Tuesday, June 20, 2006

A Post to Jason the Anonymous

OK, this has gotten a bit out of the lines of a response to a response, so I'm throwing it up-front. I'd like to thank Jason for participating and reading, and speaking his mind. I think he's wrong, but I respect him nevertheless for that. His comments to David's "Gas & Butter" post just below are reproduced so I can respond to them in context. In most of the quotes, he's quoted me, so there's a bit of quote-madness going on here. Bear with me, folks.
There are products that may seem as though they're a choice. You can purchase them or not and the price, when loooots of people choose the same way, will
adjust accordingly. That's all fine and dandy-like. But what about products that *seem* to be a choice, that you can *theoretically* choose not to purchase, but really you can't? Really you have no choice? That's the case with gasoline and, well, most of America.

Only a few cities have public transport that can actually get people where they need to go and could hold the amount of people who would use the system if they chose to use it (due to gas prices rising too high). Some of our largest cities (Detroit, for obvious reasons, Houston, Los Angeles, Dallas...) have very little public transport options. And forget the suburbs and swaths of rural areas. Those people really are forced to buy gasoline at any price. if they don't, they can't leave their homes!

You can talk all you want about alternatives being trotted out, but it wouldn't be soon enough for those who are really struggling and really can't pay their bills. We're talking months before the pressure builds, before new model non-gas cars can be built and sold, and years before public transportation can be built. And gas is just one example of an ostensibly "chosen" product that a lot of people are actually forced to buy.

People being forced to buy gas at any price? Oh please. You really have an active imagination, or maybe you've never lived in suburbia (a nightmare, don't get me wrong, I'm with you on that one!). Where I live, I'm on the far end from a train station - about 6 kilometers. But guess what? I've got a bike. If all the gas in the world disappears, I can ride there or hoof it without trouble in well under half an hour (just minute by bike, actually). If things were terribly bad, we'd still have the freedom to move someplace else.

But realistically, the gas ISN'T going to disappear. Prices may increase, but there's no evil profit to be made in sitting on your reserve while your customers begin to hate you (especially dangerous, since in a democratic country, your customers can then essentially destroy or dismantle your business via government). And what do people do? They begin to make choices to compensate. Instead of buying a 8 gallon-per-mile SUV, maybe Ms. Soccer Mom/Dad will decide on a Prius - more like 70 gallons per mile. Joking aside, my Camry gets about 25-30 miles per gallon, and the Prius (or most any other hybrid), about twice to triple that. Guess what I'd buy in a crunch?

But that's outrageous, you say! People would have to spend fortunes on new efficient vehicles! Well yes! Just like they spent on their OLD, inefficient vehicles - which, I might add, can be resold. And motorcycles and other such vehicles have been sold for decades boasting amazing MPG ratings. If that's what you're looking for, it's just a few grand away. And you must admit, the sight of Molly Soccer Mom driving her kid to practice on a Harley just does something for the soul, brings a tear to your eye, you know?

Still no go for you? OK, guess what? Gas prices go up, alternatives already exist. Hell, if you have a diesel engine in your car, you can pretty much just toss in anything combustible (not speaking about efficiency or long-term damage, just about the robustness of the basic design). Ever heard of ethanol? Biodiesel? Heck, have you even heard about the successful extraction of oil from algae? We're talking a massively efficient process that can produce oil for your favorite purpose (be it what it may) anywhere you can harbor a load of algae. How much do people spend keeping them OUT of their pools? Point is, they'll grow easily, and projects like this are bearing fruit. I'm an optimist, and I think within a few decades the oil "crisis" will be right back there with "global cooling" in the 80s.

Let's round it up, shall we?
1. Adjust consumption down
2. Reallocate spending
3. More efficient vehicles
4. Alternative fuels
5. Public transportation
6. Change job
7. Relocate (move home)

Guess what? As needs arise, solutions - including public transportation - comes right along, IF the government doesn't stand in the way. I'm in Russia, and here very few people have cars (thank god!). How do we get around? The public transportation is pretty atrocious - you can wait a half hour just for your bus or trolley, and then another half hour to your destination - and not all destinations are even covered. How do people here get around? They walk some, yes, but there's another institution that makes me proud.

