Gas Prices vs. Luxury Spending?

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Audrey Levins

MGF, Master Grumble Framer
Joined
Apr 9, 2001
Posts
545
Loc
San Antonio, TX
Hey Grumblers!

I've been watching gas prices skyrocket--as I'm sure you all have--and while they are "only" at a $1.45 for unleaded in Texas, a month or so ago it was $1.19--and it's not even summer yet. *yikes!* And half the vehicles in the country are now gas-guzzling SUV's....which of course doesn't help.

I'm curious as to what you guys think this kind of basic necessity price hike is going to do to peoples' "luxury spending" budgets; I know in northern states it's up to $2.50 a gallon, and that CAN'T be good for "non necessity" spending.
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While this may not affect the "upper eschalon" customer as much as it will affect middle-class America, it seems to me that it can't be good for economic morale, not to mention potentially cutting out the bottom of the market for things like framing.... (In Texas, in particular, I see a LOT of those damn SUV's, and it makes me furious. LOL Mostly driven by housewives with one or two kids....)

Our business has dropped somewhat, and while my hours are good at the moment, I'm afraid much more of a slow-down and I'm going to have to look elsewhere for a job; I can't afford less than 30 hours a week.
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Just curious as to your take on all this....

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I don't care what color your sofa is.
 
Not too much grumbling about the price of gasoline please.
Down here in the Land of Oz its called 'petrol' and in my town its costs very close to A$1 per litre. I think there are approximately 4 litres to your gallon so how would you like to have to pay $4 per gallon?
I don't know what happens up there in the Land of The Dollar Bill, but when the price of oil goes up, our petrol prices go up down here. When the price of a barrel of oil goes down, the price of petrol goes UP again. Oil recently went down from $36 per barrel to $28 per barrel and petrol has gone up again.
I guess I am too bloody dumb to understand how that works!
The expression 'outlaws without guns' comes to mind!
 
Osgood, you beat me to it -just out of idle curiosity whay is L.P.G. worth down there - up here we are on 74.9c per litre . On the other hand petrol is about 95c. Good fun eh and to think someone voted for the -------- Hooroo - Alan

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Old age comes to everyone - Immaturity can last forever
 
I can assure you that people who can afford custom framing are not concerned about gas prices. I have paid $1.81-$1.84 here in North Texas for the past 3 weeks, heck, I pay more that that for bottled water.
 
Grrrr!! Once again, the public falls for the old saw that 'with more people traveling, gas becomes shorter, thus, prices go up.' Listen, I was born at night, but not last night!! I survived thru the 'shortage' in '74~'75. Oh, the oil companies claimed they were out of gas!!!

Yep, they all went to bed one night, thinking they had all the gas they needed. Woke up the next morning and, My God!! There's no gas left!!

We live about 10 miles from a Colonial Pipeline tank farm, and they were full!! They had orders to turn away tanker trucks. There were oil tankers anchored off-shore at Wilmington, NC, with orders to stay there until notified to unload. So...we all sat in gas lines, did the quota thing, and, when the price went from $0.59/gallon to $1.59, Lo and Behold!! We were swimming in gas.

It was the most dastardly thing ever foisted on the public. And now, every spring, they start getting us ready for price gouging by telling us that with the 'vacation travellers, gas will be in short supply, hence, price increases'. In my v-e-r-y humble opinion, it's a scam. They know when demand increases, they can gouge us at the pumps and get away with it.

OK, I'm reasonably calm now...I'll climb off my soapbox. I really don't think it makes any difference whether you drive a '62 Volkswagen or an M1 Abrams tank. If the oil companies want to dip into our pockets, they'll use every excuse at their disposal to do so.

As far as affecting our customers, I haven't seen any signs of that. This has been a slow week, but it's because all the schools are on spring break around here.

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I'm not totally worthless. I can always be used as a bad example... Woodchuck
 
Hello

As much as I try, I simply cant understand the uproar about this fuel $ increase. Yep, I drive an SUV, a 2000 Jeep Grand Cherokee. It gets about 20 miles to the gallon. How about all you NON-SUV folks? I don't think 20 is so bad and I certainly wouldn't consider it gas guzzling.

