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View Diary: Another war that we are losing (27 comments)

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  •  The price of gasoline is based on politics (4+ / 0-)
    Recommended by:
    Sparhawk, cynndara, FG, Lujane

    not economics. OPEC countries provide gasoline, within their borders, at well below world market prices. The US prices gasoline close to the actual market price, plus modest federal, state and local taxes. The EU prices gasoline at 2-3X the actual market price to inhibit gasoline use and to raise tax revenues.

    "let's talk about that"

    by VClib on Sat Feb 09, 2013 at 08:22:34 AM PST

    [ Parent ]

    •  Indeed. (3+ / 0-)
      Recommended by:
      FG, Azazello, Lujane

      While I have read the vast economic expansion of the post WWII years attributed directly to depression of gasoline prices to American buyers due to force majeure.  As long as the Americans had the biggest, baddest, and possibly the only effective potential invasion force in the world, nobody really wanted to fight with them over what constituted a "fair price" for their favorite substance.

      •  It was a 1945 deal between FDR and ibn Saud. (3+ / 0-)
        Recommended by:
        Lujane, gjohnsit, hooper

        "You keep the oil flowing our way, we'll be make sure the House of Saud is not threatened."


        The free market is not the solution, the free market is the problem.

        by Azazello on Sat Feb 09, 2013 at 03:00:58 PM PST

        [ Parent ]

      •  cynndara - if there was no OPEC the market (1+ / 0-)
        Recommended by:

        price of crude oil, and gasoline, would be even lower.

        "let's talk about that"

        by VClib on Sat Feb 09, 2013 at 03:24:44 PM PST

        [ Parent ]

        •  Quite so. (3+ / 0-)
          Recommended by:
          VClib, Lujane, gjohnsit

          The cartel was formed to help oppose the US pricing power, and it succeeded in stemming the hemorrhage.  You have to remember that oil is a finite resource.  It's not to the advantage of those who have finite stores to sell, to sell too much too quickly.  However if they're locked into destructive competition, it quickly becomes a race to the bottom.  OPEC does what it needs to do for its members, mostly at least.  And when America lost the ability to dictate its terms to OPEC (1972, I believe -- I was in jr high at the time), the prices went up significantly.

      •  Yes. They're not "natural" or "market" price (0+ / 0-)

        levels when keep them down with aircraft carrier groups.

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