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Republicans: In Denial Over Gasoline, Stupid or Just More Lies?

Republicans: In Denial Over Gasoline, Stupid or Just More Lies?

Republicans hate to hear facts about the price of gasoline, so I intend to keep forcing them into the public arena. Unfortunately, most Americans know a whole lot less than I know, and yet still think they know it all. It seems to be a growing trend in most things financial and even more so in all things political.

The Good News

American consumers and their wasteful ways are no longer responsible for swings in oil prices. Yes, we still use a disproportionate amount of the world’s energy. We still love our pickups, SUVs and pleasure boats, but damned if we want to pay the price to use them, regardless of whether we pay half of what other countries pay or not.

But when gasoline first reached $4 a gallon back in 2008 our gasoline habits began to finally change in a meaningful way. Average fuel economy has improved by 20% since 2004 in Ford’s fleet. Ford Focus sales, as the 40 mph domestic sales leader, have never been stronger. Similar sales increases are taking place in all brands. Spontaneous trips for chips have been replaced with planning and a dramatic increase in online sales of staple goods. Weekly gasoline demand is “tepid,” says JPMorgan oil analyst Lawrence Eagles, and he expects U.S. demand to fall even more this year by 100,000 barrels a day, even as the economy expands 2.2%.

Common-man theory says that weakening demand should be sending gasoline prices down. Supply-demand stalwarts refuse to acknowledge that the theory no longer applies to gasoline. So why are we “poor poor” Americans not seeing any reward for our “sacrifices”? Why is gasoline once again heading for $4 a gallon, with the possibility of $5?

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