What is the one subject in high school and college that students take the least? What is the one subject that would give real meaning and understanding to day-to-day events and circumstance that affect every family? No…not political science, not algebra, not biology, not literature, its economics, a subjects most teachers and students avoid like the plague, a fact which is clearly evident in society’s rush to socialism. Most recently America’s economic ignorance has been exposed in the howls over the price of oil.
Who’s to blame for sky rocketing oil prices? The answer to that question depends on the respondent’s economic proficiency. Those with a rudimentary understanding of Economics 101 can attest to the fact that the rise in oil prices is an inevitable byproduct of fluctuations in supply in demand. As demand increases price will inevitably increase, especially with regard to a commodity that cannot be produced in excessive quantities given limitations in production and refining capacity, not to mention the volatility in many oil rich regions, like the Middle East.
Today, more and more Americans are driving and many of these cars are inefficient in terms of fuel economy, particularly large SUVs. This coupled with the fact that both China and India are in the midst of an economic boom, means greater demand for oil.
Oils supplies, however, have not been able to keep up with demand, hurricanes, a lack of domestic refining capacity, environmental regulation and so on have led to constraints on that supply, applying further pressure to price. To the uneducated mind, of which there are many in this country, an increase in price simply means the oil companies are looking to increase their profits, in reality the profit margins (proportion of revenue and costs) are miniscule when compared to other industries.
http://money.cnn.com/2006/04/18/news/economy/gas_prices_ethanol/index.htm?cnn=yes
