Regulating Gas Prices

tufsu1 · January 13, 2009, 09:44:35 PM

Here is one more reason why private businesses are often assisted by government regulation...

Gas price swings have trapped automakers before, especially last summer when the price spike caught many with too many pickup trucks and sport utility vehicles and too few smaller, more efficient cars. Lower prices cut sales of the Prius gas-electric hybrid by 45 percent in December and forced Toyota Motor Corp. to shelve construction of a new factory to make them in the U.S.

http://www.msnbc.msn.com/id/28643952/

Joe · January 13, 2009, 10:51:27 PM

I think the articles' conclusion is debatable at best. Lower gas prices caused a 45 drop in sales and a shelving of a new plant?? So it had nothing at all to do with the giant economic slowdown. Nothing at all.

BridgeTroll · January 14, 2009, 07:41:19 AM

This is exactly the short term thinking that got them into this predicament...

jaxnative · January 14, 2009, 03:24:36 PM

.....and it's governments responsibility to assist the auto industry by regulating another industry to create artificial market conditions? How do we as individuals and small businesses get big brother to protect our every move?

tufsu1 · January 14, 2009, 04:56:58 PM

Any rapid increase or decrease throws the equilibrium off.

Now with gas prices, clearly the rapid rise in fuel prices created a huge problem in the overall economy (not just car sales)....but it wasn't just the oil & gas industry playing with the prices....the rapid changes have been fueled (pun intended) by speculators and market futurists....add on top of that the whims of OPEC and it can get out of hand.

All that is being argued here is to set a floor (and perhaps a ceiling as well) so fluctuations are not so dramatic.

BridgeTroll · January 15, 2009, 06:42:42 AM

So... your actually advocating the governments intervention in fuel prices?? No kidding?

tufsu1 · January 15, 2009, 03:03:28 PM

yes...and even if they don't do it outright....opening/closing of our strategic reserves also effects the price....they can do that now.

Doctor_K · January 15, 2009, 03:07:03 PM

Slippery slope.

What else would you like for them to control that they don't already?

BridgeTroll · January 15, 2009, 05:07:38 PM

Quoteyes...and even if they don't do it outright....opening/closing of our strategic reserves also effects the price....they can do that now.

Nixon tried that... it failed miserably. The government should be buying every drop of oil they can get and stuff it into the reserve...

tufsu1 · January 15, 2009, 10:23:15 PM

the price of oil continues to drop because demand is low and apparently our reserves are at record levels.

BridgeTroll · January 16, 2009, 07:04:58 AM

This is good news. That said... Detroit should get off their ass, quit making excuses, and start making fuel efficient, and alternative autos.

tufsu1 · January 16, 2009, 08:10:47 AM

they are...Ford is about to release the 2010 Fusion....and the hybrid version gets around 35mpg city...which blows away all other hybrids its size....its only beat by the Civic and Prius.

But, with gas prices low, Prius sales dropped by 45% in the fall while truck sales actually climbed slightly....so for Ford, the big question is will people buy it?

BridgeTroll · January 16, 2009, 08:12:24 AM

Build it and they will come. Jacking up fuel prices so Detroit can sell cars is silly...

tufsu1 · January 16, 2009, 08:16:15 AM

it has little to do with selling cars to me.....I'm suggesting a floor and a ceiling....such that wild swings in the market don't have a ripple effect through our whole economy!

BridgeTroll · January 16, 2009, 08:22:57 AM

The effects of these swings are short term. I trust market forces to set the price of oil (I may not like the price) much, much more than a bureaucrat in the government. Perhaps that same bureaucrat can set wage upper and lower limits so the rich don't get richer and the poor do not get poorer.