When the USSR broke up, the resulting financial crises set the clock back a bit. The already bad infrastructure became worse, or sometimes temporarily disappeared (now things are basically OK, for the record). When the artificial barriers to entrepreneurship disappeared, guess what was one of the first things to pop up? Marshrutki: fixed-rout taxis that will carry you to any of the stops on their itinerary for the flat rate of 8 rubles (about 25 cents, a price not only necessary, but considered insignificant by Russians and myself).

I love 'em. They're cheap, efficient, and mean that the price of gas is split between dozens of people. A single liter might see 100 people come and go. The only problem is probably that the government here has fixed the maximum price for the rides - leading, of course, to undersupply and chronic shortage of the marshrutki at peak hours. But nevertheless, they're wonderful, and there's no reason that similar services wouldn't pop up in urban centers around the country. You think it takes years to arrange marshrutki and car-pools? Only if the government stands in the way, Jason.
No it isn't. Oil and gas are necessities for the entire nation. If you don't use it yourself, then the products you buy are delievered by using it. That is too much power to go unchecked. And don't go talking about market forces. It's not a tenth as effective libertarians make it out to be.

Well I hate to break it to you, but oil isn't necessary. You're making assumptions that you're not putting out on the table. Let me suggest that civilization doesn't stop when the oil does. Change, yes. Hurt? Possibly. But stop? Hardly. Humans survived for thousands of years without the stuff, we'll do fine from this point on. And at this point, there's just too much flexibility to make that even a remote possibility (see above). Oil (and it's alternatives) isn't disappearing before the sun that's used to make it does.

You're absolutely right that there's a lot of gasoline built into everything in the economy. All that means is that if gas prices rise, the price of everything rises a bit with it over the long term. Do you really care if you pay .99 cents for your McBurger or $1.29? And like I said, optimizing routines that people would take after increases would mitigate the effects.

You don't think they own their gasoline? Why not make them give it away? A price ceiling of 0 - think of the wonderful productivity benefits, right? Free gas! Right.
"The next complaint of "price gouging" I hear when ... I swear I'm going to cry."
David is the only one who mentioned it. Of course your keyword is "legally", as if a large business every let something like the law get in the way. Corporations scatters legal responsiblity so much lawsuits are virtually ineffective. All you can really do is fine them and if you think fines really punish corporations I have a ski resort in Flordia to sell you.

You're talking about price gouging, like to think it or not. If you think someone else's idea of a fair selling price is bad, you're basically accusing them of abusing the want of said commodity.

You seem to think corporations are bound on death and destruction. Good, then you can agree that the government, as the biggest corporation in a country, moreover with the power to tax and use force, is in a corporate league of its own. You're scared of McDonald's? McDonald's doesn't try to commit genocide. They may do stupid things, but putting trans-fats in their fries or heating their coffee beyond the "reasonable" limit is hardly the same as rounding people up in concentration camps.

I'm most worried about corporate deviance as it regards negative externalities. They must be born by their maker, and I'm not sure as to what the best way to do it is. Some of us here are minarchists. Others are anarchists. But I think all of us agree it's not OK to dump toxic waste on your neighbors property. Those problems tend to arise most often, though, in public commons - that is, the unowned land. If someone dumped waste on my land, I'd have a spectacular lawsuit. Toss it in the public pond, it's a bit harder to deal with.

As for the difficulty of placing lawsuits, ask yourself why lawyers are so dear. Let me suggest that its because the government "ensures their quality" by giving monopoly rights to practice law. The problems of violating ancient legal principles of common law is another story, but might also be addressed as a consequence of the proliferation of legislation versus inherited common law tradition.
"And by the way, YES you can safely store gasoline in bulk."
Two words: fire hazard. You may not know this but gasoline burns pretty well. Keeping more over a few gallons not only puts your place at risk but your neighbor's too. Should other people have to risk their lives so you can save a few bucks? If storing large enough quantities of gas to keep a suv happy was really possible, Home Depot would have a sale on them every other week.

