Amateur Megalomania

I’ve received this asinine ‘Boycott Gas’ email so many times from various sources, I just can’t ignore it anymore. If you buy into this thing, then you have some significant deficiencies in your grasp over reality and basic economic principles. Let’s take it point by point, shall we?

Subject: FW: STICK IT TO THEM

IT HAS BEEN CALCULATED THAT IF EVERYONE IN THE UNITED STATES DID NOT PURCHASE A DROP OF GASOLINE FOR ONE DAY AND ALL AT THE SAME TIME, THE OIL COMPANIES WOULD CHOKE ON THEIR STOCKPILES.

Hey Einstein, this is pretty much true for every industry that supplies a voracious public. You think McDonalds would have an inventory problem on hamburger patties if everyone went vegetarian? The very fact that we have been living on the knife’s edge of adequate supply has something to do with recent volatility. But I’m sure that last sentence probably sailed well clear of comprehension.

AT THE SAME TIME IT WOULD HIT THE ENTIRE INDUSTRY WITH A NET LOSS OF OVER 4.6 BILLION DOLLARS WHICH AFFECTS THE BOTTOM LINES OF THE OIL COMPANIES.

I’m not even sure where to start here. Let’s start with the idiotic and move up to the mere vindictive. I’m not in a position to fact check if the daily profit margin of the petroleum industry approaches $4.6 billion…well, maybe I am. $4.6 billion times 365 is $1.67 trillion dollars. That tells me I need to buy some oil stock. It is more likely the number represents the average value of the gas that is not sold on one day.

So, what happens the next day?

If you park your car for the whole day, good for you. At least you have the commitment to follow through with your boycott. But for maximum effect you’d have to advocate the complete cessation of all oil consumption for a 24 hour period. Otherwise, people will be using the same amount of fuel and just buy it the next day. I don’t know if you are aware, but oil inventories are managed and distributed on a weekly schedule, not daily. Unless you reduce consumption, you aren’t even going to cause a blip.

But if you do manage to get the nation to shut down for 24 hours, what would you accomplish? Ground all the airlines, at several hundred million dollars a day. Stop all interstate rail, with subsequent disruptions in material deliveries. Shut down factories which are built around the concept of Lean Manufacturing (or Just In Time inventory). Work stoppages effecting millions of people, with loss of income.

Yeah, that’ll show the big oil moguls. Take a lot of struggling businesses who can’t afford a single day of lost revenue and put them out of business.

I don’t know about you, but it makes me feel all tingly and powerful.

Moving on from stupidity to the vindictive, let’s assume that your only purpose here is to inflict a massive loss of revenue on the petroleum industry. For the life of me, I can’t understand a mentality that wishes to inflict economic punishment on an industry that provides a strategic resource (see the benefits of oil in the above paragraph). Sounds to me like you would be all for bankrupting doctors in the middle of an epidemic. Great strategy.

Assume that you do inflict a massive hit on the oil industry. Suddenly it is less profitable to be a refiner or distributor of gasoline. And this loss of profitability comes precisely when we need more drilling, more refineries and more distribution to combat the high prices that is setting you on edge in the first place. I don’t know about you, but if I need more housing, my first thought isn’t about persecuting the housing industry. I wonder how you encourage your children to succeed? The beating will continue into moral improves?

Fortunately for the oil companies, the best tool you can come up with is an ineffective boycott. I think I’ll buy that stock anyway.

THEREFORE Sept 10TH HAS BEEN FORMALLY DECLARED “STICK IT TO THEM DAY” AND THE PEOPLE OF THIS NATION SHOULD NOT BUY A SINGLE DROP OF GASOLINE THAT DAY.

THE ONLY WAY THIS CAN BE DONE IS IF YOU FORWARD THIS E-MAIL TO AS MANY PEOPLE AS YOU CAN AND AS QUICKLY AS YOU CAN TO GET THE WORD OUT.

WAITING ON THIS ADMINISTRATION TO STEP IN AND CONTROL THE PRICES IS NOT GOING TO HAPPEN. WHAT HAPPENED TO THE REDUCTION AND CONTROL IN PRICES THAT THE ARAB NATIONS PROMISED TWO WEEKS AGO?

