I have been wondering where the truckers have been, and they HAVE been screaming on Capitol Hill (but, perhaps not as visibly as past protests). Anyway, isn’t it interesting we don’t see ALL goods jump at the same pace as gas prices? [Bite my tongue! :p] But, every last widget that makes the US economy function doesn’t just walk to&from the factories, you know! It won’t be long before groceries aren’t the only prices spiking. I think the political machine that’s in denial here better learn how to say the “R” word before it becomes the “D” word!
Jinx, I swear I tried to find this, but no haps. Here’s the idea:
Single-panel newspaper comic. A Bum and His Dog sitting on a park bench, Bum observing a newspaper headline concerning a tax increase. Bum to Dog: “Well, once again, we’ve dodged the bullet.”
This does not logically follow. Some manufcturers may be willing to eat some loss of profit per unit. They do studies to find the optimum price point for their goods, and this doesn’t neccessarily change for every change in cost (though if costs go up too much, it will affect the optimum price point, of course) And for many the energy costs of transport may not be a significant portion of the cost of goods.
Fossil fuel costs comprise only a portion of the overall cost of any given consumer item, and that portion varies widely between different items. For food, fossil fuel costs are a major component of what it costs to deliver that product to the store. For a Microsoft Office CD, fossil fuels are a much smaller component of the overall cost of delivering that product.
Obviously, changes in fuel prices are unlikely to have a major effect on the pricing of a Microsoft Office suite, but a significant effect on a head of lettuce.
Where did you get these numbers? Here is a graph that seems to show that crude oil prices were more like $30 per barrel when the invasion began (March 2003). [The plot also shows wholesale gas prices. Don’t know exactly how much to scale them up to get retail but I can pretty much guarantee that there was not $3 per gallon gas almost anywhere in the U.S. in March 2003.]
As for the OP, I am not sure what he is saying either.
Yes, but is the cost increase due to the transportation component of the food costs (delivery costs) or because of price competition with plants being grown for ethanol? My understanding is that many farmers are switching to products that are being subsidized because they are believed* to be better for the environment, mostly corn, which then pushes out other crops like soybeans (mostly for feed) which then is grown elsewhere as the price on soybeans rise.
It’s probably relatively difficult to disaggregate the price increases into these baskets:
Price increase directly related to fuel increases.
Price increases because of demand (indirect).
Price increases that are now being snuck in by manufacturers because prices are going up so they think they can. IRL price increases rarely show up immediately. There is often a sort of Mexican standoff until one guy blinks and then the sellers either follow suit or lower prices. In an economy where prices are rising these price increases will sometimes come in on top of other price increases.
*Most likely these are a net negative in terms of greenhouse gasses, but that is a separate debate.
In addition to fuel costs making up different shares of different products, there is also elasticity. If I sell a price elastic good, the people buying it don’t care if the price goes up because of costs, or because I just felt like raising it. I will make take in less revenue with a price hike, which is nobody’s problem but my own.
Gas here in NW Pennsylvania has increased 0.22 in one week, an average of three cents per day. The outside signs are almost clicking up in price like at the pump when you are filling up. :mad:
To those who say I posted a weak or confusing argument , I agree. My point is that there are those who say (in a nasal voice) “the price of gas has kept pace with inflation”. Now, if that were true, the price of EVERYTHING ELSE would HAVE TO JUMP in-step with gas. Thank goodness this has not yet happened while we wactch prices rack up at the pump as stated by the posts above on $.22/wk increase!
Ergo, the price of gasoline has NOT kept pace with inflation…it IS DRIVING inflation! And, to Mr. Smiling Bandit, I say this: I’ve never heard of a company in business to lose profits. I can only WAG the impact to truckers is being distributed across all their customers, but it won’t be long before we see a spike in everything else - beyond food.
Hey, maybe once beer spikes, people will take this seriously. Either that, or condoms need a nice proce hike. That’s all people really care about, ya know. Sex, drugs, and rock ‘n’ roll. In Roman days, it was called “bread and circuses”.
Yeah, and with “reality TV” and crime going the way it is, it won’t be long before these two “circuses” merge to bring us a real, “Running Man” game show, if you recall the Schwartzenegger (sp?) movie… :dubious: It won’t be long!
That may not hold recently due to the large increases, but keep in mind that there were many times when gas prices went down. So, if you average those ups and downs over long periods, the price of gas did stay relatively stable wrt inflation adjusted dollars.
That is simply not true. There are other ways to offset that cost, and (as I said above) you are forgetting that, at times, oil and gas dropped in price.
