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Originally Posted by Oregon Elephant
That is done through the balance of supply and demand, price speculation is used to lie about the demand and make it appear that the demand is different than what it really is (in this case, higher) in order to adjust the price away from the free market price. Ergo, we are adjusted away from the free market price and so not in a free market.
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Price speculation is used in all sectors of the economy to SPUR demand in addition to raise prices, it is an element of the free market. It doesn't just measure demand, it also analyzes supply.
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How does cooking your own food and having no debt reduce your need for gasoline?
I do all of those too (for the most part, I still have a student loan, but that's almost gone, be debt free by this summer). There is still a baseline of fuel that you need to use to get to and from work each day, to and from the grocery store. You can only save so much before you hit a wall.
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Right, you need gasoline, you don't need credit cards, a big screen tv, or a fancy car, and A LOT of people making $35k a year have all of those things. Do the math on this:
Gas is $2 a gallon, you have 16 gallons in your sedan's tank = $32
Gas is $3 a gallon, you have 16 gallons in your sedan's tank = $48
Gas is $4 a gallon, you have 16 gallons in your sedan's tank = $64
Assuming you fill up once a week, the monthly price hike from $2 to $4 a gallon is $128. If you can't come up with $128 a month, you're doing something wrong. Higher gas prices irritate me just like the next guy, I like paying low prices, but it's something you need and certainly you can cut $128 from your budget to apply to gas. If you can't afford $128, it's time to get a second job or find a better first one.
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Actually, the people most hurt are those that make minimum wage, that can't afford that 35k car and are driving in a $500 1988 toyota (because that's all they can afford).
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The people making minimum wage also have the hourly flexibility to take on a second job, and can take public transit or walk. I lived well below the poverty line in college (I pretty much lived on rice and ramen), I managed to get to work and pay my bills....while going to five classes a semester, what's stopping other people? People must take responsibility for their actions and FIND A WAY TO SURVIVE, it's not hard if you play it smart. Made bad choices? ACCEPT THE CONSEQUENCES and MOVE ON.
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The nearest station to me (that gets it's gas not from US or Britian) is 13 miles from where I live, and not on the way to work.
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And you choose to live where you live, there are alternatives, you simply didn't choose to exploit them.
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Yes it is, in a free market, too bad this isn't. Gas consumption drops in fall and winter (with a spike at thanksgiving and christmas), so by the free market, the price should also drop.
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That was true before global demand spiked as a result of Chinese, Indian, and South Korean modernization, now when America slows its consumption, those countries pick up the slack. You can't blame companies for selling their products, it's sort of their job.
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This year, the prices dropped during summer (when consumption was high), took off in fall (when consuption was low), dropped again in the time between TG and Christmas (when it should have shot up momentarily), than took off again through winter (when it should be at it's lowest of the year). That shows very clearly that the price of gas is not following consumption in the least and is not being dictated by the free market.
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You don't live in an insular economy anymore, you have to consider GLOBAL demand and GLOBAL pricing. Life's tough, but you've got to learn to survive. Americans have become fat and complacent and we've been overtaken in manufacturing and raw material exports. Our workers are overpaid because we've all got this idea in our heads that EVERYBODY should be rich, and that simply isn't possible. You're trying to defend a system that is indefensible using economic analysis that hasn't been in use since that idiot Stiglitz won the Nobel Prize.