I received two forwards today. While the first was of the run-of-the-mill ‘if you don’t send this to ten people in the next 1.4 seconds, you will die in a wheat-threshing accident’ variety, the second made me stop and think for a moment.

You’ve probably received this one: Apparently to stanch the flow of blood from the gaping wound that is your wallet after a fill-up at the gas pump, we can simply stop purchasing gasoline from the two largest conglomerates, Exxon and Mobil. The message advocated the supposedly simple act of purchasing gas from alternative sources, forcing those major conglomerates to drop prices.

Full disclosure before I get started: I don’t own a car. I (by choice) rely on public transit. The price of gasoline affects me much more peripherally than most.

Economic axiom in support of said e-mail
Simple supply-and-demand would dictate that as demand for one company’s product dropped sharply, that company would need to drop prices in order to sustain a certain level of purchase from its customers.

Say there are two gas stations which are identical - save the fact that one is an Exxon station and the other is Joe’s Fill ‘Er Up and Go - on opposite sides of the street. If on a given day these two stations typically split customers 50/50, and suddenly Joe’s was taking customers 90/10, Exxon would drop its prices below those of Joe’s to create a vacuum in the demand, driving business back to its own station.

Common sense in opposition to said e-mail
The only problem is that gas is a fungible commodity, in the sense that there’s only a certain amount supplied to your city’s stations, and that amount supplied is, for all intents, the same as the stuff supplied to any given station’s competitors. Thus, once Joe’s ran out of gas, it would purchase fuel from its competition, either through wholesale channels or from the Exxon station itself, in order to keep pace with the sudden demand.

The supply chain of gasoline isn’t that wide, and must go through certain large conglomerates to make its way to the United States - as this country is based, nearly entirely, on foreign oil. Those large shipping corporations would either a) be owned, wholly or in part, by large gasoline-vending corporations such as Exxon or Mobil, or b) would most likely show favoritism to large-scale clients, such as Exxon or Mobil, over a local joint like Joe’s.

Ruminations on the scope of said e-mail
I think this forward hit home mostly due to the fact that barrels of crude have reached record prices not once, but twice, this week. As I write this, the price of a premium gallon in Chicago has hit a mind-blowing $3.89 a gallon for premium. And, like I disclosed, I don’t even have a car.

Bring on the ’70s-style stagflation.

Disclosure number two: Then again, I don’t have a degree in economics and I think I slept through most of microecon in college. Feel free to tell me I’m wrong.

</rant>

Song of the moment: ‘Fahr’n,’ Absolute Beginner. I was turned on to Absolute Beginner years ago by a friend who lived in Germany - and now has a German wife - but these guys are freakin’ funky. I have literally no idea what they’re saying, since apparently it’s near-impossible to rap in German. The words are just too long. So they chop them up, use slang and use this strange nasal delivery that wouldn’t work were I able to understand the lyrics.

Do yourself a favor and check out the album Bambule (Remixed). Apparently it’s much better than the non-remixed version.