customers were not, to put it kindly, in good moods. Many people ran out of gas while in line and pushed their cars to the pumps. Sometimes the gas stations ran out of gas. I was unfortunate enough to live a block and a half from a gas station. Most of the time the people in line wouldn’t even let me drive into or out of my driveway. I think they thought I would cut in line. Believe me, no way would I have tried to cut into those lines – I like being alive!
There was a lot of media about the problem and the causes but I don’t recall a lot of blame being placed on the president nor a lot of demands that he had to fix the problem. The gasoline shortage ended but gasoline prices never returned to the old level.
The next notable event was four years ago. Gasoline prices rose rapidly to around $4/gallon. (Some places it was over $4/gallon; most places the price hovered just under $4.) The media went crazy! The reporting was constant. Reporters were telling us how bad it was, how it was hurting individuals, the country and the economy, what the president should be doing and how he was to blame for the prices. President George Bush, a Republican, received a tremendous amount of negative publicity – both personally and about the job he was doing – because of the high gas prices.
Listening or reading most media (TV, radio and newspapers), you would have thought that the evil and greedy Republican, President Bush, was personally raising the prices and that he and his evil cohorts in crime were making huge personal profits through this. The only media outlets I remember not blaming the president were Fox News and some conservative talk radio hosts. Fox News seemed to be the only major TV network that was telling the truth. The president has very little short-term effect on gas prices. The prices were being driven up by a combination of speculators in the oil futures market and supply and demand.
Candidate Barack Obama, in a widely broadcast 2008 campaign ad, blamed the $3.50/gallon gas price on oil companies and Washington. (He also stated in the ad that he didn’t take money from lobbyists. That was just one more of his many lies!) At a speech in Indianapolis, on April 25, 2008, candidate Obama promised to lower gas prices if elected and pointedly blamed Bush and Cheney for the $3.55/gallon price.
Now, three years into Barack Obama's presidency, gas prices have skyrocketed again. I hear the same complaints from the people that I heard four years ago but the media coverage is TOTALLY different. The only blame I hear aimed at President Obama, a Democrat, is the occasional mention of his hostile treatment of the oil industry for the past three years that has negatively affected supply. (Remember the law of supply and demand – less supply = higher prices, less demand = lower prices.) Mostly I hear that there is very little he can effectively do to lower the gas prices. Oh! The benefit of being a Democrat with the liberal media reporting!
80% of the price of gasoline is a result of the price of oil. Oil and other commodities are seen as hedges against inflation and the falling dollar. (We can thank the Federal Reserve for both of those, but that is a different story to tell.) As oil prices go up, the price of gas has to go up. Businesses need to make a profit in order to stay in business.
People hear the oil companies made $40 billion in profits last year and get upset. The politicians and media blame the oil corporations for making "obscene profits" and threaten windfall profit taxes on the oil companies. But few people bother to think about the fact that the oil companies pay income taxes. In 2010, just Exxon Mobil alone paid $1.3 billion in Federal income tax and $340 million in state income taxes. The companies also pay dividends from profits. People who hold stock in the oil companies, as well as funds that contain oil stocks (including many retirement funds), receive these dividends. Besides the income taxes they pay, they also pay property taxes and gas taxes.
The governments, which have none of the risks or costs of the oil industry doing business, get money from each gallon sold – 18.4 cents per gallon to the Federal government and varying amounts to the individual state and local governments. Oil companies only make about 2 cents profit per gallon of gas sold. Think about it.
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