George Bush, Republicans and their friends do not appear to be manipulating oil prices
Gas prices have gone down 17% recently, from $3.15 on August 1 to $2.67 today. I've heard and read several opinions that Bush is manipulating gas prices to increase Republican popularity for the midterm election, and supposedly 42% of Americans think Bush controls oil prices.
On one hand I can't rule it out entirely. It's possible, I suppose, ( Read more... )
On one hand I can't rule it out entirely. It's possible, I suppose, ( Read more... )
It can't be true regardless of elasticity--the propensity to change purchasing behavior in response to variations in price is the definition of elasticity.
Shoes, bread, hair gel - most people don't look for the absolute cheapest, they just drive to the store and buy what's availiable. If something is grossly overpriced they notice, but as long as everything is within the range of what they consider a "fair price" most people don't care.
There are a great many master's and PHD theses written entirely on this subject. Not being an MBA, I haven't read any of them, but I've talked with enough MBA's at parties to know that this is a gross oversimplification. Consumers' willingness to adjust their purchasing behavior to differences in price varies a great deal from one product to another; that's why economists and MBAs talk about demand elasticity.
AMD and Intel dictate wholesale prices just as effectively as gas stations.
First, the relevant comparison isn't between AMD/Intel (wholesaler) and gas stations (retailer), it's between AMD/Intel (wholesaler) and the ConocoPhillips/ExxonMobil/BP/etc. (wholesaler). Second, AMD/Intel are only able to dictate wholesale prices as effectively as gas wholesalers if the wholesale demand for chips is as inelastic as it is for gas. I have no idea whatsoever if this is the case. Third, AMD/Intel may be able to influence retail price through wholesale price, but they can't dictate it. There seems to be conflicting evidence as to the degree to which oil companies do this in practice, but they can if they want to, and AMD/Intel can't.
You can't conflate the general class of all anecdotal evidence with what I'm presenting here.
You said, "If you've got no information at all, one or two people's personal experience is better than ungrounded speculation...". "One or two people's personal experience" is pretty much the archetype of the general class of anecdotal evidence.
I couldn't simply insist that my speculation and your actual experience were somehow equivalent.
This is not how you used your personal experience above. You argued that your personal experience of gasoline prices was representative of an entire market ("I met two Tuvalans with blue eyes, therefore all/most Tuvalans have blue eyes.") I don't need personal experience of gas prices to know that's not a good idea.
If someone were speculating that all gas prices had fallen to $2.50 and you had pointed out your personal experience of paying $2.72, your analogy would be apt. Since no one did (that I know of), it's not.
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I understand that you're trying to say that our economic system is ridiculously complex, that there are a lot more gotchas than there appear to be, and that it's difficult to make sweeping generalizations without the sort of qualifiers that only qualified economists would know about in the first place.
What I'm saying is that if a completely unqualified person starts floating conspiracy theories, as another completely unqualified person I'm bringing what I've got to the table, and what little I've got does not in any way support the Flying Spaghetti Republican theory. It doesn't seem like a very good argument if the first completely unqualified person says "you can't say that - you're completely unqualified like me".
You argued that your personal experience of gasoline prices was representative of an entire market.
I argued that my personal experience of gasoline prices seems to be representative of the entire market, as shown by every market I've been able to look at having the same 15-20% price drop, both in regional gas prices and in worldwide contract prices for light sweet crude.
Granted that doesn't prove anything, but one gains confidence in theories by taking a theory's predictions and seeing if they're reflected in real-world observation. I've gained significant confidence in the market-price-drop theory for this reason, and lost significant confidence in the Flying Spaghetti Republican theory for the same reason.
You argued that your personal experience of gasoline prices was representative of an entire market ("I met two Tuvalans with blue eyes, therefore all/most Tuvalans have blue eyes.") I don't need personal experience of gas prices to know that's not a good idea.
No I didn't. I argued that market forces, not Republican midterm election concerns, are causing the drop in gas prices. When I started looking into it I found that my own personal experience with gas prices, coupled with some other guy's personal experience with gas prices, coupled with everything else I could find, supported this.
I'm not saying it's a proven fact, but every time I find a piece of new information it happens to agree. Just this morning someone told me that gas is under $2.00 in Kansas. "Whoah, I bet that means there's a really close race in Kansas and the Republicans are pulling out all the stops to preserve their power." Nope, Chuck Ahner is a pretty marginal challenger to a secure Democratic incumbent.
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It seems like a much better argument than "we're both completely unqualified, so I'm going to make an simplistic assertion about a complex subject that may or may not be supported by the huge volume of writings and evidence on the subject." Moreover, I am just qualified enough to say that if "most people don't look for the absolute cheapest, they just drive to the store and buy what's availiable" were true, economists and MBAs wouldn't spend all the time and energy they do studying the subject.
I argued that my personal experience of gasoline prices seems to be representative of the entire market
There is no national retail gasoline market. There's nowhere that you can go as a retail consumer to buy gas that people from NYC and Chicago and Florida can also go. There are thousands and thousands of local retail gasoline markets. You're basing your pricing assertions on a handful of non-random data points spread among a tiny, non-random sample of a very large group of related but separate and very large data sets, and trying to draw conclusions about all of those data sets in the aggregate. At best, your direct personal experience provides some evidence about the local gasoline market around your home and work--it doesn't even say much about the entirety of LA, never mind all of the relevant local markets around the country.
one gains confidence in theories by taking a theory's predictions and seeing if they're reflected in real-world observation.
Only if you have a whole lot of varied observations. If I were to assess the accuracy of global warming theory based solely on my personal observations of the temperatures in San Francisco over the last two months, I'd be pretty far off. I'd still be pretty far off if I supplemented my observations by talking to a friend in Marin and another in Daly City. I'd still be pretty far off if I also talked to friends in Australia and Finland.
No I didn't.
Yes, you really did. Not only did you, but you just reaffirmed it a few paragraphs above: "I argued that my personal experience of gasoline prices seems to be representative of the entire market..."
Your personal experience, plus some other guy's personal experience with gas prices, plus everything you've cited so far, says almost nothing about what prices even are among the thousands and thousands of local gas markets in the US, never mind what is causing them to be what they are.
everything else I could find
"It's all I could find" is not an effective response to an inability to find enough data to evaluate a position.
Just this morning someone told me that gas is under $2.00 in Kansas...
Do you really not see any of the many reasons why this is both fallacious and irrelevant?
the Flying Spaghetti Republican theory
Your continued insistance on this particular gambit doesn't enhance your argument. On the contrary, I think it signals that it's time for me to withdraw, because:
a) this isn't particularly useful, and
b) as much as I love and respect you, I think you're being intentionally obtuse and kind of a dick.
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