Suppose you need to consume fuel and there are not alternative products available. You need fuel.
Imagine that there are a few producers- let’s call them OPEP. They collide their prices in order to maximize their profits.
There is somebody else in the mood who knows that you are inflexible about energy. This “beast” seeks revenues desperately and, unfortunately, has the authority to tax you. First, it invents something called compensation for infrastructures. It works, so it decides to more pressure on you, this time health deserves it. (hey, I completely agree with earmarked taxes).
Quite easy one can see that if the beast turns into a princess and reduces taxes because prices are rising and doesn’t want to feel guilty, the producers, who are profit-maximizing, will take their space. That’s explained in all basic economics manuals. Hadn’t Sarkozy’s advisers taken a look at them?
What’s going on with energy prices? As Sala-i-Martí said tonight in “La nit al dia” the cause is not the decrease of supply caused by Iraq’s war as Stiglitz pointed out this morning in Girona, the root is the higher demand of the States and Europe. We have not learnt how to be less dependent, at least allowing us to have a flexible demand. Now may be the occasion to end up with this crazy submission. As Mariano Marzo said few years ago "we are not the technological generation, we are the fuel one".
There are protests everywhere... but this is just the first scene.
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In addition, the US hasn't learnt to drill its own oil. We're sitting in a pool of oil here, and the environmentalist laws are the reason why we haven't built a new refinery in the last 30 years. The crazy submission is the one to environmentalist regulation.
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