gas stimulus package?

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Re: gas stimulus package?

Postby Corth » Wed May 21, 2008 3:51 am

Trying really hard to find a scrap of something in that paragraph to work with. I think maybe your making a point that environmentalism could theoretically be profitable within the context of the free market. If so, at least we're agreeing on the ground rules. And hey, I have considered for years the idea of forming a company to sell tee-shirts, coffee mugs, etc with liberal slogans on them. I dig the irony of making a buck off you guys! :)
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Re: gas stimulus package?

Postby Latreg » Wed May 21, 2008 8:01 pm

Corth you are confusing me (which ain't hard to do) Are the prices affected by supply/demand or what the market will bear? Personally I don't think it's suppley and demand as they can choose to reduce the supply via less manufacturing. I have always thought the prices where like the diamond trade, why are diamonds so expensive? cause they are rare, not when you look how many there are every year and all the tools that use them etc. The major holders just release a certain amount per year to keep the prices up, does fuel work this way as well? If the above is true then conserving 50 years ago wouldn't have made much if any difference and neither will conserving now. It could be the oil producers have gotten more agressive with making profits who knows, different managment etc.
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Re: gas stimulus package?

Postby Corth » Wed May 21, 2008 9:02 pm

First, the value of anything (even money) is determined by the intersection of supply and demand.

Second, the major difference between diamonds and oil is that diamonds are basically monopolized by one company, whereas there are literally hundreds of oil producers. No single oil producer by itself is capable of having much impact on the price of oil by limiting supply. OPEC, which is a cartel made up by several sovereign oil producers, (i.e. saudi arabia, iran, venezuela, etc.), controls enough of the market so that they CAN impact prices over the short term by limiting supply. Historically, it has not worked for any significant length of time because the individual members of OPEC start cheating as prices increase by going over their quota.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Sarvis » Wed May 21, 2008 10:24 pm

Corth wrote:First, the value of anything (even money) is determined by the intersection of supply and demand.


Except the Wii, which is demonstrably being sold at a retail price which is lower than it's supply/demand price. Oh, and just about every other manufactured product in existence since companies choose both the price point AND the amount to supply which renders S&D a completely moot point.

Second, the major difference between diamonds and oil is that diamonds are basically monopolized by one company, whereas there are literally hundreds of oil producers. No single oil producer by itself is capable of having much impact on the price of oil by limiting supply. OPEC, which is a cartel made up by several sovereign oil producers, (i.e. saudi arabia, iran, venezuela, etc.), controls enough of the market so that they CAN impact prices over the short term by limiting supply. Historically, it has not worked for any significant length of time because the individual members of OPEC start cheating as prices increase by going over their quota.


Ah, so when you say the value of anything is determined by supply and demend you really mean "the value of anything is determined by supply and demand, except when other stuff affects it."

Right then.

EDIT: Oh yeah, and software which is of unlimited supply. In fact, anything that can be digitized is unlimited... yet it still costs money.
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Re: gas stimulus package?

Postby Corth » Wed May 21, 2008 10:47 pm

Sarvis,

The wii is selling on ebay at the price that the market bears. Nintendo, for whatever reason, chose to price it for a lower amount, probably not anticipating the demand. As you yourself demonstrated however the last time this topic came up, the greater than anticipated demand, and insufficient supply, has caused the price to go up on ebay in the secondary market. So you prove my point for me.

Diamonds are also being sold pursuant to supply and demand. Its just that with diamonds, the monopoly that produces all of them artificially lowers supply to bring up prices.

Yes, supply can be manipulated, in some industries more than others. But its still supply that has to be manipulated to change prices.

So where exactly is anything being valued other than pursuant to supply and demand?
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Sarvis » Wed May 21, 2008 10:55 pm

If supply & demand calls for a higher price for the Wii, why doesn't Nintendo raise the price?

Because it's a retail product. It is manufactured. Nintendo chose the price point long before production started, and will stick with it until production costs lower and they re-evaluate.

Again, software, music and movies can be distributed digitally now which gives them essentially infinite supply. why are prices for such things above 0?

It's ludicrous to say that S&D determines price when companies use formulas to calculate price points based on profit margins and then use those formulas to determine how much product to produce. If anything, these days price determines demand as Sony recently discovered!
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Re: gas stimulus package?

