Another Perspective

Supply and Demand

Face it -- energy consumers will pay whatever is demanded.

By 4.28.06

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So, Uncle Pundit, why are gas prices so high?

"Simple, my boy: supply and demand. Don't you read the papers?"

Yes, but --

"It's in the lexicon of all the big oil companies: 'Supply and Demand -- you supply the money we demand.'"

In other words, you don't believe it.

"Sure. Like I believe in DNA and all the other new gods. Look. If you could get 70-some bucks a barrel for all that stuff in the ground and at the other end charge more than $3 a gallon and discover people would actually pay that amount and then drive off muttering about 'supply and demand,' wouldn't you do it? Only problem comes when you gotta tell the world what your profits are and what you are paying your CEO."

Can folks stand for it?

"Can they stand for bird flu? What are the alternatives -- kill all the birds? Folks are so numb by now they stand for anything. Remember the last time gas shot up past $3 a gallon? Much moaning at the bar. Then prices retreated a few cents...a few cents below $3...and the numb public heaved a big sigh of relief and gladly paid $2.89."

But those Chinese...

"Part of the supply and demand scam; blame the Chinese for jumping off their bikes and driving Lexus', all one billion one hundred million of 'em. Know what gas costs in China these days?"

A lot, I bet.

"A little more than a dollar and a lot less than 2. But look, stuff is going up you never even hear about. You ever pay off your student loan?"

Finally.

"You paid somewhere around 4-and-a-quarter percent interest. Know what the government is about to make it now? Six-and-a-half. And you never hear a word about it. Lucky you don't live in Maryland."

How come?

"The big electric utility is about to boost the rates for juice by 72 percent, so re-charging your electric car will be something like buying gas. Oh, I forgot, the carmakers dumped most all electric cars when they threatened to become popular. But Maryland's Governor Ehrlich has stepped in and made a deal with Baltimore Gas and Electric."

Backed 'em off?

"Not exactly. Ehrlich made a deal. They get their 72 percent but not all at once; they phase it in over 18 months. And guess what?"

I'm beyond guessing.

"To get the phase-in deal, the customer has gotta pay a surcharge of $15 a month for the next two years to keep the hammer from falling all at once. The Governor had a phrase for it when he revealed the deal."

Can the phrase be repeated out loud?

"You'd think not, but here it is: 'Our No. 1 priority has been working Marylanders, people who literally could not afford the 72 percent increase overnight.'"

You jest.

"Your Uncle Pundit does not joke about a utility bill going up 72 percent, all at once or over 18 months with 15 bucks a month for the delaying privilege. But the best part, the part that a Tony Snow or an Ari Fleischer would have shuddered at, and crossed out, is the beginning, the part where Ehrlich says his 'No. 1 priority is working Marylanders..' A lot of 'em take that working part to be a verb."

I get it: "working" as in working them over.

"Maryland, you know, is unique among all the states. The only one with a Governor's Suite in the state pen."

You're joking.

"Well, maybe I was working -- a bit too hard."

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About the Author

Reid Collins is a former CBS and CNN news correspondent.