Economy headed for the dumper

[M.Dancer]

I imagine its still a lot lower that what we're paying.

Yes and if we subsized the price ours would be lower too.

Do you honestly want gas prices subsidized as opposed to taxed?

[guyser]

How much taxes are you willing to spend to subsidize my hummer?

About the same as Eliot Spitzer received.

[eyeball]

...if we subsized the price ours would be lower too.

That's right, but who's this we you're talking about? Charge more for exports and apply that profit to the benefit of all Canadians by charging less for domestic use.

[August1991]

That's right, but who's this we you're talking about? Charge more for exports and apply that profit to the benefit of all Canadians by charging less for domestic use.

Why only charge less for gasoline? Why should the government only reduce the price of gasoline? As Morris noted above, it could also reduce the price of Hummers too.

Indeed, if the government subsidized domestic gasoline use, it would indirectly be subsidizing gas-guzzling Hummer drivers.

If the government is going to use tax revenues to subsidize people, I can think of many, many more worthy cases than gasoline buyers.

[Wild Bill]

Why only charge less for gasoline? Why should the government only reduce the price of gasoline? As Morris noted above, it could also reduce the price of Hummers too.

Indeed, if the government subsidized domestic gasoline use, it would indirectly be subsidizing gas-guzzling Hummer drivers.

If the government is going to use tax revenues to subsidize people, I can think of many, many more worthy cases than gasoline buyers.

It sounds to me like we are victims of diversion, once again. We're pointing fingers at each other as to who drives the least efficient vehicle, as if that's what's driving prices up. If hummer drivers pay for their own gas I don't care how much they need. It won't reduce my costs!

Politicians are getting us to fight with each other so that we won't look closely at THEM! We have high gas prices because the oil companies CAN! They have no competition! We have only a few oil company players. They don't need an organized conspiracy. They can simply operate under a "gentleman's agreement".

It's called an oligopoly. They only have to fear political pressures. They've handled that by contributions and a situation where the GST is applied ON TOP of all the other taxes at the pump! This "tax on a tax" situation is supposed to be illegal yet no government whether Liberal or Tory has corrected it since it was implemented. Why should they? The more the cost goes up the higher the tax revenue for the Feds.

Supply has been carefully controlled so that the slightest glitch in the supply chain can be used as an excuse to hike prices. A hurricane in New Orleans? Hike prices. An earthquake in Ebonia? Hike prices.

If Petro Can had truly wanted to fulfill its official mandate to act as a lever on gas prices it would have built a new refinery or two! We haven't seen any new ones in 30 or 40 years. Part of this is because of incredibly expensive extra costs for environmental controls but when it was a government company it could have found a way around much of this. The laws are always more stringently applied to private companies than public ones. Having more refining capacity would have helped to keep prices down.

No, the situation is the way it is because both the oil companies and the government have vested interests to keep it that way! Meanwhile, every time we cry out in pain we get told that it's OUR FAULT! We drive a car that's not efficient enough or grandmothers just refuse to bicycle in the winter or we haven't sealed up our entire homes with foam insulation and on and on and on....ad nauseum.

As a people if we had any brains we would refuse to accept these guilt trips and go after our politicians for allowing this situation.

Until we do we deserve whatever we get. Bend over. Whaddya want? Regular or Premium?

[Topaz]

I think the only way Canadians are going to beat the oil companies is to reduce demand. The auto sector can help by building more autos that don't need gas . I do remember hearing a CEO to one of the oil companies say on the radio if the demand went down they would still up the price, so in other words they won't be the ones to suffer??? The radio said today oil is heading to $200. a barrel and the US drive will be paying $10.00 a gal. so would that put Canadians at 2.50 or so a Litre?? I can this affecting insurance companies when people say I'm not driving anymore, I take the bus bike, motor bike, etc. I can see the surplus of IE going down so if the Cons were going to use the money from there to keep from going into the red, they may not have the money there to do it.

[August1991]

Politicians are getting us to fight with each other so that we won't look closely at THEM! We have high gas prices because the oil companies CAN! They have no competition! We have only a few oil company players. They don't need an organized conspiracy. They can simply operate under a "gentleman's agreement".

Wild Bill, that's nonsense.

You would have us believe that the greedy, rapacious, evil oil corporations rip the public off but they won't try to rip each other off. Huh?

Conrad Black, a rather typical evil capitalist, was trying to cheat his partners. Why would the oil companies be any different? The idea of a "gentlemen's agreement" is laughable, and your reasoning is also curiously inconsistent. On one hand, you believe the oil companies are greedy with us and then on the other hand, you believe that they become all sweet and nice with each other. Sorry, your logic doesn't add up.

[punked]

Know why this tread is awesome? It is because all the left wingers are like let the market set the price of gas, and all the right wingers are saying government interference, regulate, and subsidize. HAHAHAHA I love it.

