This subject should get people chatting. It my thought is that since most of American auto makers make Huge profits from SUV sales, they have since flooded the market with SUVs.Foreign automakers have jumped on the bandwagon as well. As we all know a typical truck get less gas mileage than a car. Nowdays the SUV has became a status symbol in America.Maybe because of all the commercials we see on TV. But unless you live in the snow belt or in the mountains, do we really need these SUVs as much as we think? My point being, since these trucks do use more fuel and energy ,and since this is a worldwide thing, did corporate greed cause Americans and every other country to use more fuel than we need to? Thus putting a big strain on the worlds oil supply?Please tell me what u think. Oh by the way i own a Ford Bronco Yea i know but i am a big guy and i live in a snowy town so sue me .

 

The automakers built what the consumer wanted, nothing more. Consumers have always wanted bigger and faster since the beginning of time. Sometimes they get slapped with reality or higher consumable prices whether it be gas, or horse flesh. Nothing new or different here, no dark conspiracies, just human nature.

 

I agree with torque1st in that those vehicles are by in large exactly what people wanted. They didn't buy them before probably because they didn't need to have them or because they just weren't that attractive an option. Early SUV's weren't as comfy as they are now, generally driving like the trucks on which they were based.

I do feel that heavy-duty advertising has gone hand-in-hand with their production. A lot of money is used to create ads that entice people to buy things, be they the purple pill or the nissan murano (for the "urban adventure"). People's minds are very susceptible to advertising techniques. At the end of the day, however, we're the ones that choose to buy them.

I'm sure the oil companies are not crying about the increase in demand by these vehicles (what is it, 1/2 the vehicles bought today are SUVs?). The greater the demand, the more secure their profits are.

 

Regarding corporate greed and high gas prices, you can bet your life that there is a connection. For example, soon you will be reading how the recent spike in gasoline prices had little to do with Katrina, and a lot to do with price gouging.

 

As related to your argument and SUVs, NO. Basic supply and demand. The fact that you are also driving a SUV show that you have a need or demand to use one. Do you want anyone telling you to buy a KIA? Small economy cars have been available since the 50s (VW Beetle) and are still available today right? But they weren't really selling well, why not? NOT MANY PEOPLE WANTED THEM!!! Corporations are not charities. They are going to build what people want.

Why do people want SUVs? Why weren't they popular in the 60s and 70s? Because there were powerful, fast CARS available then. Station wagons were available with large motors that were powerful and cruised comfortably. There were also sports and muscle cars. Then in the early 70s there was a gas crunch AND insurance rates for large cars went way up. The Gov't implemented CAFE, but trucks were exempt. Trucks also had lower insurance rates. So automakers could build big powerful vehicles their customers wanted and the drivers could afford to operate due to lower cost of ownership. So the SUV and mini-van thrived and the station wagon and muscle car faded away.

Same thing is true with gasoline. The price is raised and consumption doesn't change, why should the company drop the price? Obviously the market will bear the higher price. No one changed their habits. Here it got as high as $4.00/gal before people started cancelling vacations for labor day. Then the price dropped back to $3.29. If the demand doesn't stay depressed, I don't think it will drop from there. BTW, NOW we have the highest, inflation adjusted prices for fuel. Topping the record set in 1979. Basic economics states that a company will make more money with a slightly lower price and high demand. If the price is higher than the market will bear and demand dropps the company will not make as much money. If the price goes up and demand doesn't change, then there is no reason to drop the price, the company is making the most it can.

That being said, when I see a gas station raise the price three times in a day, I have to believe THAT is gouging and I will not shop there again. To me gouging is taking advantage of the panic that exists during an emergency to make a buck. So yes I do think some gouging occurred last week. But that may have been more the individual staions fault.

Now why is it ok for the price of a house to go up 30% in a year but not for gas to do the same thing?

 

I'm sure that corporate greed was part of it, but there's another large factor, and some others here touched on it. After the gas crunch of the 70s, everybody wanted fuel-efficient vehicles, so there were tons of small four-bangers unleashed on the American public. Toyota can probably attribute its very existence today to the early 80s. However, the backlash was that all these much smaller vehicles were found to be deathtraps in accidents. By now, it's the 1990s, and with more creative financing and an economic boom, more people can afford the higher-priced SUVs coming on the market--afford both the initial price and the cost to run them. I suspect that if gas prices go much higher, we'll see the pendulum swing back the other way, particularly now that small cars are much better built (in terms of safety features, anyway) overall.

