The President has demanded answers as to why the price of gas is sky-rocketing and ordering Justice Department investigations into possible price fixing and gouging. Sad truth of it all is that what the oil companies are doing which is causing the gas prices to go up is not illegal. It is unethical and ultimately deleterious to the national economy… but it is not illegal.
Some time in the mid 90’s all of the US oil companies started to adopt a just-in-time inventory model, moving away from more standard stocking inventory method that they had used for the past ninety years. What this means is they stopped storing huge quantities of oil and gas in favor of keeping just enough for minimum operation and refilling inventories as demand required.
When oil companies were stockpiling oil inventories they were filling their inventory when the prices were at their lowest thus regulating the price of oil and keeping it rather steady. Any minor market fluctuations did not effect the price of gasoline because the oil company could wait on these fluctuations to pass and continue running on their remaining inventory. This inventory model is not the most efficient in the world because it places the stress of market risks on the shoulders of the companies trying to refill their inventory. So any instability in the oil market would impact the companyâ€™s profits before it impacted consumer prices.
Just-in-time inventory though requires the oil company to set consumer prices dynamically based on the oil futures market, because they are not trying to fill an inventory but instead are charging consumers today for future demand. So any time that the oil price goes up because of some bit of world instability the, the oil company increases the price of gas so that they will be able to purchase the oil futures for the gas you will be buying next week. This means that the price of oil is inflated by constant demand, thus creating a market price which inflates faster than real demand. And because the company is charging the customer for future demand all but the most extreme market adjustments net the company increased profits.
So no, it is not illegal what the oil companies are doing, but it is unethical because they are making profits off of global instability and they are playing fast and loose with the energy economy of the nation. But if the President wants to actually make a show of doing something he is going to have to make new law, law which many might consider being socialist, to bring the Oil companyâ€™s cavalier business practices under heel.
Yesterday was the annual Easter Egg Roll at the White House. This morning, there are various articles on the web talking about Gay parents who “crashed” the event. Reading it, I really had to wonder at the phrasing of it and wonder what the intention was. Growing up and even now, “crashing” an event gave a negative connotation to it. It made a note that you were somewhere you weren’t supposed to be and were there without the approval of the people hosting the event. I’m sorry, but I simply don’t see the need for that phrasing.
If Gay couples had gone there with their children in an attempt to throw their relationship in the face of everyone there and make a scene, I could understand the label. If they had marched up to the gate in unison, wearing t-shirts and carrying signs declaring their sexuality, I could understand the label. If they had done anything that would have been seen as disruptive to the event itself, I could understand the label.
None of that happened, however.
Gay couples showed up with their children, the sole identifying item they were wearing being the rainbow colored leis around their necks. There was no chanting, picketing, or yelling. There were simply parents who came out to take part in an open event hosted by the President and the First Lady, wanting to share this experience with their children.
I truly think the media is doing a disservice to the parents who brought their children to the event in labeling them as “crashers.” They didn’t do anything to disturb the event and the one thing they did to identify themselves was tasteful and understated. By all means report what they did, but try and do it in a way that doesn’t put them in a negative light through the connotation of the words used. Doing so does nothing more than fan the flames of intolerance by giving those who are against such couples another reason to disapprove of them.
Eventually people will hopefully realize that parents, regardless of the mixture of genders, all generally want the same things for their kids. Headlines like the ones addressing this issue do nothing more than divert attention away from that one fact and polarize the people on each side of the issue even more. Of course, I suppose a desire to sell news forces impartiality to take a backseat.
Disappointing, to say the least.
Today’s post will not be presented. Instead, I would like everyone to do something in honor of the fact that today is Tax Day.
Pull out your last paystub and look it. And I mean really look at it. Don’t look at just your take home pay. I want you to look at all of the money that is going to the State and Federal Governments. Actually take a moment to realize just how much you’re paying.
After you’ve done that, I want you to take some time and think about what is being done with that money. Think about the bloat that has grown into our government and the sheer amount of pork that comes rolling out of 51 capitols each year.
If you’re fine with it, that’s your decision. If you’re not, then I ask you to take a look at some of the alternative ideas out there. Think about what could be done to make our tax system better. Think of ways it could be used to rein in the rampant spending in government and be used to remind the government of who pays the bills.
Anyone who knows me knows that I have my own personal feelings on what should be done to reform the tax code. I’m not going to stump for that particular solution today. Instead, I want to encourage everyone to think about what they would do to change the tax code or the whole tax system itself.
And think about how much more willing people would be willing to make that change if the US Congress had kept its word after World War II and had stopped paycheck withholding.