[M.Dancer]

Know why this tread is awesome? It is because all the left wingers are like let the market set the price of gas, and all the right wingers are saying government interference, regulate, and subsidize. HAHAHAHA I love it.

You are confused. The price is already set by the market, it is the government that adds costs (3 diffenent taxes and levies) and it's a left winger (eyeball) who wants to subsidize the price.

[White Doors]

Know why this tread is awesome? It is because all the left wingers are like let the market set the price of gas, and all the right wingers are saying government interference, regulate, and subsidize. HAHAHAHA I love it.

your laughter is misplaced. I am a right winger and believe that higher gasoline prices will be good for the environment and good for the economy.

bring them on I say.

[Wild Bill]

Wild Bill, that's nonsense.

You would have us believe that the greedy, rapacious, evil oil corporations rip the public off but they won't try to rip each other off. Huh?

Conrad Black, a rather typical evil capitalist, was trying to cheat his partners. Why would the oil companies be any different? The idea of a "gentlemen's agreement" is laughable, and your reasoning is also curiously inconsistent. On one hand, you believe the oil companies are greedy with us and then on the other hand, you believe that they become all sweet and nice with each other. Sorry, your logic doesn't add up.

I'm curious. Do you have a background in business? I spent my career in high tech sales. NOBODY in a marketplace wants a price war!

The name of the game is NOT to sell more product than the other guy. The goal is to make more MONEY than the other guy!

If an oil company lowers its price it will of course sell more litres than its competitors. So what? It will also have reduced its profits! Why bother? Particularly with a product like refined gasoline. People have to buy gas to get to work and cope with their lives, no matter what the cost. If you have only a few sources and they all keep their prices up they end up with much more profit than if they choose to keep beating each other up.

Just as a sidebar, when you hold Black up as an example of "a rather typical evil capitalist" you might consider the case of Andrew Carnegie a century or so ago. He was the owner of Standard Oil and was targeted by the American government for being a "greedy monopolist". After being dragged through the courts his company was eventually busted into many smaller ones, in order to "promote competition" and "get a cheaper price for the 'little guy' ".

The interesting thing is that after Standard was broken up and Carnegie given his comeuppance the price of gas to the "little guy" went UP! Just as after the government busted Conrad and took over his company the company net worth spiralled into the ground! They destroyed the company in order to protect the shareholders from evil Conrad.

I'm not defending the oil companies in Canada. Just pointing out that I think you are unclear in both your logic and your examples. If you ran a company that provided my pay check I think I'd quietly start sending out my resume...

[eyeball]

The price is already set by the market, it is the government that adds costs (3 diffenent taxes and levies) and it's a left winger (eyeball) who wants to subsidize the price

Thre price of most things may be set by demand but suppliers of a scarce commodity, like oil, can obviously have a bearing on prices, ie they can jack them up anytime they feel like it. This happens all the time.

And fir the record I do not want to subsidize the price of oil. I want to charge a higher premium to our foreign customers and pass the resulting profits on to the original owners of our oil, Canadians.

To paraphrase WD I am a left winger and believe that higher gasoline prices will be good for the environment and good for the economy.

Pass them on I say.

[August1991]

I'm curious. Do you have a background in business? I spent my career in high tech sales. NOBODY in a marketplace wants a price war!

The name of the game is NOT to sell more product than the other guy. The goal is to make more MONEY than the other guy!

I suppose so but your admission strikes at the problem of any cartel. How to divy up the "spoils". You can be sure that each one wants to get a bigger slice ofthe action.

IOW, it's always better to be outside a cartel than inside one and cartels, unless they have government backing, tend to unravel. The idea of a "gentlemen's agreement" in the world oil market is laughable. Saudi Arabia, as a major player, can boost the price somewhat but at the cost of lower production.

I find your logic curious. In your view, the oil companies behave one way in one situation and another way in another situation. And whatever they do, you lose. I don't call that critical reasoning; I call that finding someone to blame.

And BTW, it was Rockefeller and not Carnegie who founded Standard Oil and then saw it divided by the government.

Thre price of most things may be set by demand but suppliers of a scarce commodity, like oil, can obviously have a bearing on prices, ie they can jack them up anytime they feel like it. This happens all the time.

By that logic eyeball, why didn't they jack prices up two years ago? Why don't they jack the price up to $2/litre now?

Why do they let the price ever fall?

Edited April 29, 2008 by August1991

[M.Dancer]

IOW, it's always better to be outside a cartel than inside one and cartels, unless they have government backing, tend to unravel.

OPEC being the glaring exception.

[August1991]

OPEC being the glaring exception.

On the contrary. The UK, Russia, Norway and even Canada, for example, all benefit as non-members. We're under no obligation to curtail production or respect OPEC production quotas yet we (eg. Newfoundland and Alta) benefit from a high oil price.

[eyeball]

By that logic eyeball, why didn't they jack prices up two years ago?

They did, and still are.

Why don't they jack the price up to $2/litre now?

They will soon enough.