Two words: storage tank. I'm not advocating soaking your laundry in gasoline to take it home, or filling empty vodka bottles with gas before filling the next with a rag. Do you think gasoline is stored at gas stations in magical trans-dimensional tanks? It's a fire hazard there too, but it doesn't stop them. Nor does it stop the tankers from brining it. Keeping more than a few gallons is a risk to self and community? Lock me up, I've loaded my share of multi-gallon tanks and parked it in my very own garage. If there was a demand, there'd be a supply. Don't you remember filling lawnmowers with gasoline? Everyone used to fill up their tanks with those at the station, toss it in the trunk, and drive home. Not lots of gas, but the principle is scalable with almost no trouble.

And whose interested in storing enough gas to run an SUV? Can you say "trade-in"? As of today, I know of no law forcing people to own and operate cars that are expensive to drive. If they want to economize, they'll do it.
"butter prices CAN change daily"
Never saw it happen. Stores change prices by the week. Even then not every price is changed.

This is too silly to even argue about. I don't care about butter prices; talk to David.
"And how much relative to gasoline?"
Don't go saying "relative", we're talking about actual dollars. $5 worth of butter lasts longer for $5 of gas for 90% of the population. Trying to put things in "relative" prices is a hat trick unless you're talking about inflation. But you're not.

I'm talking in actual dollars too, Jason. OK, let's complete the quote: "And how much [am I spending on butter] relative to gasoline? I'm projecting using about 60 dollars to 120 dollars a week on butter - maybe half that on gasoline."

I'm trying to trick people by showing how I'm going to use more butter in the US than gasoline on a cost-basis? I think you misunderstand. This 'hat trick" is a demonstration of the fact that I can get around by using under 6 gallons of gas a week - that's about what, 20 dollars? With my ride, that takes me a whopping 100-150 miles. I don't need to go farther in a week, but I do need plenty of butter.

I'm not saying that everyone will drive that little, or use that much butter. The point is that gasoline is cheap.

"but relatively they fell from their highs of decades ago"
So how about sallaries? You know, what real people use to buy gas. Have they risen like gas prices?

If you want to toss a fact out there, I'm all up for it. But impatient as I am, I'll toss out something of my own:

Mean Household Income Received by Each Fifth and Top 5 Percent
All Races: 1967 to 2003
(Households as of March of the following year. Income in current
and 2003 CPI-U-RS adjusted dollars28/)
YearLowest fifthSecond fifthThird fifthFourth fifthHighest fifthTop 5%
2003$9,996$25,678$43,588$68,994 $147,078$253,239
19989,22323,28838,96760,266 127,529222,283
19937,41218,65631,27248,599 101,253173,784
19886,50416,31727,29141,25478,759 124,215
19835,23912,79621,10531,667 57,30383,943
19783,8079,11215,01021,980 38,79157,625
19732,5686,36610,40214,954 26,52140,417

Source: http://www.census.gov/hhes/income/histinc/h03ar.html - 6/21/06

I REALLY hope the table comes out - but even if it doesn't, let me summarize. This table draws us from the 1973 oil crisis to 2003, the last year given. All dollars are 2003 dollars, adjusted for inflation. The chart is by households of all race, measured in quintiles plus the top five percent by income.

The results? Incomes increased. As I said, relative to the incomes, the oil prices decreased - meaning that the price of oil rose more slowly than the income, resulting in more ability to buy oil. Ergo SUV-madness.
"Sales on gas?"
I've been in Illinois for 7 years and never heard of that. I also listen to 780AM with their gas prices. If there was a sale every week on gas, I would have heard of it by now.

Not my problem you don't know of it. You want to see, go to the gas stations at the corner of Skokie Blvd. and Lake Cook in Deerfield, Illinois. I'm pretty sure it's Wednesday sales, but it may be Thursday - I've been gone too long to remember (or care very much).
"butter is MUCH more important to my life"
Not everyone is like you. (Thank goodness!) If everyone was like you, ideas like communism with its faceless conformity would work a lot better. Different people have different needs and requirements. It's something I haven't seen acknowledged very much in libertarianism. We're not drones. By what I've seen here people, I mean "employees", are expected to work excessively at our jobs to keep them then work more to find a new job just in case our company decides to move oh and for good measure work to learn a new trade if our industry collaspes. The biggest reward goes to the one who gives up the most of their private lives for a company who doesn't value loyality. We're still treated like cogs, no matter how much brass plating you put on us.

