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Price
at the Pump
If you look at the explanations for high gasoline prices offered by the media,
we see two offered. One is a shortage of refineries. That is obviously untrue
since we had the same shortage of refineries when prices were much lower.
Another false claim is that gas for pumps requires many different refining
processes because of local conditions and legal requirements as in California.
Here again, the same argument applies. Why didn't those same requirements raise
gas prices earlier?
The excuses don't stand scrutiny. The real reason
for increased gas prices is increased profits for big oil.
For instance The Seattle Times reports
1/29/04 that:
"Strong
oil prices, lower production costs and better refining margins helped Conoco
Phillips to a first-quarter profit of $1.6 billion, a 32 percent increase from a
year ago."
If you take the lower price of $1.70 a year ago
and add 32 percent you get $2.24, which is where prices are going today.
So, like most
economics under capitalism, the profits go up and living costs go up. Which
reminds us that everyone is expecting inflation and rising interest rates this
year increased
gas and oil prices and profits are a direct stimulus to inflation since raises
in gasoline costs raises costs all along the money chain as they are added to
all costs of transportation. But if rising gas prices were the only problem we
face economy-wise we might not be too bad off. But their are a few rather more
profound economic difficulties facing us. One has to do with the foreign trade
deficit (the dollar difference between imports and exports) which has to do with
Longshore jobs. The U.S. has been allowing the trade deficit to
increase
recklessly because we are financially dependent on foreign subsidy of our
national debt. Simply, it means we buy their goods so they will
buy our C.D.'s. That's an economic balancing act that will collapse from
top-heaviness. This is pointed out in The Seattle Times again, 1/28/04,
"The dollar's dramatic slide against the euro
and British pound has already had major real-world impacts, mainly for the good
of the U.S. economy.
But over the long term, the fall of the mighty
dollar, driven by the United States record trade and budget deficits, raises far
more ominous fears. . . rising interest rates, falling stock prices and
unavoidable decline in the nation's living standard.
The engine of the global economy, the U.S., is
running not on gas but on fumes, on little more than tax cuts and
borrowing," Morgan Stanley chief economist at Davos, Switzerland."
So what does
it all mean for our future? We have a fine quote from "Jobs," an
AFL-CIO special report, courtesy of the Puget Sound ARA Alliance:
Everyday
in America
85,444 workers lose their jobs 14.7 workers are jobless, underemployed
or have given
up looking for work. 43.6million people have no health insurance.
4,277
people file for bankruptcy. 12,878 workers are injured or made ill by their
jobs. 6.8 million people are in the workforce but are
still poor. 11
million children attend broken down schools."
But that is
now. What will it be here on out? We have yet to mention Iraq war, global
warming, poison air, water and food. Plus a Bush administration that ignores all the
warning signs and seems to thrive on chaos and U.S. decline.
Which puts us
in mind of that brilliant quote from Kurt Vonnegut, famous American novelist:
I refuse to
have anything to do a federal administration that has a bush, a dick and a colin
in it."
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