Value Added Cost of Green

Originally posted on my Michigan Taxes Too Much site, I figured this would be a good inaugural article for Toxic Taxation.

House Speaker Pelosi: “This call for drilling in areas that are protected is a hoax, it’s an absolute hoax on the part of the Republicans and this administration” Continuing, “It’s a decoy to punt your attention away from the fact that their policies have produced $4-a-gallon gasoline.”

Hello $5 spike in the price of Oil shortly after she says she will stop the vote unlike her Senate counterpart Reid.

Small Coincidence? Not likely. The longer hold outs like Pelosi strangle our ability to reach richer and more valuable reserves, the more futures watchers will gauge the long term availability as being reduced. And, as any well tuned measuring device will predict higher prices at the pump and will try to lock in the oil at the lowest they can get for several months out.

It is how it works.. It is SO EASY to fall for the nonsense that "speculators cause" the high oil prices. Of course look at where it comes from. I would like to take a second to give an economics lesson, if only from my"limited" perspective.

I Buy stuff. I Buy it to sell it. Not only that, I buy it to sell it AT A PROFIT. That is what makes it worth my investment.

Now, assume I predict there will be a shortage of a particular product that is very popular. I make my analysis based on factors I am aware of, and pay attention to. Because of the popularity of that product, I will purchase as much for stock as I can, and in some cases lock in my order for the other items that are not even made to get ahead of the other guy who is my competitor. Of course MY competitor also sees the same signals, and tells the manufacturer that he needs them more and offers a "premium" for the ability to buy them first. This can lead to bidding wars, and here in a nutshell you have a lesson in how the market works.

So, when the SIGNAL SENT by congress is that it will restrict our ability to replenish our supplies, the buyers who NEED the resource will offer a premium to make sure THEIR SUPPLY is not interrupted. They pay MORE to guarantee the delivery of an amount they need. Nancy essentially said "hunker down you are in for a long hard cold winter with limited driving, flying, cause I ain't gonna let you drill where drilling is good."

I wonder if we were to assign a value for each politician on their effect on the price of a gallon of gas, if we could predict the next day's tank price? Pelosi just cost us $0.20 per gallon on this issue alone, in ONE DAY. What about Granholm? What if her assigning power of policy to the Center for climate strategies? Their "green" policies would stifle a number of our freedoms leading to higher fuel costs through formulation, bans, limits and wasted resource. What will they add to a gallon of gas in Michigan? Will it prevent us from Nuclear expansion?

Sadly, I am tired because of working a couple extra hours just so I can put fuel in my tank. I would like to leave you with something else to think about:

If the high profile liberals who are EXPECTED to restrain growth and prosperity cause higher prices (Pelosi $0.20 today, maybe $0.40 more overall, Obama $0.30-0.60, Granholm $0.20-0.30 - all made up numbers to illustrate a point) then what happens when high profile so called conservatives like Robertson, Gingrich, and McCain indicate their support for the green policies which brought us these problems in those "WE" ads? Using the made up math, my estimate is $1.00, $1.00 and $1.00 each. Because without the support of these crossovers the fringe would be seen as what it is.. the fringe. But sadly they have lent their credibility, and added to the bottom line in fuel cost by the watchers who will need the product at whatever the cost.