Postby Yadir » Wed May 21, 2008 11:27 pm

Sarvis,

Are you wanting to discuss free markets or environmentalism? I'm not clear whether your point is that free markets are bad or that our lack of attention to environmental issues is bad (as seen in our preferences to purchase gas-guzzling SUVs). Could you clarify? Are you pointing the finger of blame at consumers, producers, the government, Corth?

I share Corth's view, I'm somewhat agnostic on environmentalism but I am interested in a discussion of economics and free markets.
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Re: gas stimulus package?

Postby Teyaha » Thu May 22, 2008 12:03 am

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Re: gas stimulus package?

Postby Todrael » Thu May 22, 2008 1:18 am

The "free market" is being fundamentally regulated and destroyed by government action such as Patents on all of that wonderful, new, environmentally friendly technology. Just because the "invention" is there doesn't mean someone could actually sell it to the public without getting sued into oblivion, or forced to spend decades doing "safety studies" on it (like pharmaceuticals).

Our current business atmosphere is quite a bit more stifled than even 30 years ago. Invention-to-market is slow, not because of scientific difficulties, but because of legislation.
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Re: gas stimulus package?

Postby Kifle » Thu May 22, 2008 2:16 am

Todrael wrote:The "free market" is being fundamentally regulated and destroyed by government action such as Patents on all of that wonderful, new, environmentally friendly technology. Just because the "invention" is there doesn't mean someone could actually sell it to the public without getting sued into oblivion, or forced to spend decades doing "safety studies" on it (like pharmaceuticals).

Our current business atmosphere is quite a bit more stifled than even 30 years ago. Invention-to-market is slow, not because of scientific difficulties, but because of legislation.


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Re: gas stimulus package?

Postby Yasden » Thu May 22, 2008 2:27 am

But you need facial hair to warm both noses.
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Re: gas stimulus package?

Postby teflor the ranger » Thu May 22, 2008 2:58 am

After reading all this... let's just call it what it is, shall we? Crap. Here's your summary.

Some people waste gas. If they didn't waste gas, it wouldn't cost so much.

Wooo.


No, seriously. This thread wins. Wait until the rest of the world gets into the idea of the automobile (this is happening right now) - this debate is largely irrelevant, because whether we try to conserve the limited resource or not, the difference is whether or not it runs out in 2050 or 2055.

So, no matter how much America conserved oil, right now, it'd all be sold to the Chinese - you know, like it is right now. The ignorance is in believing that America is the only country that uses gasoline. The price is going to come up no matter what. Get this. Limited resource being consumed. The price has nowhere to go but up.
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Re: gas stimulus package?

Postby Sarvis » Thu May 22, 2008 4:09 am

Yadir wrote:Sarvis,

Are you wanting to discuss free markets or environmentalism? I'm not clear whether your point is that free markets are bad or that our lack of attention to environmental issues is bad (as seen in our preferences to purchase gas-guzzling SUVs). Could you clarify? Are you pointing the finger of blame at consumers, producers, the government, Corth?

I share Corth's view, I'm somewhat agnostic on environmentalism but I am interested in a discussion of economics and free markets.


I reject the notion that the "free market" is a be-all-end-all solution to every problem under the sun. Corth is asking us to believe that capitalism is going to magically swoop in and save the day in regards to rising gas prices, when the simple fact is that gas prices are so high because simple economics has led us to eschew conservation of limited resources and helped to bring about our current/pending economic troubles.

Moreover the suggestion that, while environmentalists may not always have it right, listening to everything they say is a waste of time is just silly. Had we listened to them and not run out to buy SUVs for the last 20 years we would be in better shape today. Corth calls that "magic" but it's really just common sense: if a resource is limited you don't waste it. Unless, of course, you can make money by doing so... right?

Free market idealists seem to forget that all the sometimes overbearing regulation we have today came about because of the harm companies have caused in the past. We have fire codes because companies like the Triangle Shirtwaist Company locked their fire doors and their employees died in a fire. We have food/drug laws because people have died from tainted food and bad drugs. The free market answer to such things is that people made the decision to work in those places, eat those foods or take those drugs. It's a simple, childlike view. Yes, people made those choices. They almost certainly weren't informed of all the consequences, and in many cases may not have really had much choice. The choice between working in a sweatshop and barely feeding your family is better than starvation, but it's not a real choice in any case. It's merely a false choice between certain death and probable death.