I don't even know what the per gallon fuel cost is here - probably about $1.70. I could care less if it goes up 10 cents a gallon. My jeep probably holds about 15 gallons, what does a 10 cent/gallon increase mean... $1.50??? BIG DEAL.

Although SUVs are quite popular, their % of the TOTAL vehicle demographic is quite small. People are quick to forget that a major % of the vehicles on the roads today are FREIGHT. Consider Fed Ex, UPS, M.S. Carriers etc. Imagine the amount of fuel that is consumed to keep these trucks going from coast to coast. So take it easy on the SUV's, you're targeting the wrong group.

What is it about SUV's that makes people so mad? They are not expensive. I lease mine for about 300 bucks a month. I don't think that's extravagant. Its very versatile and allows me to deliver framed pictures for my customers and conversely allows moms to deliver theirs and other moms kids to school.

As far as affecting my business, I doubt it.
$1.50-$2.00 a week is nothing compared to real concerns like what has happened with peoples stock/mutual fund portfolios.
 
I believe there is a lot more to consumer leariness right now than just the price of gas. The economy on a whole is a little shaky right now.

As for business, I feel like it has affected ours. We wre basically still getting plenty of people with money who want their work done and don't care about price, but our middle of the road "How much will it cost to frame this" customers are definately fewer and farther between.

Framing is a luxury--I don't think I could afford it right now!

Things will surely look up. And could be, I'm all wrong. It is so hard to say exactly why your business is up or down at any one time. Really just guessing.

Anyways, enjoy the spring!
 
They say it's to gouge the travelors but it's really to eliminate the small farmers and some of them aren't really small. BB framers are nothing compared to 1 or 2 ag growers etc.
 
Tadporter, I'm with you. I drive an SUV too. It's perfect for deliveries. Unfortunately, my Oldsmobile Bravada doesn't get the best gas mileage, but it's what I wanted and I don't care who it pisses off. I'm not a person that frets over gas prices at the pump. My customers aren't people who fret over gas prices either or at least I've never heard anyone use that as a reason why they cannot afford custom framing.

I will say that I'm getting more and more customers that will bring in several items to be framed and ask me to do one piece each month rather than all of them at one time. I never ask why. It's none of my business unless that opt to share their financial situation with me. I'm just happy that they are bringing the work to me!
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How cheap do you want it to look?
 
It's a bigger problem than just what it will cost you to drive your SUV or family car. For some months now, trucking companies have been charging "fuel surcharges", especially on heavy goods like glass that every frame shop uses. How will we feel when the price of materials goes up when these costs are passed on? And if I may add a personal opinion, it doesn't help that we have two men in the White House with much vested interest in the oil industry.
 
Hmmmmm....nice to see everyone is feeling confident.
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I think my concern stems more from the overall "straw that broke the camel's back" theory than the particular problem of the price of gas. With the stock market instability, the blackouts in California, the internet crashes and layoffs, the beef/leather crisis, etc., and the fact that we have just come through a VERY harsh and expensive winter, only to confront skyrocketing gas prices when it's barely spring.....all this leads me to think that something wicked this way comes....*wink* And gas prices affect every business that ships anything, which includes just about every business except the internet...which is sucking without any help already...*grin*

So that's my overall concern; the gas prices are just one MORE thing that could depress the market even further.

And Charles--whether or not the gas crisis is bogus or not doesn't really matter at the end of the day, because the prices still go up...LOL...and for the record, I drive a Chevy Corsica sedan that gets excellent gas mileage.
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I don't have any problems with people who buy SUV's and use them with the purpose of hauling/carrying/USING them, but I know/see a lot of people who have no other reason for purchasing them other than that they are trendy and popular. And yes, that does offend me; that's a very large, pointless waste of resources on a national level.

And on a final note--Woody, the last time we had a "gas crisis" there was a Democrat in the White House....and anyway I didn't see Bush Sr. prodding the gas prices eight years ago.

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I don't care what color your sofa is.
 