Why do they let the price ever fall?

Appearances sake? Obviously there is a demand componant to prices, but demand is not the only thing that drives prices. Greed is often a factor, and so is need.

[M.Dancer]

They did, and still are.

They will soon enough.

Appearances sake? Obviously there is a demand componant to prices, but demand is not the only thing that drives prices. Greed is often a factor, and so is need.

you mean demand.....or were you going for the rhyme?

[Wild Bill]

I suppose so but your admission strikes at the problem of any cartel. How to divy up the "spoils". You can be sure that each one wants to get a bigger slice ofthe action.

IOW, it's always better to be outside a cartel than inside one and cartels, unless they have government backing, tend to unravel. The idea of a "gentlemen's agreement" in the world oil market is laughable. Saudi Arabia, as a major player, can boost the price somewhat but at the cost of lower production.

And BTW, it was Rockefeller and not Carnegie who founded Standard Oil and then saw it divided by the government.

Sorry, perhaps I wasn't clear. I never meant (nor said!) I was talking about an agreement on the world level. I was only referring to the players within Canada. I'm not convinced that the world price of crude is the major factor in the price we pay at Canadian pumps. If that were the case then we would always have had parity with the pump price in the States. History shows that whatever the world price of crude we Canucks still always pay a hefty premium.

I'm saying executives of CANADA Shell or Exxon or whatever have a "gentleman's agreement".

Thanks for the correction about Rockefeller and Carnegie. My brain worked better before the kids came. Still, the mistake was in my model and not my point. The official reason for Trust busting is always given as to protect the public interest yet it always seems to cost us more in the long run. I'm sure anyone with any stock in Black's company is feeling very resentful of the US government after all is said and done.

[guyser]

.

I'm saying executives of CANADA Shell or Exxon or whatever have a "gentleman's agreement".

Is that not called collusion?

[oreodontist]

On the contrary. The UK, Russia, Norway and even Canada, for example, all benefit as non-members. We're under no obligation to curtail production or respect OPEC production quotas yet we (eg. Newfoundland and Alta) benefit from a high oil price.

Aberta, Newfoundland..and Saskatchewan. And any provinces that produce energy via coal or hydro as they compete for end user consumption.

People are too steeped in short sightedness to not understand that for every cent raiseed in oil prices that it's a boost to the Canadian economy via a stronger dollar, better balance of payments, etc. reflected in high value in Canadian investments. We figured we spent $16 more on fuel than in March....but our mutual funds and Canadian stocks have rose $3400.

[sharkman]

Hmm, and just what does an oreodonist do?

[HisSelf]

They did, and still are.

They will soon enough.

Appearances sake? Obviously there is a demand componant to prices, but demand is not the only thing that drives prices. Greed is often a factor, and so is need.

If you watch the Business News Network channel there is a raging debate on this among a lot of people one would think expert on the subject, so the debate here is not surprising. There are those who say that the price of oil is entirely demand driven, and there are others who say speculators (i.e. fear and greed) have gotten into the market and made it behave outside of its natural demand curve.

Time will tell, but it is hard to ignore the fact (according to CIBC Chief Economist and Strategist Jeff Rubin) that demand growth as a result of the US economy over the past 3 years has been zero, adn that all oil demand growth has been coming from Asia.

[M.Dancer]

. There are those who say that the price of oil is entirely demand driven, and there are others who say speculators (i.e. fear and greed) have gotten into the market and made it behave outside of its natural demand curve.

Speculators are not removed from demand, in fact without the demand equation there would be no specualtion about where demand will be...you are either betting on increased demand or you're shorting on a lower demand....the money rides one way or another.

[oreodontist]

Speculators are not removed from demand, in fact without the demand equation there would be no specualtion about where demand will be...you are either betting on increased demand or you're shorting on a lower demand....the money rides one way or another.

Canadians just 'asume' when they turn a switch the light goes on or when the thermosat is turned up, the furnace will go on. Most have no idea what that molecule of natural has went though to ensure constant and efficient use of utilities. Their utility providers are out there all day, every day, trying to guarantee supply by buying and selling product. All these 'evil speculators should all go on vacation for a week and either there will be no gas in the line , or, when you get your bill, the rate will have doubled. A demand economy in which the market is ifne tuning supply to meet demand is very efficient.

Edited April 29, 2008 by oreodontist

[HisSelf]

Canadians just 'asume' when they turn a switch the light goes on or when the thermosat is turned up, the furnace will go on. Most have no idea what that molecule of natural has went though to ensure constant and efficient use of utilities. Their utility providers are out there all day, every day, trying to guarantee supply by buying and selling product. All these 'evil speculators should all go on vacation for a week and either there will be no gas in the line , or, when you get your bill, the rate will have doubled. A demand economy in which the market is ifne tuning supply to meet demand is very efficient.

Yes, but how to make the market completely transparent. That is the holy grail IMHO. To make the market open and reliably accountable to every single investor.