We can and should do better. Corth is claiming victory because people are starting to buy smaller cars, but the joke on all of us is that next year they may not be able to afford gas for those cars either. The hilarity ensues when you realize that we could have had better technologies now if we'd simply tried to. GM <i>had</i> an electric car, the EV1, 10 years ago but abandoned the project and actually destroyed unsold inventory rather than sell it. Apparently it wasn't profitable enough, despite popularity among early adopters. It was somehow more profitable to destroy existing vehicles. Are we really better off for that decision? Is anyone other than Mobil, or maybe GM?

Lastly, the reliance on free market ideals to benefit our society rests on a shaky foundation. The free market is supposed to work, it is said, because people make decisions rationally and in their own best interest. I'm sure many people try to do this, but I'm also certain that even more do not. If we really did so, our advertisements wouldn't be filled with beautiful women selling cheap beer, official soups of the NFL and the constant intimation that the bigger your car the more of a man you are. If people were really rational about their purchasing decisions, none of those tactics would work. Unfortunately SUV advertising created a demand for a product detrimental to our society because it wasted a limited resource.

Because it's past my bedtime I'll use a recent Simpson's scene (paraphrased) as a demonstration :

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Bart: Do they have video games?
Marge: No
Bart: TV?
Marge: No
Bart: Comic books?
Marge: No
Bart: Bathroom?
Marge: Yes!
Bart: <i>That's really what I need</i>.

(Sorry if that's all a bit rambly, I'm tired...)
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Re: gas stimulus package?

Postby Corth » Thu May 22, 2008 6:18 am

I'll let Sarvis have the last word on most of the above. I feel like we've danced this dance once or twice before. Not interested at the moment.

I will however ask, with regard to the EV-1.. why GM is supposed to give a shit whether exxon or mobil makes any money. I mean really. Why would GM care if they're innovation was threatening exxon and mobil? You gotta explain that one to me, Sarvis. The big automobile manufacturers are fighting tooth and nail to make more energy efficient cars than their competition.. and somehow we're supposed to believe that they are out to protect 'big oil'? You gotta explain this conspiracy theory to me.
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Re: gas stimulus package?

Postby Sarvis » Thu May 22, 2008 7:14 am

I never said GM gave a shit about Mobil's profits, I merely pointed out who had the most to gain (besides apparently GM) if the EV1 was abandoned. You're the one who drew that conclusion.

Don't worry though, I'm sure there's no chance the Mobil guy asked the GM guy for a favor.

I'll have to take your word on the "fighting tooth and nail" thing, given that GM has a technology which was popular but which they are not using.
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Re: gas stimulus package?

Postby Corth » Thu May 22, 2008 2:05 pm

Go read about the EV1 technology Sarvis. Depending upon which model you had, it got between 55 and 150 miles after an 8 hour charge. If they were to mass produce it, the conventional wisdom was that it would have to be priced between $35,000 and $40,000 just for GM to break even. The people who did get use of an EV1 had the price subsidized by GM. Keep in mind that in the late 90's, $40,000 was worth a lot more than it is now. Its difficult to believe that are enough RICH environmentalists willing to plunk down that kind of money for such a limited vehicle. Truth be told, the only reason it was produced in the first place (and why GM wasted $1 billion on it) was to meet California's Zero Emmission mandate that 2% of all vehicles in the state as of 1998 produce zero emmissions.

Look, fact of the matter is GM could give 2 shits about Mobil's bottom line. All GM cares about is its own bottom line. If they had some sort of amazing rule changing technology that would leave Toyota, Nissan, and Chrysler eating dust, trust me they would take advantage of that as much as possible. GM might very well be bankrupt soon precisely because they have NOT been able to innovate as well as their competition. This conspiracy theory of yours, which you pretend to disavow, but in the very next line hint about 'favors' between the 'mobil guy' and the 'gm guy', is complete and utter rubbish.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Sarvis » Thu May 22, 2008 2:21 pm

So you're saying that it's impossible for GM to have improved on their existing technology? Or that a car which could cover a week's worth of commutes on a single, albeit long, charge would have no market in our society?

Please, talk about rubbish.

I also don't see how when you jump to a conclusion it's my fault. Nor how it's impossible for two companies who don't even compete to work together. Of course, I'm sure you'll believe that politicians can be bribed... but I guess CEOs are just morally superior.

EDIT: Oh, and it's funny that you complain about how I chop arguments up constantly, only to pick out one small part of my earlier post. A minor part, at that. Good job on claiming we're just retreading the same ground though, especially when I've only recently come to some of the conclusions I presented in that post!
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Re: gas stimulus package?