I am afraid that some of us don't read the situation clearly. The REAL PROBLEM is not how much gas prices went up and if we can survive those extra few dollars/month x family but, rather, why up and not down? Why budge at all? The up direction spells troubles down the road. More expensive energy is going to compound itself in more expensive transportation, materials, labor, rent, everything. It has a name: inflation. By analogy, if your body temperature keeps growing bit by bit you don't take comfort in having air conditioners and enough income to pay for them running on, do you?
This reminds me of BBs and some framers' reaction to that threat. There too, the real problem is that BBs exist and take a growing share of the framing market, unlike ten or fifteen years ago, not how far they are from any one of us, how low, mid or high end they get, or how poorly trained and mannered their framing service people currently are.
Just for the record, I agree with Audrey that many Americans are unknowingly wasting precious resources: gas, water, electric power, paper, so on and on. If 20Mi/gal. sounds like a decent consumption for a car, I am telling you that personal cars in Europe burn less than 2 gal/100 Km (less than 2 gallons per 67 Mi). Car's gas efficiency is a big issue over there. Why? Because gas price is more like $4/gal. Also, at this price, car occupancy becomes an issue, for public transportation is omnipresent and very economic.
To sum it, I believe that custom framers must fear recessions like everybody else, rich or poor alike.
 
Audrey, I didn't mean to imply that, because the 'oil crisis' is contrived, it doesn't affect us all. It gripes my *** when the prices go up, with demand, and then go down. Their idea: More people traveling, more need for gas. More need for gas, people will pay more for it. What I meant was, right now, and back in '75, there was no shortage. I don't defend what anybody drives, or why.

IMHO, if everyone in the US drove cars that got 100 mpg, gas would go up even more. Oil co formula for that scenario: Less gas sold, keep profits same, raise prices. I'm not a world traveller, but I think that most of the European oil co's are BP, Shell, Texaco, etc-owned. Same folks that own it here. Europe is just a short trip from the OPEC countries. Costs less to transport it, can't cost any more to refine it, same process. Not as far from refineries to consumer, as it is here. So, why is gas expensive in Europe? Because it can be.

Will higher gas prices spiral into a 'price-hike tornado' and affect us all? Sure!! If the 'summer' increases stayed with us. They'll go back down. Never as low as they were, but they'll go down. The name of the game is 'buy cheap, sell dear'.

Will it cause a drop-off in custom framing? Personally, I don't think it will, in any significant amount. Customers whose budgets are tight enough that higher gas prices curtail their desire to have framing done are in the fringe, I think. I'm being redundant here, but it has not affected our business yet. We haven't had any customers ask us to delay their work because gas prices are going up.

And if they did? I have done many things in my life. I can wire houses and commercial buildings. I am a fair mechanic. I can run a farm, any size. I can do telephone work, and I'm not too old, yet, to learn something else. I love framing, I love working with Janet, and I love being retired. But, if the framing business fell through, we both have enough skills to make a living. We wouldn't want to, but we could find something else to do.

Many years ago, and the NC folks on here will bear me out, CP&L decided they were going to build a nuke plant, to save us money over fossil fuel-powered power generation. They got all the permits, put up with the protesters, and started their plant. The same month, our power bills stated that they were increasing to offest the cost of the nuke plant. They were making us pay for the plant up front. So, we anted-up, hoping the prices would go back down when the nuke plant came on line. It came on, prices stayed up. Couple of months later, nuke plant went down, prices increased to pay for the cost of switching back to fossil fuel. Plant went back up, so did prices. Prices stayed up so we could pay for 'fixing' the nuke plant. CP&L wasn't shy about it. They told us all what they were doing. Alternative? Build your own generator. Didn't work in California. Won't work here.

There are many threats besides gas guzzling vehicles. People. More and more of them. Everyday. More people are the greatest drain on our precious natural resources. Farmers can feed us, and a good portion of the world. They don't make the really big bucks. The middle men, and outfits like ADM are killing us with food prices. A principle of capitalism is that the higher the demand, the more you can charge, and get away with it.

