The energy "crisis"

So, gas is up way above $2 a gallon here in SW Michigan.  It’s a fascinating situation, from the causes through the effects.

 

At first, like many consumers, I thought this was gouging by the oil companies, and the local stations.  I’m sure that there is some profit taking going on locally, but I think the real explanation is that “big oil” is just realizing that the demand for oil is so inelastic that it can charge pretty much whatever it wants.  So, who is to blame in that situation…the company, or the consumers that act “irrationally” in an economic sense?

 

Take, for instance, a sight that can be found at any corner with two or more gas stations.  The gas in the tanks under the different gas stations is pretty much identical.  Therefore, price is the only factor that should determine where the consumer buys.  Therefore, if one station is even $.01 higher than the other, that station should get 0% market share.  That would be the economic “rational” customer.

 

Now, tell me if you’ve ever seen that.  The local news ran a story on how people wouldn’t drive ¼ mile down the road to save $.30/gallon.  That’s the complete opposite of “rational”.

 

Not only are consumers not acting rationally in the short term, they aren’t even making the changes in the long term that the mythical “rational” consumer would.  Inefficient large SUVs aren’t showing up en masse on used car lots, as their owners grab up Priuses. 

 

I wonder where the outrage went.  A couple of years back, when gas skyrocketed, there were protests, and state governments took steps to help consumers.  There is none of that this time around.  Have we as a nation really become that lazy?