Postby Corth » Thu May 22, 2008 2:38 pm

The existing technology WAS improved on. Its called a hybrid. Its surprising hybrids are even produced considering that they threaten exxon and mobil! :)

The whole world is a conspiracy theory to you. You can't reconcile the fact that GM is trying to make money for GM, and will produce the best product as cheap as possible (and sell it for as much as possible) in order to increase its market share, that Exxon is trying to make money for Exxon so it sells its product to the highest bidder, and that I'm trying to save money when I buy a car, gasoline, or anything else for that matter.

That would have to be one big bribe for Mobil to convince GM to forego billions of dollars from some hypothetical groundbreaking technology. Such great technology that even now 10 years later, rather than release it and make billions, GM risks going bankrupt by selling inferior hybrid crap.
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Re: gas stimulus package?

Postby Sarvis » Thu May 22, 2008 2:50 pm

Corth wrote:The existing technology WAS improved on. Its called a hybrid. Its surprising hybrids are even produced considering that they threaten exxon and mobil! :)


Toyota started the trend... not like you can bribe everybody! Most of GM's hybrid offering's are still SUVs, which still get less gas milage than my conventional small car.

The whole world is a conspiracy theory to you.


Oh yeah, I'm ALWAYS going on about conspiracies. :roll:

You can't reconcile the fact that GM is trying to make money for GM, and will produce the best product as cheap as possible (and sell it for as much as possible) in order to increase its market share, that Exxon is trying to make money for Exxon so it sells its product to the highest bidder, and that I'm trying to save money when I buy a car, gasoline, or anything else for that matter.


You can't reconcile the fact that GM's CEO is trying to make GM's CEO money, and if he can get a couple million for not taking a risk why the hell wouldn't he? Seriously, if someone offered you $1 million to not take a case you weren't sure about what would you do? What if winning the case only meant $10k?

GM could probably have made a profit off the vehicle, but maybe not a great profit. Probably not enough of one to result in a raise for the CEO who clearly did all the work in bringing that product to fruition.


That would have to be one big bribe for Mobil to convince GM to forego billions of dollars from some hypothetical groundbreaking technology. Such great technology that even now 10 years later, rather than release it and make billions, GM risks going bankrupt by selling inferior hybrid crap.



Clearly something is wrong with their leadership, but I guess it can't be bribery. That would be unpossible!

Oh, and dare I bring up that there IS a company planning to make billions on a 100% electric car? Billions that GM could have had if they'd continued their research?

Maybe I shouldn't.
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Re: gas stimulus package?

Postby Corth » Thu May 22, 2008 2:58 pm

Its much more effective to bribe politicians than CEO's. First, CEO's of large corporations make a ton of money as it is. Risking loss of the $30 million per year job, along with possible jail time, is going to require a pretty substantial bribe for someone in that position. Moreover, CEO's, unlike politicians, have oversight. A politician answers only to his/her constitutents, which is kind of like answering to nobody. A CEO must answer to his board of directors and to the shareholders. If a CEO is taking steps that will obviously cost the company money, he WILL be overruled. Government, on the other hand, has no profit motive. There is no objective way to measure its success. Any particular decision by a politician can always be justified on ideological grounds.

I'd like you to find one example of a large corporate CEO (lets say, corporation with a market cap in excess of $5 billion dollars at the time) actively working against the best interests of his company as a result of a bribe. Just one example. I can probably find you 100 examples of politicians in an hour or so. Find me one with a CEO.
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Re: gas stimulus package?

Postby Sarvis » Thu May 22, 2008 3:11 pm

Like I said though, this was a risk. A CEO in this specific position could easily just say it was a bad idea and scrap the project without raising eyebrows.

As for politicians vs. CEOs, I'm sure you can find more. Maybe because <i>politicians are public figures</i> and we actually CAN find out what happened. CEOs operate behind closed doors, and we never really know what they're doing aside from the decisions they announce.

I did find one with a CEO bribing another high level official though: http://www.asiaone.com/News/AsiaOne%2BN ... 62698.html

In fact, I found a ton of stories about CEOs bribing people. Maybe they just don't bribe each other out of mutual respect or something. Right?

So, you didn't answer the question. Taking the case with a chance of earning $10 k, or not taking it for the gauranteed million?
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Re: gas stimulus package?

