It seems we, as a nation, are awash in moronic economic theories put into practice by overly “educated” politicians who don’t even know how to change a flat tire. The best knowledge is weaned from experience shaped by the practical world and not the dope-smoking nonsense of the ivory tower.
Various politicians have their little sissy panties in a wad over high gas prices. They’re screaming that oil companies are gouging the public. “We need to regulate gas prices!” Remember the world of high gas prices and shortages before President Reagan deregulated the industry in 1981? I assume our elite colleges don’t teach historical facts that illustrate the wonders of the free market.
I’ve owned gas stations, and there is no more competitive industry in the world than the retail gas business. If I dropped my prices at the pump to outperform my competitors, they would immediately match my price. In one rural area, retailers 20 miles away would match my price. At any one time, the oil and gas business has 270 billion gallons of oil and gas in underground storage or floating on the sea. If there is even a hint prices will soon rise, retail pricing will rise because all those 270 billion gallons must be replaced. Wholesalers and retailers make more money when prices rise because the margin on the inventory they already have increases, and when prices fall, their margins decrease, sometimes to where they lose money. All retailers want to keep their prices high when wholesale prices fall, and for a short while they do, but then they fall because retailers beat each other up vying for market share. Instead of bitching about high gas prices, politicians should study the oil business and its remarkable efficiencies and learn to quit interfering in the free market.
Oil is pumped out of the ground 7,000 miles away. It is moved by barge to Louisiana, where it is refined into gasoline. Additives are added. Then dozens of various grades of gasoline flow 1,000 miles through a pipeline to Virginia. The Feds and the state of Virginia tack on 60 cents in taxes to each gallon (in practice, this increases the per-gallon cost by more than 60 cents). A wholesaler picks up the gas and delivers it to the retailer, sometimes driving 60 miles to do so. By the time this 7,000-mile journey ends in Richmond, a gallon of gas at the pump often costs me less than a liter of bottled water, and that liter of Evian can’t make a 4,000 lb. vehicle loaded with 4 passengers go 40 miles down the road at 70 miles an hour. A retailer might make 3 or 4 cents per gallon, but the government always makes 60 cents per gallon, even when the retailer loses money. The last thing this remarkably efficient system needs is government price controls, a recipe for shortages and stagnant innovation.
Have you heard about Kathy Hochul and Zohran Mamdani’s new love child? A surcharge on all “non-primary” residences in New York City assessed over $5 million. This is on top of NYC’s mansion tax of 1% to 3.9%. When a politician merely mentions taxing or regulating something new, that asset or activity immediately drops in value, even if the new tax never materializes. Neither one of these two has ever had a private-sector job, much less run a business. By publicly announcing her intentions, Kathy Hochul drastically devalued the very tax base she hopes to tax. Their logic is retarded: “the people who pay the most in taxes and use practically no municipal services should be penalized in favor of those who pay no taxes and consume 50 times the services they pay for”. This, combined with Mamdani’s Citywide Racial Equity Plan, which proposes an estate tax on homes over $750,000 “in mostly white neighborhoods,” is a level of insanity that even certified insane people recognize as insane. Wonder what that humming sound is you here? Moving trucks headed south on I-95.
Do I need to talk about Mandami’s plan for city-owned grocery stores, another area where I have some real-world experience? Suffice it to say these stores will be a colossal waste of money. Food will spoil; employees will be lazy, rude, entitled, and overpaid. The stores will be dirty, there will be a tremendous amount of fraud and graft, shoplifters will have carte blanche to steal at will, the shelves will be empty, and of course they will attract thugs, winos, and homeless people. Expect a few shootings. Mandami thinks he can just wave a magic wand. Poof. A grocery store appears, but this is a fantasy delusion that only a Bowdoin College Africana major and ex-rapper can possibly believe. Pass the bong an take a nice long toke.
In Virginia, our new Marxist Karen of a governor and fellow People’s Deputies in the General Assembly have placed new burdens on landlords, ostensibly to help renters and make their lives more affordable. Of course, all these feel-good laws do is socialize irresponsible tenant behavior while penalizing good tenant behavior. There is now an Eviction Diversion Program (it sounds very Soviet Union-like), where the terms of a lease are ignored and a judge can put a renter on a repayment plan against the wishes of the landlord. No landlord wants to evict a tenant. Just this week, I got a call from a tenant who couldn’t pay his rent. We worked out a plan. But there are times when eviction is necessary.
I can tell you with absolute certainty that all this Eviction Diversion nonsense is going to do is get tenants further behind in their rent and make rents rise for responsible tenants. It is an absolute fact of life that people spend money on things they shouldn’t at the expense of things they should. Forcing fiscal discipline on renters is a good thing; allowing them to continue their bad habits helps no one. Fueling them with entitlement allows them to take advantage of the system, and they most certainly will. Abigail Spanberger loving Karens have a hard time understanding these realities.
Finally, we have Virginia’s new $15/hour minimum wage, another area where I’ve had personal experience, as I once earned minimum wage and later owned a chain of restaurants with several hundred employees. As an ex-owner, I know that employers will fire employees; others will have their hours cut. Many small businesses will be forced to close. Retail prices of goods and services produced will rise affecting the low income the most. Sadly, long-time loyal workers who have worked themselves up to a $15/hr. wage will make the same wage as a 16-year-old new hire who doesn’t even know how to push a broom. Many young people will never be hired and learn the practical, real-world skills that could never be learned in a university classroom. This is what upsets me the most.
My most valuable education did not occur in a university classroom. It was working in a sawmill at Wood Preservers, Inc. in Warsaw, Virginia. I loved it. Stacking lumber in the hot Virginia sun built muscles and character. I wanted recognition for my production and my hustle and to work all the overtime I could. Mr. Wright recognized my efforts, and I got raise after raise. At 16, he made me a foreman overseeing 40-year-old men. Nothing is more empowering for a teenager than to be appreciated and respected by his elders, people he looks up to. One learns about differing types of people. Some are lazy, shiftless, and worthless, while others are the absolute salt of the earth. One learns why some things work and others don’t. Why merit breeds success. Most importantly, these experiences make it impossible for university professors to fill one’s head with agitprop nonsense, because unlike them, you’ve tasted the real world. The cynic in me thinks this might be the reason the “intelligentsia” passes minimum wage laws.
“For the things we have to learn before we can do them, we learn by doing them.” Aristotle.
