Here’s a good article on the price of gas.

http://money.cnn.com/2008/03/13/news/economy/gas_gallon/index.htm

It took me a long time to understand the Law of Supply and Demand. We covered it in high school and the most important point was missed. Even in college Economics, the point was glossed over. It wasn’t until many years later I heard Milton Friedman explain it with the proper emphasis.

First, let me give an example I run into on almost a daily basis. The taxis around here do have meters but almost all of the drivers claim they are busted. When I take a taxi from the bus station to home and the meter does work, the fare comes to about 35 pesos ($2.88.) With a broken meter, they usually ask for 30 pesos ($2.47.) Sometimes, one will ask for 45 pesos ($3.70.) That’s almost 30% over the going rate and although I can afford the 82 cent difference, does it make sense to get taken? So, I go, “¡A poco! íMe cobran 30! (WTF! They usually charge me 30!) Right away, we settle for 30 or 35.

The missing point is that price settles where the seller is WILLING to sell and the buyer is WILLING to buy.

Just for drill, a barrel of oil that’s used to make gasoline yields about 42 gallons of gasoline. I can’t find a good figure on what percentage of oil produced is used to make gasoline. Let’s say half.

The average price of a gallon of gas is around $3.15.

A monthly Metrocard for the NY Transit System costs $104.

The average tax on a gallon of gas is $.41 or 13%.

Any monopoly other than OPEC would be loudly condemned by progressives, liberals and Democrats. They split up Ma Bell, didn’t they? OPEC can and does fiddle with supply to get the best price it can for a barrel of oil.

Speculators bet on the change in the future price. Thanks to several factors in addition to holding their oil till the “right time”, they make large profits. Is that their fault? Are they any eviler than anyone who buys stock in a company expecting to rake in big profits for retirement? Judging what effect speculators have on the price of oil is clouded by OPEC, state and local taxes and other government actions.

Now, a quick look at oil company profits. The billions of profits look obscenely large. Put it in a perspective that maps to a simpler concept. Sell off all the oil companies’ assets and let them invest the proceeds in US Treasury Bonds. The income from those bonds would be very close to the profits they make by being oil companies. What! Yes, it’s true. Along the way, millions of people would lose their jobs. Businesses that depend on the oil companies would disappear. There would be negative effects throughout the world economy. So, these “evil greedy bastards” must be staying in business for some other reason than just being evil and greedy.

How about a look at the demand side? When I lived in Las Vegas, I used a gallon of gas a day on average. 250 workdays a year at $3.15 a gallon cost me a little over $65/mo. to go back and forth to work. That guy in Queens or Brooklyn who owns a car anyway and commutes by subway for $104/mo, how is he better off? Given that that $104 fare is already heavily subsidized by taxes, his real cost is a good bit higher. What does that do to all the hype about mass transit?

Looking further, how many people spend $1000 or more on a big screen TV, pay over $150/mo. for cable TV, over $100/mo. for cell phone service, $25 or more for two people to go to the movies once a week. Am I dreaming or can the vast majority cut back on something they can absolutely do without and not lower their quality of life?

You really want to lower the price of gas or its future equivalent (biodiesel, hydrogen, wind, etc.?) Can you find anything quicker and cheaper than allowing the development of all the energy resources in the US without government interference or prohibition or subsidies?

Sacred and Profane

I started this post to describe some of the contradictions between the religious and secular in Mexico. Then a friend asked about Holy week customs in Mexico and I found this link which describes the most significant observance in Mexico:
Semana Santa in Iztapalapa
Clearly this takes things to an extreme, but similar, less real, less bloody observances are found all over Mexico.

My original article continues below.

Holy Week is a time of fasting, prayer and charity according to a banner in the church where we attended a secular chamber music concert today. Zacatecas schedules it's Cultural Festival at this time every year. It's a great showcase for local, national and international talent which attracts visitors from all over Mexico and around the world partly because kids are out of school and parents are on holiday from work. There's everything from heavy metal to ballet and beyond including a street fair with music and dancing surrounded by endless lines of booths selling trinkets and every class of edible goodies imaginable.

There's a sharp contrast between Mexico today and Spain of the 1960s where you awoke to somber music blaring from loudspeakers at dawn, all secular events were prohibited and nightly processions of penitents blocked the streets carrying heavy religious figures on their backs and shoulders. In cities like Seville and Jerez, Spain, several cofradias hold processions from their parishes each night during Holy Week. In Mexico, for the most part, the processions are limited to Holy Thursday.

I'm wondering if this dichotomy doesn't have its roots in Benito Juarez' nationalizing Church property and turning churches, convents and monasteries into museums, hotels and theaters to eliminate the Church's participation in government.

The Catholic Church enjoys complete religious freedom and other religions are not discriminated against in any way. Even though there are lots of Catholic symbols in public everywhere and all Catholic holidays are national holidays, non Catholics don't seem to be offended. Perhaps this is what the framers of the US Constitution had in mind. No national church, no politicization of religion, religious freedom for all.

In cities and beaches all over Mexico, people are partying. In the South, there are areas that look more like Mardi Gras or Carnaval than Holy Week.

Excellent Videos on the Obama Administration

http://www.glennbeck.com/content/articles/article/198/29831/?ck=1