Postby Corth » Thu May 22, 2008 8:12 pm

Blah blah blah blah.. I couldn't find one instance in recorded history where a CEO of a large corporation actually received a bribe in order to undermine his own company.. blah blah blah.

But undoubtedly, the only reason that this super profitable groundbreaking technology was not used by GM to make a fortune was because the GM ceo must have been bribed by 'big oil'

:)
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Sarvis » Thu May 22, 2008 8:17 pm

Ah so that's the problem, you're one of those guys who doesn't actually read what I write.

Fine, fine. I'll just admit that CEOs are fine, upstanding citizens who would never do any wrong. Just nevermind the fact that every link I found about bribery involved a CEO and that I can only spend so much time searching at work.
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Re: gas stimulus package?

Postby Corth » Thu May 22, 2008 8:22 pm

Sarvis,

I read what you say quite carefully, even though you are almost always completely wrong.

You implied, quite strongly, that GM killed off a potentially very profitable venture either as a favor to 'big oil', or due to the CEO of GM being bribed by 'big oil'. I called you on that. A) Why would GM give a shit about Exxon's bottom line? You couldn't answer that. B) Name one instance in recorded history where the CEO of a large corporation took a bribe in exchange for undermining his company. You couldn't show one instance.

So explain to me again why GM killed off that vehicle. It couldn't possibly be because the vehicle was never going to make a profit, right?
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Sarvis » Thu May 22, 2008 8:47 pm

So wait, first it couldn't be a bribe because the EV1 was potentially very profitable... but at the end it's not a bribe because the car wouldn't have been profitable?

C'mon Corth, you're the one who chose to focus on one line in one paragraph of a 6 paragraph post. You should be able to do better if that's going to be your tactic.

You're ignoring things anyway:

1) CEOs are involved in bribery cases all the time
2) We don't have very good public insight into business practices, let alone a CEOs private life
3) The profitability of the EV1 is questionable, making the bribe easy since the CEO was likely having a tough time with the decision anyway. For fuck's sake it's 10 years later and you can't figure out if you think it would be profitable or not! Tell you what, decide it isn't profitable and I'll send you 10p.

Am I gauranteeing this is the case? No. It's certainly a possibility, and there's a lot of evidence that the decision didn't make sense. The market for the car was there, the technology would have improved if it hadn't been abandoned, they destroyed unsold merchandise rather than trying to recoup their losses and finally a company is currently doing what GM decided against.

In the end it was a minor point of a large post, and everything else still stands. Capitalism has not led us forward, it is only trying to recover from a slip-up it caused in the first place.
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Re: gas stimulus package?

Postby teflor the ranger » Fri May 23, 2008 12:55 am

It does take 10 years. Most profits are made in parts.
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Re: gas stimulus package?

Postby Yasden » Fri May 23, 2008 3:26 am

Which is why so many people are buying foreign now instead of domestic. The Big 3 are more than willing to take a minor loss when trying to move new cars, but they make a huge kickback on the manufacture and distribution of aftermarket parts to retailers all over the country.
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Re: gas stimulus package?

Postby Corth » Fri May 23, 2008 3:29 am

Sarvis,

http://gm-volt.com/

GM rushing to release the GM Volt by 2010. Next generation of electric car. They must not care about their friends at Exxon anymore. That or maybe with gas prices so high there is actually demand for this type of product. Hrmmm.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Sarvis » Fri May 23, 2008 3:46 am

They could have released it 10 years ago. *shrug*

So is the management team at GM even the same now?
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Re: gas stimulus package?

Postby Corth » Fri May 23, 2008 5:11 am

10 years ago gasoline was $1.50 a gallon. No demand for an electric car.

Today its close to $4.00 per gallon. GM is RUSHING to release one.

The market is real. Wake up or you'll be in fantasyland forever wondering why nobody does what you think they should.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Kifle » Fri May 23, 2008 5:16 am

Corth wrote:10 years ago gasoline was $1.50 a gallon. No demand for an electric car.

Today its close to $4.00 per gallon. GM is RUSHING to release one.

The market is real. Wake up or you'll be in fantasyland forever wondering why nobody does what you think they should.


Fantasyland has Unicorns though!
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Re: gas stimulus package?

Postby Corth » Fri May 23, 2008 5:25 am

When 2.0 is released we will listen to all the virtual enviornmentalists and conserve mana.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Teyaha » Fri May 23, 2008 5:26 am

http://www.youtube.com/watch?v=YK5-8MFC0Uc

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Re: gas stimulus package?

