For fuck’s sake, can the news stop going on and on [and on] about rising gas prices as if it’s funny and new news to report?

I don’t smell gas; I smell crap.

You’ve seen the reports. Anchor A turns to Anchor B and says, “Well, you slept last night – you know what that means? [laughs]” ‘Yep! Gas has gone up again! [giggle]’ “That’s right, Anchor B! It’s went up [1-6 cents] overnight!”

Dude. Shut the fuck up already. It’s borderline news. It’s certainly old news. It’s not funny. It’s fucking with peoples lives and I for one would like to see a colony of fire ants bite your ass for being glib about it.

I guess the real news story should be “How did we get here?” and I’m of two minds about it.

On one hand we, in the US, have had low gas prices when compared to other parts of the world. Especially when compared to inflation and other economic issues, like house prices as an example. I can recall a time when gas was selling for $2/gallon in the 1970’s. Are you going to tell me that $2 in 1976 is worth the same as $2 in 2006? You know it’s not. So to that end, I believe that we’ve been lucky so far.

Add to this the hurricane season last year: the news from that was “whoa, we’ve got a shortage” which helped to temper our expectations. Fine, but overall that should only amount to a a small part of world wide oil production, but we hung with it anyway.

Then there’s this supply and demand bullshit that the media is passing around. I’m sorry, but if you get enough “experts” on the news predicting $3 to $4 a gallon gas prices, it will happen. It’s a self-fulfilling prophecy, in it’s own right… and it’s what’s happening here. Crude oil prices trade like the stock market does. People that trade in the Futures market read the news like everyone else… if they hear “shortage” they start to buy. People buying a stock/future drives up prices. Which causes more news stories and speculation. For stocks, if it was based on fact, it would be considered insider information, but in this case it’s strictly rumor and speculation. That’s been what’s helping to drive up the price of crude oil: Fear, Uncertainty, and Doubt. In software, we call it FUD, especially when it’s used to drive speculation.

So you’ve got FUD raising the price of crude, fine. The public starts to hear the same FUD which makes them expect to see raising gas prices. Gas companies say “whoa, what’s this smell… is that Fear or possible profit in the air?” and they pounce. So do gas station owners. We’re already pre-conditioned to the rising price, having heard about it every fuckin’ day for a month, so we say “Ah, there it goes” when they monkey around with the prices in the dark of night.

Six months after the first “shortage” and price increases every single gasoline company reports record profits.

Not that they made money, which is good, but they increased their profits during the same span of time, from the year before. And there’s the problem right there… if there was a genuine “cost of living” increase going on with gas, there wouldn’t be profits. If there was a shortage of gas, we’d see a shortage at the pumps. If the hurricanes did so much damage to production, why was there still such a huge increase of profit? If crude oil was in short supply, why has its price dropped recently while gas prices continue to rise? Last summer we all said “oh, snap, it’s going to cost them more – the rise in gas price is expected” but with the annual reports of the oil companies we find that they made more money than the year before. Then ever before. Something doesn’t add up.

But wait, there’s more!

The latest in this whole debacle is the outcry of the people, that the government should do something about this. And therein lies the problem with capitalism: when should government regulate business? When does “free enterprise” lose out to “savings” and the will of the people? I don’t know.

What if you owned stock in an oil company? You just made a shit load of cash from last years business. You got a fist full of dividends. Anyone can buy stock in publicly traded companies, so it’s not like it’s a selective club. You should have a right to expect a profit from that kind of investment; I know I expect profits from all of the companies I’ve invested in. Is it right that now, after making “too much money,” that the government gets involved?

And what about the SUV boom? Isn’t it ultimately the problem of the US citizen for demanding so much more gas these days? We moved away from the gas guzzler after the gas crisis in the 70’s. We ran pretty well for a while with cars that got 25-30 MPG… at some point the hybrid entered our consciousness as an alternative, as has mass transit in major cities. And then, in the early ’00, we started making monster mogambo boats-on-wheels with 30 gallon tanks and 7 MPG. Shouldn’t we be to blame for some of that?

Car makers? Who the hell knows… they made all of those SUV’s, but that’s because we said we’d buy them. Hybrids? They’re making those because we said we’d buy them too.

Alternative fuels? Who’s fault is that? Government? Sorta, I guess, but have you seen the tax breaks on buying a hybrid car? I think they’ve done their part in that area – maybe they can do more to find another non-oil solution. I’ve noticed Bush spewing exactly that lately… a little late for that kind of lip service, so even that’s bunk. And where the hell has Congress been, if this was a real priority for so many years? Oil makers? Hell yeah, they don’t wanna see gas usage decline, but what if they started to fund the alternatives? Could still make money, yeah, so it’s a possibility. Either way, it’s human nature to just keep doing what you’ve been doing if it works… they need some blame for not trying hard enough. Consumers? No other options yet, so they get off the hook.

Like I said, I smell crap. A whole lot of it. I think this is a correction for years of great prices. I think the analysts that have been screaming about $8/gallon should be made to shut up or at least refuted with the same vigor. I think the oil companies are shaking down the public but I also don’t know that it’s right for government to stop it. I think that we’re partly to blame for driving Hummers and V12 cars and the like. I also think that we’ll be treated to six months of politicians stomping around with the media following tow about “how to fix the problem” which should be amusing to watch; I figure someone will blame Grand Theft Auto since their cars use gas in video game land. I think there isn’t a solution for this, but time, which will some day drop prices down to $2.50-ish; I don’t think we’ll ever see prices below $2 ever again – once the genie is let out of the bottle it’s really hard to get it back in.

I think I think too much.