People will say, "We can change that! This is a democracy! Go out and vote!!" Go ahead. It won't change. We'll hear rhetoric about how this politician or that one has the best idea. The end result; things will still cost more. It's all about the Golden Rule: The man with the gold, makes the rules.

PS: I'm not a mopey, grumpy person. Actually, 90% of the time, I'm happy as a pig in mud. Really. I am, however, a realist, and a pragmatist. I don't think we can 'buy the world a Coke and teach it how to sing' and everything will be OK. The only way to survive is to hang on, wait for change, not too optimistically, and, if change for-the-better doesn't come, change ourselves to put us in a more advantageous situation.

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I'm not totally worthless. I can always be used as a bad example... Woodchuck

[This message has been edited by CharlesL (edited April 21, 2001).]
 
Charles-Well said. This is one of the many things in life we feel that we can control, but can't. Your Coke analogy is perfect; my favorite is "the standing around the campfire singing Cumbaya, holding hands" theory. I guess if it makes you feel empowered, good for you.My suggestion: Be smart enough to position yourself to weather the storm, and be able to react fast enough to correct your course. There really are things, unfortunately, that are beyond our control.
 
I like it, Bob... of course with all that singing then global warming would get out of control and we'd have to put a lid on Kumbaya and campfires.

Here's a few unpopular facts, folks:

SUV's and oil companies are popular targets, but they're lightning rods. As in the case of real lightning rods, they are easy targets but rarely the actual causes of what are very complex problems. They mostly serve their purposes by being diversionary targets, actually.. which means that they divert people from finding real solutions because they all of a sudden have to think and *shudder* take some responsibility.

Fuel costs in Europe/Australasia (yes, that's the correct spelling for the region which I have in mind) higher than the US?

Sorry, no magic or cultural superiority issues here. Break down the costs: exploration, production, transportation, refining (not including the costs of bribing governments at every level in most countries in order to operate, but that's another issue) etc etc . They are, given certain geographic and labor cost differences, fairly consistent. The difference is taxes. And taxes go to support cradle-to-grave welfare states or corrupt leaders. Usually both.

If someone here in the US really wants that, I hate to seem xenophobic but you can move to any country and get it.. but please, let's not do it here. I noted on another post that politicians already get way too much of my money.

Charles is right; there's just lots of people and demand, and supply has been artifically regulated out of existence by special interests.

Here's another point: if oil companies were consistently making such huge amounts of unfair (or, as the lightning rod term is: gouged) profits, don't you think that they would be the most popular investments in the stock market? Why is it, then, that over time, oil companies are consistently worse investments than any single manufacturing, utility or service group? Last I checked, the ROI average for majors was less than 5%. Yes, you can ride the ups and downs, but very few of us have the stomach for that roller-coaster ride. Think you want to trade in your CD's for that nice return? Hmmmmm don't like this.. could have to be forced to think about it.

Ok, I'll shut up with one last unpopular factoid: We're going to ride the fossil fuel horse all the way until it's completely dead. And then we won't give up until we've drug it a few miles. That won't happen for a long time, and alternative technologies don't become economic until the price of oil is consistently above $50/bbl. We're a long ways from that, too, soooooo....

Let's figure out how to best manage it and wisely use it and quit blaming everybody else. Look in the damn mirror.
 
I forgot something.

Charles, while I congratulated you for being right about one thing, you were wrong about another.

Oil in the ground (or in a tanker, for that matter) is not the equivalent of gasoline into your tank. There are lots of potential reasons for this. Just to list a few:

A relatively small amount of a barrel of oil is refined into gasoline.

Depending upon the gravity of the crude, the fraction which can be refined into gasoline might make the whole effort a waste of energy.

Refineries are generally built with a certain type of oil visualized as its source crude; when supplies are interrupted or changed, the efficiency of the system goes way down.

A common bottleneck is the delivery system, even if the other parts are balanced. The gas delivery problem during this last winter was a classic example. Pipelines don't spring out there like popping a slinky, and regulators have basically made it uneconomic to build new pipelines.

Brings us to NIMBY: Not In My Back Yard.
Usually the biggest problem of all.

