It seems to be one of those great mysteries of American life -- why does a gallon of gas cost the price it does? Sometimes we think we have a rough idea why: that it's tied to some nexus of Middle East politics and turmoil, oil company greed, and supply-and-demand. But is there more to it than that? And who is really pocketing the most from the profits?
We'll ask all those questions, and even hear about how some consumers believe it should cost even more than it does.
Count me among those who think gas should be much more expensive. More details on the event here .
Policy and a Pint... How was it? Well, for an event with David Strom in it, it had a surprising lack of bite. For one thing, both Strom and his interlocutor, Akshay Rao, a marketing professor in the U of MN's Carlson School, wore their economist hats for the entire hour. Steve Seel, the MPR's (The Current's) very Dee-jay-like emcee for the evening spend most of the time asking questions of each of them, and the audience spent most of the time listening to them agree.
Apparently gas prices are at 40 year highs right now, and will only continue to rise. Apparently the US Govt hasn't been doing enough to make long-term investments in alternative technology, and apparently US auto manufactures are not only stupid and stubborn, but (and this is according to Strom) the entire structure of US corporate governance is corrupt and incestual. Also, the only people really making a lot of money off of the high oil prices are the oligarchs in nations like Saudi Arabia, Venezuala, and Canada (!).
Where Seel should have pressed the two economists is about the role of government, and the possibility for cultural change. These are the only places that Rao and Strom seemed to disagree, for example, they had contrasting opinions about whether or not passing a gas tax was actually feasible. (Strom kept insisting that it would lead to a 'Bastille Day' amongst irate, tax-hatin' Americans.) Furthermore, they didn't really address the role of transit in the equation, and whether or not it even makes sense to consider cultural infrastructure as part of the oil equation. I think they also bespoke some mild disagreement on whether or not Europe was a good example of energy efficiency, and I think if climate change had really been broached, they'd probably have disagreed about that too.
Overall, though, it was kind of funny to see people that ostensibly are at opposite ends of the political spectrum agree on 90% of the issues. I'm not sure whether that was because economics is such a vague, abstract way of looking at problems that its hard to really use its language to tackle political issues, or because this was one of the cases of 'coming around full circle'. One of the questioners mentioned that they ought to have had someone representing "the left" on the stage with Strom and Rao. And if "the left" means someone who isn't a free market economist, then I'd have to agree...