I'M a commie? You're the one saying that the "compelling need" of the American people justifies the outright theft of property rights regarding oil. Why stop there? There's a compelling reason behind lots of theft, but I don't think that really goes very far in justifying it - even IF there really is a compelling reason in the first place. I'm all for diversity of needs and requirements - I'm just interested in making people pay for them out of their own pocket, rather then someone else's.

I don't want or expect anyone to be just like me - my point is that they could all change consumption patterns. Take my mother - she drives to her sister's house every day, practically. I think it's an atrocious waste of gas, but it's about two gallons a day, not including side trips. It's worth the 6 bucks a day to do it. If prices rise, maybe she'll reconsider. That's about all it takes.

I think Jason is a bit of a pessimist. I'm an optimist. I think people are not monkeys with guns waiting to tear each other apart. His idea of individualism seems to be socialism, and hey, if that's your bag, run with it. To Sweden, maybe?


Tim said...

A pox on the format-demons that inhabit this page! They'll rue the day they laid claw here if ever I get a WYSIWYG editor!

Apologies for the rediculous word-wrapping and condensed data table.

David said...

I'm going to fix some of the formatting, Tim. I just can't stand it.

David said...

Ok fixed...mostly; I have no idea why that huge gap is there between the table and text

Tim said...

David, you're a saint! Thanks so much.

Anonymous said...

I would appreciate it if you do not put words in my mouth. You do so several times in your response. You also seem to take my arguements and stretch them past any point of believability.

"Well I hate to break it to you, but oil isn't necessary. ... Humans survived for thousands of years without the stuff"
That was before the Industrial Revolution when the total world population wasn't even as big as today's US population. Include a much longer lifespan (getting close to double it was before), reliance on medicine, ability to grow food, keep our water drinkable, need for synthetics, etc and you'll realize that if the oil supply was suddenly and drastically reduced millions of people would die. Before you think otherwise, remember people died because of high gas prices last year after Katrina. People were unable to go to doctors, buy medicine, keep medicine in stock, and so on. Every year in Chicago there are people who freeze to death because they can't afford the heat.

"You don't think they own their gasoline? Why not make them give it away? A price ceiling of 0 - think of the wonderful productivity benefits, right? Free gas! Right."
See, there you go putting words in my mouth. I did not say they didn't own it. I said they shouldn't be able to set prices without some kind of real oversite. That's not the same as not owning. You may own something, but that doesn't mean you can do with it as you wish. I own a car, but I can't drive 100mph down a residential road with impunity. There is such a thing as responsibility to your fellow man.

"If you think someone else's idea of a fair selling price is bad, you're basically accusing them of abusing the want of said commodity."
I disagree. There is overcharging and there is abusing just as there is a difference between assult and assult with attempt to kill. It's a matter of degrees. To say one is happening does not mean the other is.

"in public commons - that is, the unowned land"
No it isn't. Public land belongs to the people of that city/state. If someone dumps toxic waste in a public park, the city files a suit. David spent a lot of time trying to convince me that corporations are "people". So if a government is a corporation, then it is also a "person" and thus can file a lawsuit. I will point out though that the purpose of a government is to protect the people while a corporation's purpose is to protect their profit margin. So are you saying that people are just a comodity to be traded and expended as necessary?

"Two words: storage tank."
Sorry but storage tanks need licenses, have to be up to saftey regulations, zoning laws, pay extra insurance, and be subject to a host of other complications. At gas stations the tanks are stored underground to minimize the risk to others. I guess if you're willing to put up with the expense of doing the same you shouldn't be stopped. But I suspect the cost of keeping and maintaining a storage tank greatly exceeds anything you'd save. Would you accept responsibilty for it or would you say it's someone else's problem if the local pond became deadly to the wildlife due to gas contamination?

