Gas Prices and Economics for Dummies

Next week we will be taking a long trip down to California and I am glad to see that gas prices should be under $2 almost the entire trip (you never know with small, small towns).  So, as we will save a great deal of money, I just want to sincerely thank the U.S. Congress for...um...well...let's see, they...er......  Oh yeah, they didn't do anything!  Incredible, I have no idea how the prices dropped without action by the oh-so-wise federal legislature!  It couldn't have been supply and demand because that is not what drove them up.  It was the price gouging that did it, which is why Congress tried to drop prices through hearings with "Big Oil executives."  Ah-hah!  That must be what did it.

Coincidentally, crude oil futures have also dropped below $50/barrel from a record-high $147/barrel, but that is a coincidence.  Wait, Democrats also blamed speculators.  Speculators have caused us problems time and time again.  It is speculators that drove the prices up and it is speculators that have caused the stock market to drop nearly 50%.  They are undervaluing stocks and causing problems for everyone.  I personally dream of a market without speculators--that would be heaven indeed.

I am glad that gas prices are down because now I don't have to hear such brainless, unintellectual dribble about the speculators causing the problem.  THEY ARE NOT THE PROBLEM!  That excuse makes it sound like the are colluding to drive the prices up, when, in reality, they are merely reacting to the underlying problem.  In the case of oil, people thought that because supply is on the rise and demand either falling or steady, oil would be more scarce and therefore more valuable.  Really, if you don't get that (cough, Harry, cough, cough, Reid, cough), you make me less optimistic about the future of the American education system.  It's called Economics 101.

There are two ways to force the price of gas (and oil) down and that is to decrease demand (which is what the down market and high gas prices have caused) or to increase supply (which is what Republicans have proposed doing).  Since, Republicans completely wasted years in Congress and did not try to lift the ban until they were the minority (cowardly idiots), the Democrat Party and its Environmental Movement Mistress will continue to block any increase in supply in the foreseeable future.  So, as alternative fuels will all fail miserably (though many believe that to continue living off of government support in perpetuity is a success) and no more oil will be drilled, as soon as the market starts to turn around, demand will out-pace supply and prices will shoot back up to $5.