The Media Has a Gas Attack

Every six months or so, the media decides to complain about gasoline prices. When that happens, you can be sure you’re going to hear talk about “price gouging” (a major economic myth). In all this, the lack of understanding about basic economics is amazing. Of course, remember that we’re dealing with journalists. Don’t expect gold in a pig sty.

CNN: Pain in the pocketbook — The price of gas keeps rising. Food costs are through the roof. Consumers are getting squeezed. By Tami Luhby

Squeezed? How? Uh, consumers don’t have to buy gas. They don’t have to buy anything, and if they do want to complain enough, complain to the government which heavily taxes gasoline in the first place.

And sometimes our priorities are amazing too. We will gladly spend $30 (or more) on ink for a printer, but not $3 a gallon on gasoline? Am I wrong in suspecting that gasoline is a little more complex product to produce?

Don’t expect Tami Luhby to give a drop of explanation as to why gas prices are going up. Jon Markham at The Street writes:

Higher prices at the pump today are a matter of simple economics. U.S. refiners have the ability to churn out 17 million barrels of gasoline per day. Demand is around 22 million barrels per day. To make up the difference, we bring in gasoline from foreign refiners, which means that, at the margins, pump prices are set by import prices.

Total U.S. demand for oil products is up 2.7% year to date, boosted in part by the surge in cold weather in February. But since we are far from the only country importing gasoline and other key refined products, we don’t have a lot of say in what those prices are.

Gasoline, like crude oil, is auctioned worldwide to the highest bidder, and with the dollar weak and overseas economic growth strong because of our fantastic appetite for iPods made in China and T-shirts made in Costa Rica, we have to pay up to keep our supply coming in. And that’s all there is to it.

With U.S. refinery capacity now at ridiculously low levels due in part to lack of investment in new plants amid harsh environmental rules, any little change in the supply chain has an amazingly powerful effect.

And the LAST place to place blame would be on ourselves right?

There’s no point in getting mad at the oil companies, despite their record profits. They aren’t gouging you, and the higher prices aren’t their fault.

The blame lies a lot farther upstream. It lies with Congress. It lies with corn farmers. It lies with the Chinese. It lies in Europe. And, I’m sorry to say, it mostly lies with you.

Unless you are a vegetarian city dweller who walks to work, has never let a plastic fork touch your lips and has never bought a cheap Asian-made cell phone, then you need to shoulder some of the responsibility for our consumerist culture’s absolutely extraordinary demand for crude oil and its refined byproducts.

Nor are we permitted to drill our own oil. Thank you environmentalists!

And it’s not just gas prices that are going up! Wow, even CORN is getting more expensive! Tami Luhby writes:

A bushel of yellow corn, for instance, cost an average of $5.12 in January, up 41% from a year earlier, according to U.S. Department of Agriculture statistics. Not only does this contribute to the higher prices of food made from corn, but it increases farmers’ cost of feeding cattle and pigs.

But why is it getting more expensive? Could it have something to do with the use of corn for fuel? (Thanks again, environmentalists.) Maybe there is MORE DEMAND for corn and THAT is why the price is going up? Hmm? And let’s not forget what this does to poorer nations who rely heavily on corn.

Gasoline comes to you relatively cheaply when you consider that oil companies have to go to some of the worst places on earth to get the stuff, then refine it, which often involves making all sorts of different kinds of gas to satisfy the regulations of individual states, and then transport the stuff safely. I don’t like increases in anything, but there are actual reasons for it. One would think that the media has no interest in educating the public about any of this, especially if there’s negativity that they can promote instead.

And if you doubt that the media wants to blare the negativity as much as it can, it actually solicits the public in helping in their agenda:

Have you lost your job, your business or your home? Are you raiding retirement accounts to pay the bills? We want to hear from you. Tell us how you’re being affected by the weakening economy and you could be profiled in an upcoming story. Send emails to realstories@cnnmoney.com.

And if you have the sense to just accept the fact that the costs of certain things goes up from time to time, that it’s all cyclical, and there’s not alot one can do about, then CNN has no use for you.