"Not lots of gas, but the principle is scalable with almost no trouble."
No it isn't. Bigger tanks means a bigger chance for a leak and more gas leaking out if it has one. When doubling a recipe you can't always just double the amount of ingredients. Often enough you have to adjust to the extra size, often going through the extra difficulty of two seperate batches. You can't simply cook it for twice as long or at twice the heat. A two gallon gas tank is much easier to keep safe than a 20 gallon. It's not an issue of scaleability as practicality.

"This is too silly to even argue about."
Then why did you bring it up?

"I'm projecting using about 60 dollars to 120 dollars a week on butter"
PLEASE tell me just what the heck do you do with between 13 and 27 pounds of butter a week! (Peapod sells better at $4.49 a pound.) I would think no one outside a business like a bakery or restaurant uses that much butter that quickly. I don't even use one pound of butter a MONTH!

"Mean Household Income Received by Each Fifth and Top 5 Percent"
Let's take a closer look at that. For the bottom 4/5ths income increased by about a factor of 4. For the 5/5th it rose by about a factor of 5. For the top 5% it rose by a factor of over 6! So the rich are getting richer which skews the rest of the columns since each 5th now covers a wider range of salleries. Also I noticed that for the bottom fifth, the income rose by at least $1000 every time except between 98 and 03 and guess what, the last time the minimum wage was increased was 97. Funny isn't it? Prices increase but not the wages most people use to buy things. Not to mention your chart doesn't say how much each 5th represents.

Gas sales
I'm in Wheaton, to drive out to Skokie or Deerfield would more than counter any benefit I would gain by these gas sales. 780 reports gas prices from all over Chicagoland and it was not mentioned. It's either the best kept secret or there's another catch keeping people from using those prices.

"I'M a commie? You're the one saying that the "compelling need" of the American people justifies the outright theft of property rights regarding oil."
BULLSHIT! I never said that! Demanding oversite of those in power is NOT the same as theft.

I never called you a commie either. I said some parts of libertarism is LIKE communism. And from what I read of your response, I'm more convinced of it than ever. In both cases we have a system that we cannot question. In communism you can't question why those on top get the special priviliges. In libertarianism you can't question why a CEO gets a multimillion retirement package while the employee pension fund gets gutted. And if someone suggests those in power be more open and not keep so many secrets, they get put down and lied about just like what you did to me. Replace phrases like "the State" with "the Economy" or "the Company" in some of the properties of communism and it sounds a lot like what I've seen here.

"Why stop there?"
Ever hear of being reasonable? Suggesting a minor change does not mean making a major change. Pulling away from one extreme is not the same as pulling it to the oppositte extreme. I want a more "middle of the road" solution where corporations of all sorts have to justify what they do and why they do it. I want names of decision makers and what they are responsible for made public. That is NOT socialism no matter what you say. And you wonder why more people don't respond to this board.

"I think people are not monkeys with guns waiting to tear each other apart."
I think you do. From what you talk about it seems that libertarism is a capitalist version of the law of the jungle where the winner is the most ruthless with all the compassion and sentiment as a nature show on Discovery. In the wild the young, old, and sick are the preferred targets of predators. In your free market, the smaller companies are fair game for the larger ones and anything goes. To say they should follow the rules and play far is "government controled socialism".


Tim said...

Jason, I'll be short. I wrote up a blow-by-blow, but that doesn't seem to be getting the point across, like David says.

I want justice. I think people are basically good. I think corporations should be responsible. I don't think the government is the best way to make them responsible. I think the government can be at least as dangerous as any other corporation - then some. I think law and order doesn't have to rely on the unlimited unilateral right to force and coercion. I think people should associate voluntarily.

But mostly, I want to say that I think that most statist interventions that are intended to produce good, helpful effects, instead hurting the people they're targeting. I think the minimum wage is a great example. I think price controls on rent is another.

I hope you stay. I hope you keep on commenting, it's good. But please try to understand where we're coming from. I get that you're afraid of corporations - I feel all that but moreso for the government. I don't think corporations are wonderful solutions, but I think they're better solutions for more people, and more often than a comparable government effort.