Postby Sarvis » Fri May 23, 2008 12:26 pm

Corth wrote:10 years ago gasoline was $1.50 a gallon. No demand for an electric car.

Today its close to $4.00 per gallon. GM is RUSHING to release one.

The market is real. Wake up or you'll be in fantasyland forever wondering why nobody does what you think they should.


There was a demand for it 10 years ago. This was documented. People leased them (the only option), and people who had them wanted to keep them. GM wouldn't allow them to.

EDIT: Oh, but you seem to be going with the "not profitable" path. I'll send you the 10p next time I log in.
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Re: gas stimulus package?

Postby Corth » Fri May 23, 2008 12:48 pm

Oh yes they leased 600 at subsidized prices. Definite proof of concept there!

At $1.50 per gallon there would be TONS of demand for an electric vehicle. Obviously the easiest way to explain GM not wanting to make this HUGE profit was so that it could do a favor for it friends at Exxon and keep the price of oil from dropping!

Thats how tin-hat liberals think. Can we get a normal liberal here? Ragorn where the hell are you?!
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Corth » Fri May 23, 2008 12:48 pm

Corth wrote:10 years ago gasoline was $1.50 a gallon. No demand for an electric car.

Today its close to $4.00 per gallon. GM is RUSHING to release one.

The market is real. Wake up or you'll be in fantasyland forever wondering why nobody does what you think they should.


Read it again Sarvis. Its for your own good.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby flib » Fri May 23, 2008 1:14 pm

ya, i'm sorry i'm not buying it. Prior to us going to war gas was like 1 dollar a gallon maybe a bit more 5 or so years down the line it's 4 dollars a gallon. That's a gigantic hike, at the moment we've reached some type of peace or something since the insurgance or whatever but gas prices are still going up, it doesn't make sense. I don't know, i'm not really a political giant but something is hinky with this, it just doesn't seem right to me.

I understand the idea of inflation and supply and demand but 300 % in five years? there's something really wrong with that, nothing has that kind of inflation, which leads me to think there's some big wigs around pulling strings and making money on our heads, I don't know though, I could just be paranoid.

Oh, and ya I (hopefully) will be receiving my check soonish, as it's going by the last 2 digits in yer soc and mine is in the 40's so i think it said at the latest mid june or something, cmon 600 bucks!

oh by the way, I filled up by truck this morning, 30 gallon tank cost me one hundred and fifteen dollars. sigh.
Last edited by flib on Fri May 23, 2008 7:08 pm, edited 1 time in total.
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Re: gas stimulus package?

Postby Corth » Fri May 23, 2008 1:41 pm

Flib,

First off, the US Dollar has lost about 40% of its value in the last several years. That in and of itself implies that the price of commodities in dollar terms should nearly double. Additionally, in the past few years we have gone from a surplus of oil to a deficit. This process will continue to get worse as we have reached 'peak oil' and China and India show no sign of slowing down. The refined products of oil are very inelastic. There are no suitable alternatives for it. If you want to drive your car, you need to buy it. Something like that is VERY vulnerable to severe price hikes when you have a supply/demand imbalance. There isn't enough gasoline for everyone who needs it, so who are the weak hands that are going to stop consuming? Let me put it this way. If gasoline were to go up to $6 per gallon, are many of your friends going to just quit their jobs to save money on the commute? Probably not, huh? The price will keep going up until enough consumers throw in the towel and a temporary equilibrium is reached.

One final point. You discussed inflation in terms of price increases. This is how most people think about inflation. However, defining inflation in that manner creates unnecessary confusion. For instance, we have had pretty regular inflation over the last, say, 20 years. And yet, the price of computers have decreased significantly over that time period. How is that explained? Meanwhile, as you mention, the the cost of energy commodities have been rising at a far faster rate than the reported rate inflation. Here's the rub.. as I said before, the price of anything is ultimately determined by supply and demand. Inflation is better thought of as a net increase in the supply of money. Higher prices is the aggregate are in inevitable symptom of inflation since there is more money out there chasing the same scarce goods. However, once you think in these terms, its easier to understand why prices do not always rise and fall at the same rate of inflation. There are numerous other factors that determine the price of goods.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Sarvis » Fri May 23, 2008 5:13 pm

Corth wrote:Oh yes they leased 600 at subsidized prices. Definite proof of concept there!


