Gasoline topped $4.00 a gallon on March 30 – up 30% in 30 days.
The fairy-tale that economists tell would have you believe that this price is set by the balance of supply-and-demand in the present moment – the “spot price.” But the domestic supply of gasoline has not changed, and inventories are abundant. Demand (consumption) has been rock-steady. There are no shortages, no lines at the gas station. Unlike the 1970’s, when the U.S. imported energy, today we produce comfortably more than we consume, and export the rest. In fact, the U.S. is the largest exporter of gasoline in the world, which is a cushion against price shocks, or should be.
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