Why gas is soaring
What — or who — is zooming gas prices?
On March 28, Bill O'Reilly reported “the gas price has doubled under Obama,” from $1.84 to $3.91. He largely left out the adjoining history of gas prices, which tells us what is really determining what we pay.
In July 2008, during the Bush2 administration, the price of oil somehow hit $140 per barrel. In January 2009, that price was $40 per barrel, a decrease of $100 or 71 percent. According to the International Energy Agency, global oil demand during this period decreased from 86.6 million to 85.6 million barrels per day, a decrease of 1.2 percent. Why does the oil price fall by $100 in Bush2's last six months of office while the demand falls by 1.2 percent?
One factor is dollar appreciation. In the last six months of 2008, the DXY index increased by about 20 percent, taking $30 off of the per barrel price. What about the rest of the $100?
Dan Dicker, author of “Oil's Endless Bid,” was interviewed on CNBC on April 17. He said about this period: “We do have one case in point, in the deleveraging that happened after the financial crisis of 2008, where we literally saw all the money, speculative and otherwise, leave the oil market except that money that had to be there from true hedgers, we got down to a $32 price.”
So 140-32-30 = $78, roughly 50 percent, was due to unnecessary and irresponsible speculation. Dicker estimated that $40 of the $100 per barrel price is unnecessary speculation. Each $1 of oil price change means about 2.5 cents of gas price, so you are paying $ 1 per gallon to Wall Street money changers. The federal gas tax is 18.4 cents per gallon.
Free market anarchy is the primary cause of high gas prices — not the government. Only when the voters reject the two-party system's worship of neoliberalism will Wall Street stop plundering average Americans.
Hank Achor
Sure, vote for Romney
For the sake of all my wise, working-class, Republican-voting friends here in Fort Wayne and Allen County, I sincerely hope that Mitt Romney is elected president in November.
In other words, I most sincerely hope that my wise, working-class, Republican-voting friends get exactly what they are asking for, to include: (1) The continuation of tax cut entitlements for the country's millionaires and billionaires, (2) The continuation of tax break entitlements for the multi-national oil companies, (3) Reductions in Medicare, Social Security and other similar programs in order to pay for the aforementioned tax cut entitlements, (4) The continued persecution of the country's immigrant populations, (5) More attacks on labor unions, teachers, women and workers rights, (6) Renewed deregulation of a wide variety of industries, enabling them to disregard the environment, worker health and safety and to ship more jobs out of the country, and, most importantly of all, (7) The right to keep as many guns and as much ammunition as one can afford.
Put another way, I sincerely hope that my wise, working-class, Republican-voting friends get exactly what they are asking for: a compassionate, caring country where everyone who wants a good paying job will have one and where we take care of our seniors, the sick, the poor and all those less fortunate. How can there be any doubt Romney is the compassionate, caring leader this country needs? All one needs to do is look at his humanitarian history.
Kenneth Thomas