And most (maybe all) of those people offered to buy when the lease was up.

At $1.50 per gallon there would be TONS of demand for an electric vehicle.


People who understood the need to conserve a limited resource would have bought them. People who wanted to save money on gas would have as well. Fuck, the Prius was introduced and profitable long before gas hit $4/gallon. At $0.03/mile (what the Tesla is claiming) people would have bought just to save money on gas, even if it was only $1.50.

Obviously the easiest way to explain GM not wanting to make this HUGE profit was so that it could do a favor for it friends at Exxon and keep the price of oil from dropping!

Thats how tin-hat liberals think. Can we get a normal liberal here? Ragorn where the hell are you?!


Hey, I just said who benefits. You are the one who assumed I was bringing up a conspiracy theory. It's not impossible, either. For fuck's sake I just bribed you to decide the car was unprofitable with virtual money!

The refined products of oil are very inelastic. There are no suitable alternatives for it.


None that anyone chose to sell, anyway!


Here's the rub.. as I said before, the price of anything is ultimately determined by supply and demand.


It's funny, you keep saying this... but keep failing to defend the point. It is demonstrably untrue for most products.
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Re: gas stimulus package?

Postby Corth » Fri May 23, 2008 7:14 pm

Sarvis,

I wont disagree that there are people out there willing to spend a lot more money than necessary and undertake inconvenience in order to promote a good environment. However, I don't believe, and apparently GM didn't believe, that there were enough such people to create enough demand to profitably market the EV1.

Isn't that such an easier explanation for the demise of that vehicle? Occam's razor!

Interestingly enough, GM is RACING to put out its new GM Volt vehicle. With $4.00 gasoline plug in cars are a great alternative.. and thats a really cool car. First 40 miles are electric only... so you don't use any gas at all for local driving. BUT, if you choose to go a long distance, you can get some 400 miles off of a full tank of gas (7 gallon tank!). Freaking awesome! With a 30k price tag, I think GM might have a real winner on its hands. Especially if gasoline prices remain high.

Of course, if they went back down to $1.50 a gallon, the Volt probably doesn't sell so well. Not enough rich environmentalists. See how market reality trumps your fantasyland?
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Gormal » Fri May 23, 2008 7:18 pm

Until you see your electric bill.
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Re: gas stimulus package?

Postby Corth » Fri May 23, 2008 7:24 pm

Well, on a per mile basis I think electric is significantly cheaper than gasoline. But yeah thats worth mentioning.

The good thing about electricity is that you have a lot of options for making it, whereas making gasoline.. theres only one way to do that. There is pretty much an endless supply of coal, for instance, in the US, and coal I believe is the #1 feedstock for electricity still in this country. You can also make electricity out of natural gas, solar, wind, waves, etc. Electricity is not dense enough in most cases to use exclusively as a transportation energy source. Even with the Volt, your only getting about 40 miles before the gasoline kicks in. However, the Volt is versatile enough so that the bulk of driving.. 40 mile trips or less, will not use any gasoline at all. Thats pretty remarkable imho.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Sarvis » Fri May 23, 2008 9:41 pm

Corth wrote:Sarvis,

I wont disagree that there are people out there willing to spend a lot more money than necessary and undertake inconvenience in order to promote a good environment. However, I don't believe, and apparently GM didn't believe, that there were enough such people to create enough demand to profitably market the EV1.

Isn't that such an easier explanation for the demise of that vehicle? Occam's razor!

Interestingly enough, GM is RACING to put out its new GM Volt vehicle. With $4.00 gasoline plug in cars are a great alternative.. and thats a really cool car. First 40 miles are electric only... so you don't use any gas at all for local driving. BUT, if you choose to go a long distance, you can get some 400 miles off of a full tank of gas (7 gallon tank!). Freaking awesome! With a 30k price tag, I think GM might have a real winner on its hands. Especially if gasoline prices remain high.

Of course, if they went back down to $1.50 a gallon, the Volt probably doesn't sell so well. Not enough rich environmentalists. See how market reality trumps your fantasyland?


GM is racing now when they could have been ahead of the game. Are you honestly telling us GM wasn't smart enough to expect gas prices to rise so that their shiny new technology would be viable, and/or didn't want to be the leader in that field?

Occam's razor indeed.
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Re: gas stimulus package?