The above problems, which eventually lead to no new oil field discoveries, refineries, tankers or pipelines (or power plants, of course), leave the society with aging equipment which tends to blow up and kill everybody around. You see a quick news blurb if enough people died.

There are lots of others, and of course, I barely touched the political aspects. Here's the story boiled down to its simplest essence, though, and I'll go away about this subject.

Oil, in this age, is now a commodity. It's the most-traded commodity in the world.

Q: Who controls the price of a commodity? A: Governments and traders.

Q: What does the rest of this immense delivery system now do?
A: Control its costs within a continually shifting revenue base and manage risks.

ok, I know that's enough about this stuff.

By the way, for you trivia buffs, the second most traded commodity in the world is coffee. That surprised me; I would have said wheat or rice.
 
I just got this in my e-mail from a non-grumbler so if you are really torked, run with it. We don't have any local stations under the mobile name but I'd bet most of it still comes through their pipeline!

Subject: Gas Gouging

GASOLINE This makes more sense than the don't buy gas on a certain day
routine that was going around in April or May of last year to try to achieve
lowering Gasoline Prices! Whoever started this has a good point. By now
you're probably thinking gasoline priced at about $1.49 is cheap. Me too! As
it is now $1.58 for regular unleaded.

Now that the oil companies and the OPEC
nations have conditioned us to think that the cost of a gallon of gas is
CHEAP at less than $1.50, we need to try an aggressive response. With the
price of gasoline going up more each day, we consumers need to take action.
The only way we are going to see the price of gas come down is if we don't
buy it. But, that's not really a practical option since we all have come to
rely on our cars. But we CAN have an impact on gas prices if we all act
together.

Here's the idea : For the rest of this year,.. DON"T purchase
gasoline from the two biggest companies (which now are one), EXXON and MOBIL.
If they are not selling, they should be inclined to reduce their prices - and
if they reduce their prices the other companies will too. But to have an
impact, we need to reach literally millions of users. But it IS...doable! I
am sending this note to 42 people. If each of you send it to at least 10 more
...and those 10 send it to at least 10 more ... and so on, by the time the
message reaches the sixth iteration, we will have reached over one million
consumers. Acting together we can make a difference.

If this makes sense to
you, please pass this message on. PLEASE HOLD OUT UNTIL THEY LOWER THEIR
PRICES TO $1.28 - $1.29 AND KEEP THEM DOWN. THIS CAN REALLY WORK. If you're
not outraged, you're not paying attention!



[This message has been edited by JPete (edited April 23, 2001).]
 
As for me, I'm a pragmatist. (Actually a "Conservative Libertarian").

So last December, the Day After X-Mas, I hunkered down for the impending recession by buying everyone in my shop a Coke while singing "Kumbaya", then I promptly sat my rear-end down in front of my computer, logged on to E-Trade and shorted the Holy Bejeezes out of Cisco, Lucent and IBM.

(Hey two-out-of-three-ain't bad!)

Worked for me.

[This message has been edited by MAX (edited April 24, 2001).]
 
That's a chain letter which would actually work, except for when one considers the electrical energy required to forward the thing all over, it's probably burning more fuel than what was saved by not buying gas.

The point which is actually valid is that individual conservation is one of the real keys. I guess $1.28 is this particular person's threshold irritant point, but for the life of me I don't know what's magic about that number. Personally I'd like to be paying a quarter a gallon again, but there will be a day very soon when I know I'll look fondly back at the good ol' $2/gallon days!

This sounds like another one of those 'kill Exxon' things that float around from time to time; their main crime is being the biggest (by most counts), so again it's the old lightning rod attack. Sounds political... lots of heat but not much light.

I agree with you, Max, as I would classify myself as a conservative Libertarian, if I had to put a tag on myself. I have to comment that being a conservative libertarian and a pragmatist sounds like there's always this inner clash which probably ends with a fatalistic sigh; at least that's what seems to happen to me all the time! Not that I can admit to being much of a pragmatist.... too much idealism always boiling up and clogging up the thought paths.
 
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