Gas & Taxes at New Ruskin College
www.NewRuskinCollege.com
Lecture Notes: 08-13-05
Dishonesty to the bitter end.
The camera moves in on the anchor woman with the slightly panicked expression: “Oil prices continue to climb.”
If I hear one more interviewer say, “but these higher prices do not seem to have changed demand . . .?” I will . . . I will . . . stop listening.
See how this willful ignorance is no different than anywhere else.
That today’s price is $14 (a barrel) under the price in 1980, adjusted for inflation, is simply ignored. Willful ignorance. It must be willful, a way of jazzing up an otherwise boring news cast, for the information is available:
*The first point to note is that, when adjusted for inflation, crude prices are actually only around a third of the level they reached in the late 1970s. In today's prices, the 1980 price was equivalent to $60 a barrel. (Independent)
*Economists point out that when adjusted for inflation, gas prices are not at their peak. The American Petroleum Institute said that today's fuel costs are actually 44 percent lower than in 1981. Gas then was $1.35 per gallon, which would equal $2.69 in today's dollars. (AZ-Central)
*However, adjusted for inflation, they remain below levels reached in the wake of the 1979 Iranian revolution when prices surged to upwards of $80 a barrel in today’s money. (Sify-India)
And even here the relevant facts are not included in the lead, which should be: “and in oil trading today . . . prices continued their long run up . . . starting to return to levels not seen in twenty five years . . .”
And isn’t this why the prices are not reducing demand? And doesn’t this also explain why consumers have shown less interest in fuel economy?
But this is itself only half of the story. For our economy is less dependent on oil than it was in the 1980s:
In the 15 countries of the European Union, for instance, the IEA estimates that oil's share of total energy consumption has fallen from 60 per cent in 1973 to some 40 per cent by 2001. In Britain, spending on oil used to be equivalent to 6 per cent of GDP; it is now just 2 per cent.
Even the US is less dependent on oil. William Poole, the president of the Federal Reserve Bank of St Louis, . . . estimates that, as a percentage of overall US output, the amount of oil the US uses has fallen by half over the past 30 years. (Independent)
So this ignorance, this distortion and misrepresentation is deliberate. The dishonesty in the mass media is only partly for ratings.
Note that the failure here to see oil prices in “adjusted” or “constant” dollars is very similar to the failure to see how the price mechanism is used to transfer taxes and other costs to the consumer in the dynamics of the market economy.
Previously we have noted that the maniacal focus on income taxes by the simple minded conservatives was a deliberate political tactic to take advantage of the ignorance of the people. We pointed out that “liberal” (really Post liberal) Democrats are willing partners for they too seek political advantage from the public’s ignorance.
The simple minded conservatives want the people to believe that the rich pay most of the taxes, and the Democrats also play off this falsity claiming that it is possible to tax the rich to pay for needed services.
As has been previously explained, in the absence of wage and price controls attempts to raise taxes on those whose products are services are in high demand will only result in higher prices for those needed goods or services, as the producers, (“the rich”, (this is why they are rich, their goods and services are in high demand), will simply raise their prices to offset the increasing taxes, as they will for any other increase in costs.
And these costs include the price of energy. The continuous rounds of price increases over the decades have not only offset taxes but they have offset the cost of Middle East oil. Year after year “the rich” have raised their prices, as did everyone who could, they have all raised their prices, and the relative cost of oil, and taxes, have fallen.
But to admit this, that the economy is a dynamic process where the price mechanism is continually adjusting these ever changing relationships would require the simple minded conservatives to admit that “the rich” are merely collecting the taxes for the state, (they can collect the taxes because their goods and services are in high demand), and the Democrats would also have to admit that their taxes on “the rich” are actually being transferred onto the people generally, (there is no free lunch).
So all parties are for political reasons locked into this lie, which the media can then use to sell advertising as it pumps up the lie that “oil is at a record high.” It is not.
Demand continues despite these price rises because the demand is responding to the real price, inflation adjusted price, not the hyped, false, price.
Supply has not increased in response to these prices because the “real” price has been low, below the cost of bringing on additional supply. The Tar Sands of Canada have more oil, energy, than does the Middle East. However the cost of extraction has been higher than the real price of oil until recently.
The danger for investors in Tar Sands is that because the real cost of extraction of Middle East oil is less than the cost to recover Tar Sands oil, if OPEC manipulated their price, dropping it down again, they could ruin the Tar Sands investor’s position. (Wall Street Journal) (Which is why I recommended an “oil floor proposal” price to prevent OPEC manipulation. see Lecture Notes: 03-03-05, Oil Floor Proposal)
But none of this is of the slightest interest to the TV and radio news readers who only want to hype the “record high price” of oil, the truth be damned.
And this is true as has been seen not just about oil prices but about taxes as well.
We live in a society in which we are continually being lied to by the powerful, the oligarchy which controls our society.
I will soon be dead. I will kill myself in protest of how society has allowed a few rich powerful people to harasse and ruin me. And some of the very same people who are now lying about oil prices, know the truth about what has been done to me, and some have actually encouraged my oppressors.
There is this invincible ignorance. A willful refusal to admit the truth. A betrayal of the truth and justice. Not just a betrayal of truth in the way they cover “news” stories but a betrayal of truth in all the rest of their lives. It corrupts our whole society.
So I go to my death, am forced to my death, by the very same willful oligarchy which uses its power to confound the people and keep them in ignorance.
