Prolonging the Agony

CNN Money is reporting that
Card purchases jump to 70% of gasoline sales at convenience stores. This is up from 54% last year.

Convenience stores, which sell about three-quarters of all gasoline sold in the nation, have seen the use of credit cards for motor fuel purchases rise to 70 percent of all gasoline purchases from about 54 percent last year, according to the industry group.

Drivers are seen reaching into their pockets for plastic more often as they try to stretch their budgets.

"Consumers are trying to displace the pain for a few weeks," said Jeff Lenard, a spokesman for the group, which includes stores owned by oil companies.

Not only are consumers paying high gas prices, they now are willing to pay insane interest rate charges by prolonging the payment agony. Is willing the right word? Perhaps forced is a better word if they are struggling to pay bills and have no cash because prices are rising faster than wages. Of course this begs the question "What happens when housing prices decline and cash out refis can no longer be used to pay the gas bill?"

I believe it's time for some more Mish awards.
In the "So stupid we just have to try it again" category, Mish nominates the state of Hawaii PUC. Let's take a look.

The Public Utilities Commission likely will set the wholesale price cap for unleaded regular gasoline on O'ahu at $2.74 today, and it could lead to higher prices at the pump starting Sept. 1.

Hawaii will have the nation's only government-imposed restrictions on gasoline prices beginning next month, and today is when the PUC is scheduled to list the price limits on its Web site. The price caps will be adjusted weekly — on Wednesdays — and take effect the following week.

Based on The Advertiser's calculations, the wholesale cap will be $2.74 including 58 cents in taxes. That is almost equal to the average retail price of nearly $2.75 a gallon for regular gasoline in Honolulu yesterday. Assuming retailers add a markup, the price consumers pay at the pump will be higher under the gas cap.

No one knows what will happen to pump prices when the caps take effect because it only caps wholesale prices. However, if wholesalers charge the highest prices allowed under the law and retailers maintain an estimated 12 cents a gallon markup, the price cap could lead to a jump at the pump to $2.86 a gallon.

Mish has a few thoughts and questions:

• Does anyone think this will accomplish anything other than creating longer gasoline lines or perhaps even causing higher prices at the pump by companies gouging to the highest rate allowed?
• If they are going to raise the cap weekly, is there a point in having one?
• Did anyone in Hawaii study the effectiveness of wage/price controls the last time someone was stupid enough to try it?
• Perhaps the idea was just so stupid that someone felt obligated to try it again to see if it will work better the second time. I have a hint for whoever that genius was: It won't work any better this time around than it did the last time someone was stupid enough to try this.
  

The "stupidest oil taunt in history" award obviously goes to Pat Robertson. Speaking about Hugo Chavez, the democratically elected president of Venezuela, Pat Robertson, a former US presidential candidate had this to say: "If he thinks we're trying to assassinate him, I think that we really ought to go ahead and do it. It's a whole lot cheaper than starting a war. And I don't think any oil shipments will stop."

Look. Everyone knows that Chavez is a left wing nut job with ties to Castro. Just to make it even more clear, I am not any kind of fan of Chavez, in any way. However, the plain fact of the matter is he was democratically elected and the people in Venezuela support him. I apologize for injecting politics into the Mish blog, but facts are facts. It is simply not our place to decide what is best for Venezuela or anyone else for that matter.

One of the reasons gas prices are high is because Iraq is pumping less oil now than before we stupidly invaded that country. Now US religious leaders go around casually advocating assassination attempts on freely elected leaders of other countries. Robertson attempted to deny that he said "assassination" but when it was apparent just how bad a lie that was, he then attempted a half baked non-apology. I am sorry but Robertson never really did apologize.

"Mr. Robertson has been one of the president's staunchest allies," said Bernardo Álvarez, the Venezuelan ambassador to the United States. "His statement demands the strongest condemnation by the White House." I happen to agree. The entire affair was totally disgusting. All we saw was a bunch of duck and hide, wishy-washy statements from the administration, none from Bush himself, with everyone attempting to distance themselves from Robertson rather than do what was right. What would have been right was an immediate renouncement of Robertson's comments by President Bush himself.

This administration and their supporters are one of the largest sets of hypocrites in history. The USA Today nails it with this editorial comment: "If a major religious figure in any other nation were even to hint at the assassination of the president of these sovereign United States, he, and perhaps his country as well, would be excoriated for dangerous extremism and branded a terrorist — or worse."

Mish's "Gutless Award" of the year is a three way tie: The Traditional Values Coalition, the Family Research Council and the Christian Coalition. All of them said through spokesmen that they were "too busy to comment". Yeah right. Wait a second, better make that a 4 way tie since President Bush gutlessly hides from damn near everything.

Venezuela just so happens to be the fifth-largest oil exporter and a major supplier of oil to the United States. We should be thankful to have nearby oil. It is just not smart policy to go about antagonizing leaders of other countries, especially democratically elected ones. It just makes us look like the hypocrites that we are, and it certainly does not help the situation in the Mid-east either.

You want to blame someone for rising oil prices?
Blame Bush. OK blame Greenspan too. If you want to call it a tie, I can easily accept that.

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/