And while we’re on the subject of gas prices, can we just drop that 9/10ths of cent thing at the end? Come on, you’re not fooling anybody.
Are you really trying to mess with tradition? It’s been like that for a hundred years or more.
Not only that but it’s increasingly less relevant than when gas was 29.9¢ per gallon. Unfortunately it’s kind of baked into the system.
When I worked for a credit card processor I was in the part that dealt with smaller retailers so any gas station would have been a small independent station with a gray credit card machine on the counter rather than a pay-at-the-pump tied to the POS system found at almost all stations.
We had three versions of software for the merchants:
- Retail – The plain-Jane version where you ring up the sale, punch the total into the credit card machine and hand it to the customer to complete the transaction.
- Restaurant – You can identify all your servers and enter the server ID as well as the amount. It will ask the customer if they want to add a tip. At the end of the day it can run a report of how much tip money should be distributed to which server.*
- Fuel – You can put in your various types of fuel and their prices. Putting in the fuel type and gallons sold it would calculate the total. When putting in the amount the .9 was mandatory.
*It could also withhold part of the tip money allegedly to cover the cost of running the sale, typically around 3%. I saw only one establishment that was using it, a country club in North Carolina and the percentage withheld was 25%. This is why I give a cash tip if at all possible.
$3.69 here - west of Chicago.
Username checks out.
Not just Republicans. That describes Americans in general. Most of all the low-information voters who aren’t much aligned to either party.
How will we know if MAGA peels off? What’s the polling baseline? On Feb 27th, the day prior to airstrikes, Trump’s trendline approval was 38.9% according to G Elliot Morris’ model (whose trendline is a little lower than Nate Silver’s). Today it is 38.8% - unchanged.
The war is unpopular. Morris: “With just 38% of Americans in favor, support for bombing Iran is lower than retrospective support for the war in Iraq was in 2014 .”
That said, MAGA is currently onboard. MSNOW:
MAGA’s support is at 90%. But Non-MAGA aligned Republicans --not a small group-- has only 54% support.
The US economy is much less reliant on foreign oil than it was in 1974 and 1979. Back then, crude oil prices quadrupled and doubled respectively (the 2nd was actually worse than the first, because oil prices started from a higher baseline). The share of consumer spending devoted to motor fuel was 1.8% last December; it was 3.3% in 1970, peaking at 5.2% in 1980. Cite (sub req - I can gift for 7 days if requested).
Caveats
Surveys differ. Another shows spending on motor fuel at 4% of the household budget. But that chart didn’t go back to the 1970s and that’s the comparison I wanted to make.
My WAG is that gas prices will have to go up 2.5 times to challenge the foundations of the MAGA base. We’re talking national average gas prices of $7.50. Last month the average was $2.90. This could happen. Or Trump could declare victory tomorrow. When a regime’s policy apparatus has collapsed and behavior is driven by the whims of a mad king, forecast becomes more challenging.
Brent crude is now $107.20, up $14.46 from the last quote, or +15.6%.
I’m surprised gas prices at the pump haven’t really taken off yet, and I rather suspect political pressure.
I suspect prices will blast off tomorrow once the markets open.
I don’t think there will be any change in the maga political landscape.
The spin is now broadcast that this is a small price to pay.
I am still not sure what it is we are “buying” and how much it will cost in the long run.
Regardless it seems like a very steep price to me.
Paul Krugman detailed some of the economics of the war. In sum, energy specialists are scared while macroeconomists are complacent.
Big lumbering oil tankers are vulnerable to missiles and cheap drones in the Straits of Hormuz and Trump’s headline-friendly proposals aren’t up to the task.
The US economy as a whole is much less reliant on oil than it was during the 1970s. For example, cars are twice as fuel efficient.
What does that mean on balance? World oil production declined about 5% after the 1973 middle east war and 15% after the Iranian revolution. Total oil currently passing through the Straits of Hormuz is… 20% of world output. Yowza.
But inflation expectations are anchored and central banks are as yet uncorrupted, so I don’t expect wage-price spirals. It’s very easy to imagine a doubling of gas prices though. Or higher.
The wild card is that IMHO Trump could declare victory within the next fortnight without substantial political blowback. Nobody knows why we’re at war with Iran after all, including the administration. Trump tends to pivot when faced with potential domestic political pressure, even mild stuff from the stock market. So we could get through this I say. But Trump has to declare victory and get out – the Iranian people aren’t going to rise up during a bombing campaign. Could Iran be bombed to the point where they can no longer launch drones against oil tankers? Hard to imagine, but I’m not a military expert.
Sub req, but the first few paragraphs are public:
I was reading that it’s not just about the oil that is made into gasoline to burn in our cars. And it’s not just about oil consumption in the USA.
It’s also about the oil that is used to produce feedstock for a lot of necessary materials, as well as oil going to other countries that produce important products.
One example would be energy going to Taiwan, who produce a lot of chips used in many applications. Stop that oil going to Taiwan, chip production goes down and this has a knock-on effect.
World production and trade is a very complicated, integrated affair.
Yes, the ripple effect is likely to have long-term impacts on global inflation. Transportation costs alone are likely to rise significantly.
Also agriculture globally is going to take a hit from inability to get sufficient fertilizer to maintain farming practices that depend on it.
The U.S. and Israel’s attacks on Iran, and Tehran’s retaliation across the Middle East, have disrupted supplies of fertilizer, and farmers worldwide are rushing to secure critical nutrients. Around a third of global fertilizer supply passes through the Strait of Hormuz, a nautical passage between the Persian Gulf and the Arabian Sea, which Iran has promised to shut to shipping. Prices of natural gas — a crucial element in fertilizer production — are soaring globally.
ING estimates that a quick war (which we can now rule out I think) would lead to oil price increases next fall of less than 10%. If Hormuz was closed for one month, then operated at 50% capacity the 2nd month and (if I’m interpreting this correctly) 75% capacity in the 3rd month, then oil prices in Q4 2026 would be a third higher than the baseline. Their worst case of a 3 month closure implies 50% higher prices.
Effects are sufficient to make a difference in the election, but not enough to fracture the MAGA base, given my view that they are a personality cult. If oil prices increased by 2.5X, then electorally significant numbers might come to their senses, at least temporarily. Trump pardoned Blagojevich, after all and it didn’t phase his supporters.
Trump is officially worried enough about the price at the pump and the impacts that’s going to have on voters in several months that he’s opening the taps on the US strategic oil reserves.
I got that far and genuinely assumed the next few words were going to be “his own Trump gas card” or “Trump brand gas” or something branded with his name and related to gas.
That’s a cool reason to have to do that: because we chose to bomb Iran.
From the article:
Are they really coming to an end?
Play stupid games, win stupid prizes.
Well, sort of. The intention is coming to an end, and the actual reality of killing Americans has begun.