How many have been betrayed? How many more will be betrayed? In everything . . .
www.NewRuskinCollege.com
Lecture Notes: 08-13-05
Dishonesty to the bitter end.
The camera moves in on the anchor woman with the slightly panicked expression: “Oil prices continue to climb.”
If I hear one more interviewer say, “but these higher prices do not seem to have changed demand . . .?” I will . . . I will . . . stop listening.
See how this willful ignorance is no different than anywhere else.
That today’s price is $14 (a barrel) under the price in 1980, adjusted for inflation, is simply ignored. Willful ignorance. It must be willful, a way of jazzing up an otherwise boring news cast, for the information is available:
*The first point to note is that, when adjusted for inflation, crude prices are actually only around a third of the level they reached in the late 1970s. In today's prices, the 1980 price was equivalent to $60 a barrel. (Independent)
*Economists point out that when adjusted for inflation, gas prices are not at their peak. The American Petroleum Institute said that today's fuel costs are actually 44 percent lower than in 1981. Gas then was $1.35 per gallon, which would equal $2.69 in today's dollars. (AZ-Central)
*However, adjusted for inflation, they remain below levels reached in the wake of the 1979 Iranian revolution when prices surged to upwards of $80 a barrel in today’s money. (Sify-India)
And even here the relevant facts are not included in the lead, which should be: “and in oil trading today . . . prices continued their long run up . . . starting to return to levels not seen in twenty five years . . .”
And isn’t this why the prices are not reducing demand? And doesn’t this also explain why consumers have shown less interest in fuel economy?
But this is itself only half of the story. For our economy is less dependent on oil than it was in the 1980s:
In the 15 countries of the European Union, for instance, the IEA estimates that oil's share of total energy consumption has fallen from 60 per cent in 1973 to some 40 per cent by 2001. In Britain, spending on oil used to be equivalent to 6 per cent of GDP; it is now just 2 per cent.
Even the US is less dependent on oil. William Poole, the president of the Federal Reserve Bank of St Louis, . . . estimates that, as a percentage of overall US output, the amount of oil the US uses has fallen by half over the past 30 years. (Independent)
So this ignorance, this distortion and misrepresentation is deliberate. The dishonesty in the mass media is only partly for ratings.
Note that the failure here to see oil prices in “adjusted” or “constant” dollars is very similar to the failure to see how the price mechanism is used to transfer taxes and other costs to the consumer in the dynamics of the market economy.
Previously we have noted that the maniacal focus on income taxes by the simple minded conservatives was a deliberate political tactic to take advantage of the ignorance of the people. We pointed out that “liberal” (really Post liberal) Democrats are willing partners for they too seek political advantage from the public’s ignorance.
The simple minded conservatives want the people to believe that the rich pay most of the taxes, and the Democrats also play off this falsity claiming that it is possible to tax the rich to pay for needed services.
As has been previously explained, in the absence of wage and price controls attempts to raise taxes on those whose products are services are in high demand will only result in higher prices for those needed goods or services, as the producers, (“the rich”, (this is why they are rich, their goods and services are in high demand), will simply raise their prices to offset the increasing taxes, as they will for any other increase in costs.
And these costs include the price of energy. The continuous rounds of price increases over the decades have not only offset taxes but they have offset the cost of Middle East oil. Year after year “the rich” have raised their prices, as did everyone who could, they have all raised their prices, and the relative cost of oil, and taxes, have fallen.
But to admit this, that the economy is a dynamic process where the price mechanism is continually adjusting these ever changing relationships would require the simple minded conservatives to admit that “the rich” are merely collecting the taxes for the state, (they can collect the taxes because their goods and services are in high demand), and the Democrats would also have to admit that their taxes on “the rich” are actually being transferred onto the people generally, (there is no free lunch).
So all parties are for political reasons locked into this lie, which the media can then use to sell advertising as it pumps up the lie that “oil is at a record high.” It is not.
Demand continues despite these price rises because the demand is responding to the real price, inflation adjusted price, not the hyped, false, price.
Supply has not increased in response to these prices because the “real” price has been low, below the cost of bringing on additional supply. The Tar Sands of Canada have more oil, energy, than does the Middle East. However the cost of extraction has been higher than the real price of oil until recently.
The danger for investors in Tar Sands is that because the real cost of extraction of Middle East oil is less than the cost to recover Tar Sands oil, if OPEC manipulated their price, dropping it down again, they could ruin the Tar Sands investor’s position. (Wall Street Journal) (Which is why I recommended an “oil floor proposal” price to prevent OPEC manipulation. see Lecture Notes: 03-03-05, Oil Floor Proposal)
But none of this is of the slightest interest to the TV and radio news readers who only want to hype the “record high price” of oil, the truth be damned.
And this is true as has been seen not just about oil prices but about taxes as well.
We live in a society in which we are continually being lied to by the powerful, the oligarchy which controls our society.
I will soon be dead. I will kill myself in protest of how society has allowed a few rich powerful people to harasse and ruin me. And some of the very same people who are now lying about oil prices, know the truth about what has been done to me, and some have actually encouraged my oppressors.
There is this invincible ignorance. A willful refusal to admit the truth. A betrayal of the truth and justice. Not just a betrayal of truth in the way they cover “news” stories but a betrayal of truth in all the rest of their lives. It corrupts our whole society.
So I go to my death, am forced to my death, by the very same willful oligarchy which uses its power to confound the people and keep them in ignorance.
How many have been betrayed? How many more will be betrayed? In everything . . .
www.NewRuskinCollege.com
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