Monday, September 15, 2008

It's our fault

How can CNN ignore price gouging as a source of price spikes! It's almost as if they're willfully closing their eyes. Instead, it's us nutty consumers who are to blame.

12 comments:

Anonymous said...

If a grocery store or lumber yard raises prices because of a natural disaster, it is called price gouging.

jparenti said...

Umm... it IS our fault. Irrational gas consumers and irrational investors cause this to happen. Gouging is not the primary problem, although it does drive up the prices in the occasional odd station.
We as consumers will never learn. As the CNN story says, you can't trust your neighbor... so you fill up, too.

Anonymous said...

"you can't trust your neighbor... so you fill up, too."

THAT's the problem. I saw the same thing happen this time that saw during Katrina. "Oh my God, we might run out of gas, quick EVERYONE go get gas right now! No S*** if everyone goes to get gas at the same time, we'll run out of gas. That's type of retarded mentality is what caused the problem in the first place. You can only price gouge if people are willing to pay for it. Seeing everyone freak out at the same time just encourages vendors to raise prices. They're not gouging, they're responding to a HUGE increase in market demand. It's the market correcting an imbalance. I'm not saying it's right to charge $1.50 more a gallon during times of emergency but imposing an executive price cap will only ensure supply runs out sooner.

Anonymous said...

I disagree it's our fault. There was no reason the gas should have spiked upward toward $5.00 on Friday. It is after the gas stations began this, that people ran out to find a gas station that still had a reasonable gas price which quickly were few. It's the Gouging First, then the media second to get the word out, then the consumer who scrambles to find a good deal to fill up and wade out the temporary spike.

ImageWrangler said...

Because CNN gets kickbacks and payoffs from big oil, or more likely and less tinfoil hat and sadly how marketing works, they're flooded with lobby organizations paid for by big oil to spin the story like what your read.

I used to work for AAA Publications and their lobby is pretty much in the pockets of big Detroit auto, big oil, and oddly, cell phones. So every time our supposed "news" unit would try to do a story about American cars sinking gas mileages or deaths attributed to cell phones or concerns about crash tests or conclusive evidence about unsafe roads corporate would, without explanation, nix those stories. Because of whom AAA sleeps with, gabbing on a cell phone with driving is okay, if not encouraged, piss-poor gas mileage like the Hummer is supposedly GOOD for American (WTF?) and the price of gas had nothing to do with markup but ONLY could be blamed on consumers. And this was before the record windfall profits that aren't taxed by big oil recently, this was back in the 90s.

We were told to run articles what were pretty much written and paid for by the lobbies of the industries themselves, they were nothing but marketing spin, disingenuous, dangerous, and devoid of actual reality or facts, it was like we became almost as bad as Faux News (almost), which is why I quit.

Integrity in the news media is dead, it's paid for, so this CNN article is your typical spin from most likely big oil to shift the blame. After all, it's got to be paid for.

scott said...

The gas station makes all its money off the snacks, so if people start a run on the station, and they run out of gas, they no longer have a draw for the snacks they actually make a profit on. Raising prices seems like decent way to regulate demand. If the gov. forces him to keep his prices the same "during a disaster," and he runs out of gas, who will pay for his lost revenue when no one is coming to the station?

Anonymous said...

Scott, if it's all about the snacks then why would the Krogers spike just as high. Surely people don't stop going to Kroger just because they run out of gas? Why the spike before the hurricane even hit? I can see a 3 cent increase due to the announcement that refineries would shut down temporarily, but I mean we went from $3.50 to $4.23 overnight.

scott said...

Walmart stations have a little snack bars, don't Kroger's? That's a good point if there aren't any snacks, but if the gas station doesn't make a lot of money on gas, and there aren't snacks, why would it operate? (this assumes stations actually do only make a few pennies on gas). My guess is that those stations do actually draw some people to the grocery store.

If my snack theory doesn't hold up, here's another thought: I'd rather have gas available at a higher price than no gas at all.

And one more question: who decides how much profit is gouging? It seems like gas station owners are forced to guess how much they can increase prices to deal with demand. They only find out after the fact exactly what level the gov. thought was fair. This seems a lot scarier than each individual making that decision. my 3 cents.

Anonymous said...

Thanks Scott, I think your points are quite valid. It will be interesting to see if by the end of the week prices begin to drop or if they hover for awhile.

Anonymous said...

Disagree with the CNN article which says the price spike is the direct result of people more or less "hoarding" gasoline .... Out here in the mid-west, we'd been paying anyplace from $3.55 to $3.89 for our gasoline - I always fill up on Thursdays and imagine my shock and dismay when I discovered *on Thursday afternoon* the price of gasoline had shot up to $3.95! Went to my regular filling station, and paid $3.79 to fill up --- Leaving town on Saturday morning and driving south, Surprise, Surprise! the price of gasoline was up to $4.25 - now, if my math doesn't fail me, that is an increase of $0.75 per gallon in less than 48 hours --- I'm not sure about CNN's definition, or that of their psychological experts, but I'm pretty sure that most people would call that kind of price increase "gouging."

Anonymous said...

While some of you can blame 'keeping up with the Joneses' and sudden short supply of gas for the recent gouge, I can tell you, here in Toronto, Canada, as Ike approached Texas, we saw gas prices surge to their highest level EVER. Even higher than what we saw when oil was at $147 a barrel. And there the prices sit (having come down a puny 4 cents just today). What is to blame here in the far north? Did anyone up here panic and hit the pumps? Nope. It's blatant, in-your-face robbery, plain and simple. Governments will never care so long as they collect endless tax revenue. It's collusion of the highest order...oil companies with each other and with government. You can try to intellectualize it all you want...we are all being ripped off. One day, the news is telling us demand is off and oil is falling, then they are telling you we are using up the available supply. Which is it? And why did gas prices never rise in double-digit percentage points overnight in the days before Katrina??

Anonymous said...

I don't want to know CNN's comments as much as our candidates comments on the gas spikes. Why are they not on the front pages giving their reasons for the spike and what they would do to help alleviate this? Obama, McCain? Aren't these relavent issues you should be discussing and commenting on??? Now that would be a CHANGE.