Postby Sarvis » Fri May 23, 2008 9:54 pm

Look, enough of your straw man nonsense. My overall point stands whether GM was bribed or not.

The free market did not result in companies and consumers taking the steps necessary to prevent the current economic strife we are now facing. Capitalism is about making money, not about providing the best possible future. That's really all there is to it.

Either it was not profitable for GM to provide products which created a better future, or someone else influenced them for their own profit. Either way the market didn't work in society's best interests.
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Re: gas stimulus package?

Postby Corth » Fri May 23, 2008 10:03 pm

Again we're talking fantasyland. "Could have been". "Should have been". Etc.

The free market is working in society's best interest by creating an economic incentive to create transportation and energy alternatives. Its doing what its supposed to be doing, and its doing it right. There was no need for an EV1 10 years ago because there was no economic reason for it to exist. Now there is a reason, and the free market is going to get plug-in electric cars onto the market ASAP. The free market didn't fail to anticipate anything worth anticipating. Once fuel prices started going up, the market started to put together alternatives which will allow us to more efficiently use our existing energy supply.

What is it exactly that you wanted to prevent? Life from happening?
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Osheara » Fri May 23, 2008 11:55 pm

You all make me laugh a little inside sometimes.

I have found some very interesting discussions on the gas issues that you all may find educating.

One about the prices hitting $4.00 and beyond:

http://www.absolutewrite.com/forums/sho ... p?t=102834

This one about the 'mom and pop' stations around the country:

http://www.absolutewrite.com/forums/sho ... p?t=103337
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Re: gas stimulus package?

Postby Sarvis » Sat May 24, 2008 12:04 am

Corth wrote:Again we're talking fantasyland. "Could have been". "Should have been". Etc.

The free market is working in society's best interest by creating an economic incentive to create transportation and energy alternatives. Its doing what its supposed to be doing, and its doing it right. There was no need for an EV1 10 years ago because there was no economic reason for it to exist. Now there is a reason, and the free market is going to get plug-in electric cars onto the market ASAP. The free market didn't fail to anticipate anything worth anticipating. Once fuel prices started going up, the market started to put together alternatives which will allow us to more efficiently use our existing energy supply.

What is it exactly that you wanted to prevent? Life from happening?



Wow Corth. Just... wow.

Your basic argument is that we're better off not preventing something that's preventable. There's no point in addressing a problem _before_ it becomes a crisis? Is that really how you run your life? Do you really think that's the best possible way to handle things? How many succesful corporations can you name that take such a stance?
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Re: gas stimulus package?

Postby Corth » Sat May 24, 2008 12:15 am

I'm all for trying to avoid a crisis. The problem with your argument is that there is no crisis here. Commodity prices go up and down over time. With higher prices, the market creates two separate incentives. First, it creates an incentive for oil producers to produce more oil (increase supply). Second, it creates an incentive for consumers of gasoline to purchase more efficient vehicles (decrease demand). In turn, companies such as GM innovate to meet the demand for more fuel efficient vehicles. Over time this dynamic creates a new equilibrium and society is much better off for it.

This isn't a crisis. Its life happening. Its reality.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: gas stimulus package?

Postby Sarvis » Sat May 24, 2008 12:18 am

Right. Not a crisis. Maybe not to a lawyer who can easily handle the increase in price for necessities such as food, but a lot of people are being hurt by this. I guess they don't count though, as they probably aren't profitable anyway.
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Re: gas stimulus package?

Postby Corth » Sat May 24, 2008 12:32 am

Shrug. Sarvis, its life. Oil doesn't appear out of nowhere magically. It has to be taken out of the ground. Nobody was going to do it until it was worth some money. Now everyone wants it and its worth a lot of money. Life isn't rainbow kisses and dogs chasing their own tail. Sometimes its easy, sometimes its difficult. But you can't snap your finger in fantasyland and make things appear out of nowhere. Certainly its not comfortable when commodity prices go up, as they do periodically, due to not enough supply and too much demand, but you can at least appreciate that it will spur a lot of very beneficial innovation. Real life isn't always pleasant, but over time the standard of living does get better.

And no, its not a crisis. Genocide in Darfur.. crisis. Earthquake in china.. crisis. $4.00 gasoline... that would be cheap for our friends in Europe.

Ultimately, the most ironic thing about these posts is that the "crisis" you complain of, high gas prices, is exactly what is finally going to bring about the green revolution that you believe is so necessary.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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