gimme-five | The blog of a busy guy.

TAG | driving



High Gas Prices and Speculation

I’m writing this article for the primary purpose of getting my thoughts onto a page.  I always hear all of this talk about how the only reason that oil prices are so high is because of speculation.  But that argument does not sit well with me because it ignores the underlying reason for speculation.  The argument runs that oil/gas is not really as expensive as it is, because the prices are only high because of speculators screwing around in the market.

There is some truth to the speculation argument.  Sure, speculators are buying oil, and the more demand to buy a commodity, the higher the price goes.  But, this begs the question: why are they buying oil?

Speculators in this case are people that predict the price of oil will be higher in the future than it is now, so they, in the simplest case, buy oil now so they can sell it later when it is more valuable.  If the price of oil goes up, it is because lots of people believe the price will go up in the future.  That begs the question: why do they think oil will go up in the future?

And then we’re back to square one: why do commodity prices rise?  If the only answer to that question is that prices rise because people think speculators will drive them up, then aren’t we just in an infinite cycle of inflation?  Obviously, the answer to that question has to incorporate something other than whether speculators plan on buying the commodity or not.  So I’ll give the classic, broad, economics answer: prices rise when the commodity becomes scarcer.

Scarcer can mean less supply, more demand, or a combination of both.  And I don’t think there is a clearer example of scarcity today than oil.  The world supply of oil is finite.  Sure, we find new sources of oil every now and then, and we develop new technologies to extract oil from places we couldn’t get it from before, but no matter what, we have to deal with a finite supply on planet earth.  Thus, every day, the supply of oil shrinks, and that contributes to a decrease in supply (along with occasional shocks from OPEC).  Additionally, world demand for oil is ever-increasing.  And not just in America.  When the Tata Nano, that tiny $2000 car from India is released, and it puts hundreds of millions of new drivers in and around Asia on the road, gas prices will skyrocket [this is undoubtedly on the speculators’ minds].

So the high gas prices you’re paying may be technically due to “speculation.”  But there must be reasons for speculation.  I believe the primary reason is anticipated increased demand and anticipated decreased supply of oil.

, , , , , , , , , , ,



Awesome Fuel Economy

If you want to get good fuel economy, sit ten feet behind a tractor trailer.  You barely have to touch the gas.  I just filled up my Toyota Camry and averaged 36 miles per gallon, after driving in tons of wind, and 1/3 of that tank city driving.  I average 36, but if you net out the city stuff and the wind, and the fact that the drive had a net elevation climb of a few thousand feet, I was probably in the mid 40s.  All hail gigantic trucks that get 2 miles per gallon that allow commoners like me to draft off of them.

P.S. I swear it’s safe.  I mean, think about how long it takes a truck to brake.  Even if you’re close to the truck, unless you fall asleep at the wheel you won’t crash into it when it starts to slow down.

, , , ,

In Virginia, there is some debate as to whether or not people convicted of DUI three times should be issued bright yellow license plates when they regain the ability to drive. Initially, when I heard this, I thought: “why not?” It could warn others around the drunk driver, and it’s not like three-time DUI convicts have much room to protest.

However, after further consideration, I’ve concluded the yellow license plates are a bad idea. For one, if someone is convicted of driving drunk three times, they should permanently lose their driver’s license. Sure, that sounds inconvenient, heavy handed, or what have you. But come on, three convictions is A LOT. If someone gets three drunk driving convictions, it does not mean they simply drove drunk three times. I’d be willing to bet that most people who drive drunk do not get caught. So if someone is convicted for DUI three ties, it essentially means that driving drunk is a regular thing for them. It also means they really don’t care about the consequences of getting behind the wheel drunk. Someone like that does not deserve the privilege of a driver’s license. They can learn how to use public transportation, or a bike, or find a friend who can drive them.

Secondly, the yellow license plates will only incite violence and ridicule. Although someone who drives drunk may be totally irresponsible behind the wheel and not deserve to have a driver’s license, they may be treated inhumanely by others if they are seen getting out of a car with a yellow license plate on it late at night in a scary part of a city. There is always a chance that some vigilante will decide to key the former drunk driver’s car, or worse – physical violence is a strong possibility. Although someone who drives drunk frequently does not deserve sympathy, they should still be treated like a normal human being, and I fear that putting a target on their car will make this unlikely.

In sum, if Virginia wants to do something about three time convicted drunk drivers, it should: take away their licenses forever. Those who have three DUIs, in my opinion, do not deserve a driver’s license. But don’t tempt them to get in the car and meet someone with a real hatred for drunk drivers who decides to “rid the world of evil” by beating up a former drunk driver who has a yellow license plate on his car. It’s more trouble than the “warning” and “shame” of making a former drunk driver drive with a yellow license plate is worth.

, ,


Theme Design by