Jason

 

Everyone blames corporations.... and forgets the law of supply and demand has existed for as long as commerce has existed. Any company that doesn't maximize its profitability will find its CEO and board out on the streets for failing to meet their fiduciary responsibility to the company shareholders. These same gas companies everyone is point their fingers at now will be blamed 15 years from now when they aren't making money and don't have the $$$ resources to develop new sources.

For every supply side, there is a demand side. Don't forget that in many states there was a gas panic by consumers. If you ran a business and had 5 products for sale and 20 people wanting that product you can bet your bottom line you're going to sell it to the highest bidder. If you have 19 products and 20 buyers the equation is naturally different. Or if there are 5 other guys selling the same products. Its competition, in combination with higher supply and/or lower demand that lowers prices. When selling a vehicle, who gets it? The guy who low ***** you or the guy who comes up with the best offer? Again, just as with corporate responsbility to its share holders the small businessman running a corner gas station has a financial responsibility to his family.

For every finger we point at the corporations, there are 4 pointing back at the consumers of fuel.

 

The world is the way we built it. Mmmmm sounds deep.

BTW. Is there such a thing as an 'anti-price gouging' law? I'm not aware of one. If there is one, then how do you prevent the gov't from setting all prices?

It is hard not to get angry at the oil companies because you as a consumer really have no choice. At least with food, I could grow a garden if I wanted. For clothes, I've shopped second hand stores. But with gas, you are really stuck. Sometimes you almost wish the gov't did set the price but the oil companies are not public utilities, so gov't has no jurisdiction there. Now when the price at every different station goes up the same amount, to the same price, on the same day, it does make me wonder if there is some sort of informal trust in place among the oil companies. If there was an agreement between Mobile and Chevron and BP and every other company that the price would be the same from all of them, THEN they have violated the anti-trust laws and engaged in price fixing. Good luck getting any prosecutor to pursue that.

 

What is corporate greed?

When you sell your car, you're going to go looking for the maximum price people who want to buy a car are willing to pay. No?

 

so, explain this.....if the price of crude goes up, production costs remain basically the same, why are the oil companies recording record profits??

I understand the laws of supply & demand, & saw a lot less traffic this weekend(for a holiday weekend), however,when gas prices change (UP) hourly, in fear of supply, or whatever, once the fear of the unknown goes away, & supplies are back to quasi normal, why don"t the prices go down, just as fast as they went up????
oilman in the whitehouse

 

Now now. We dont go there 'round here. Answer me this: why should the prices go down?

 

See my post above.

 

I think it is interesting that fuel began to rise here in Montana immediately even though our oil is refined in Montana and supplied from Alberta, Canada. How did the hurricane damage the Canadian facilites? The price of oil is not higher than it was before the storm so that theory is a load of crap.

I think that many forget that Greed is the very definition of a corporation. A corporation exists only for the purpose of making money for the stock holders. They are rewarded for being more greedy, and will continue to do so until the market will not bear the prices they are charging. But when all of the resources are in their control, the consumer will will have to bear whatever price they set. No matter the price it is vital that we transport men and materials, therefore the cost of these goods and services will also increase in price to reflect increased transportation costs, until the whole thing grinds to a halt because the consumers of our economy can no longer afford the goods it produces (inflation).

I find it really interesting that the economic statistics report very little inflaton even though many goods are twice the price they were 15 yrs ago. How long can we continue to raise prices annually before we price ourselves out of own market and self induce a major recession?

The bottom line is that the oil industry is collecting record profits and you are paying for it. The only real thing you can do is stop buying their products as much as you can. Smile!!! You are participating in the american dream, unfortunately you are the fuel for the economy not reaping its rewards, oh well, maybe you will be born into an oil family in your next life.

 

^^^^ What he said. . .

 

Indefinately. Because as prices go up what are you going to do? Are you just going to lay down and die simply because your income won't cover your expenses? Probably not. You will either demand a raise, or failing that, take a second job, or look elsewhere for work that pays better. After you leave, your ex-employer will have to fill the position, so they will try to hire someone who also can't afford to live at that wage so the employer will have to sweeten the deal. Eventually wages rise along with everything else. Maybe not at the same rate.

My question is what is the point? Why raise prices when in the long run, overall inflation will make those raises meaningless. So the oil companies are posting record profits in today's dollars, so what? How does that compare to the value of their profits 30 years ago? It's as meaningless as guaging a movie's popularity by its box-office receipts. So the latest movie grossed X-teen bazillion dollars, was it more popular than say, "Gone with the Wind"? How can you tell. The price of a movie ticket now is $15.00. Then it was $0.25. Which movie did more people see? You can't really tell.