Blah blah blah.

Now we come to the most breathtakingly idiotic and dangerous idea in the entire email. Anyone who ever utters the word ‘control’ anywhere near the word ‘price’ has disqualified themselves from any sort of respect or regard. It amazes me that after a few hundred years of economic history, or even a few decades of unbridled socialism/communism, people still advocate price controls. It makes me sad for the human race.

I’m not going to waste my time with Economics 101, since the effort would be entirely wasted, but I can’t help but touch on a few basic facts. You Gas Price fanatics have a case study that should be near and dear to your hearts. Anyone remember the ‘crises’ of 1973? Remember the gas lines? Anyone care to guess what caused them?

Richard Nixon imposed price controls during the embargo. Your precious controls were enacted, and the result was utter chaos.

Because price controls hold the price of an item at artificially low levels. This encourages hoarding or frivolous use, and discourages the profit motive of providing more fuel to meet demand. Why should anyone bust their butt to ship in fuel or explore for more sources when there isn’t sufficient profit to make the investment worthwhile? So people buy at low prices while no one supplies any more.

Get the picture? If 1973 isn’t enough for you, flip open a history book and look up Eastern Europe or the Moscow Food Lines that made living under communism such a quaint experience.

When prices are free to float to the market level, high prices work to conserve a dwindling supply. It discourages Joe Neighbor from taking the bass boat out for the weekend, making that supply of fuel available for someone who has a critical need, such as fueling an ambulance or fire truck. If you cannot comprehend the wisdom of such a system, then you are doomed.

The answer to high gas prices is in production. We’ve already seen what gas does for us, and while conservation is a noble goal, it isn’t reasonable to expect us to be able to make massive adjustments in consumption overnight. I’m all for alternative fuels when they make financial sense, and we are approaching that day with the current price levels (as a matter of fact, these prices are going to carry us into hybrids and hydrogen fuel, so this is actually a very good thing in the long run). But conservation is not the answer.

Furthermore, while the US consumes 25% of the worlds oil supply (and we’re making good use of it), China and India are in the rapid progress of modernization. China particularly is entering the modern age, the age of petroleum. What’s going to happen when a billion people begin using oil at the rate of the average US consumer? When those oil tankers pull out of the Persian Gulf, China is right there bidding on that supply, driving up prices.

Who’s going to organize the Chinese gas boycott? You speak Mandarin?

Production has been neglected by three decades of ignorance and stupidity made into law at the hands of our electorate. We haven’t built a new gas refinery in 26 years (ironically the last new one was in New Orleans). We have shut down about every major effort to explore for new sources here in the US. We haven’t built a nuclear power plant in ages.

All because the voters want cheap fuel, but don’t want to go find it themselves.

And you wonder why it is so important to be in the Middle East?

Idiots.

The current pricing level is the inevitable conclusion of thirty years of idiocy. If you have ever opposed the growth of the petroleum industry, I hope you really enjoy your fifteen minutes at the fuel pump this week.

You’ve earned it.

REMEMBER ONE THING, NOT ONLY IS THE PRICE OF GASOLINE GOING UP BUT AT THE SAME TIME AIRLINES ARE FORCED TO RAISE THEIR PRICES, TRUCKING COMPANIES ARE FORCED TO RAISE THEIR PRICES WHICH EFFECTS PRICES ON EVERYTHING THAT IS SHIPPED. THINGS LIKE FOOD, CLOTHING, BUILDING MATERIALS, MEDICAL SUPPLIES ETC. WHO PAYS IN THE END? WE DO!

WE CAN MAKE A DIFFERENCE. IF THEY DON’T GET THE MESSAGE AFTER ONE DAY, WE WILL DO IT AGAIN AND AGAIN.

SO DO YOUR PART AND SPREAD THE WORD.

Wow, a glimmer of economic understanding here! Yes, oil affects the price of EVERYTHING. And the last time I checked, consumers bear the expense of consumables. I fear the new level of idiocy this question may generate, but who else should pay?

Based upon the content of this email, I admit to being impressed that someone with such an intellectual defect actually managed to compose and send an email. Maybe someday you’ll get a hang of the CAPS LOCK key…

Enjoy filling up!

Filed under: Politics