Unlike many of my classmates, I devoured the textbooks, making A’s in both courses because I realized that the material they were teaching was good stuff—really useable “real world” information. The mathematics required was only basic algebra, but unfortunately the math was the stumbling block for the non-engineering students that were my classmates. That was really sad since most college level students should have mastered algebra concepts in high school (I took algebra in junior high.)
I believe that every US citizen should have to take a couple of economics classes in order to get your voter registration card. If this were the case, we would see a completely different outcome in elections at both a local and national basis. Almost every single issue, from oil prices, healthcare, taxation, retirement, public debt, and international trade, all have economic foundations that form the fundamental basis of what decisions and policies will produce a positive economic result.
Dozens of current news stories lament $50 oil prices and the US dependence on foreign oil, while others predict the impending doom and gloom scenario of the world actually running out of oil in the next one hundred years. I suggest that a basic understanding of economics provides me with insight that allows me to discount the doom and gloom scenarios presented by the hysterical “nay-sayers.”
You do realize that crude oil was virtually worthless until Henry Ford introduced the $1,000 Model T Ford in 1908. Before that time, crude oil was burned for heating and refined into products like kerosene, tars and paraffin for industrial use.
Before the introduction of the automobile, prices on horses, horseshoes, and saddles were the topics of public conversation and consternation. If your town didn’t have a blacksmith, you had to take the time to ride your horse to where the blacksmith was, thereby increasing the real cost of operating your vehicle (the horse.) If your town grew rapidly and the number of horses increased, your local blacksmith invariably raised the price of a set of horse shoes no matter what your mayor or congressman said or did.
Since that time, the worldwide explosion of automobiles burning gasoline, trucks burning diesel fuel, and aircraft burning kerosene, all produced from crude oil, has caused demand to meet or exceed supply. The present prices are exactly where the supply/demand equations taught in my economics class predicted they should be. The prices have virtually nothing directly to do with our government, other the slight added cost of taxes imposed at the state and federal level. That, and the regulatory influence that government has over new refinery capacity.
As compared to European gas prices, our US prices are still a bargain because of our refinery capacity and the relatively low levels of taxation as compared to European taxation. Imagine the outcry if our prices that of these foreign countries as of March 2005.
| Nation | City | Price in USD Regular/Gallon |
| Netherlands | Amsterdam | $6.48 |
| Norway | Oslo | $6.27 |
| Italy | Milan | $5.96 |
| Denmark | Copenhagen | $5.93 |
| Belgium | Brussels | $5.91 |
| Sweden | Stockholm | $5.80 |
| United Kingdom | London | $5.79 |
| Germany | Frankfurt | $5.57 |
| France | Paris | $5.54 |
| Portugal | Lisbon | $5.35 |
| Hungary | Budapest | $4.94 |
| Luxembourg | $4.82 | |
| Croatia | Zagreb | $4.81 |
| Ireland | Dublin | $4.78 |
| Switzerland | Geneva | $4.74 |
| Spain | Madrid | $4.55 |
| Japan | Tokyo | $4.24 |
| Czech Republic | Prague | $4.19 |
| Romania | Bucharest | $4.09 |
| Andorra | $4.08 | |
| Estonia | Tallinn | $3.62 |
| Bulgaria | Sofia | $3.52 |
| Brazil | Brasilia | $3.12 |
| Cuba | Havana | $3.03 |
| Taiwan | Taipei | $2.84 |
| Lebanon | Beirut | $2.63 |
| South Africa | Johannesburg | $2.62 |
| Nicaragua | Managua | $2.61 |
| Panama | Panama City | $2.19 |
| Russia | Moscow | $2.10 |
| Puerto Rico | San Juan | $1.74 |
| Saudi Arabia | Riyadh | $0.91 |
| Kuwait | Kuwait City | $0.78 |
| Egypt | Cairo | $0.65 |
| Nigeria | Lagos | $0.38 |
| Venezuela | Caracas | $0.12 |
I don't know about you, but if GAS PRICES are all you have to worry about, looks like Caracas Venezuela is a good place to drive your SUV.
And since we have only had a "Petrolium Economy" for about 100 years, I'm certain that if gas prices rise high enough, things like cars powered by Hydrogen fuel cells will become technically and financially feasable. You might also see some cities in the south like Atlanta running public transportation (trains and busses) that go somewhere other than to the slums and the malls.
So which is it--Am I smart, or really really dumb--because I don't understand the hysteria?
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