gas prices

I drove over 500 miles yesterday, so I had to fill up my bug twice, at $3.12 and 3.10 a gallon.

Why has the price of gas suddenly spiked? Because the price of crude oil is up. Crude was trading for around $67.50 a barrel at the end of last July, but now it's suddenly at $85. What gives? It's certainly not because oil is in short supply; in fact, the markets are saturated right now because demand has fallen off due to the economic collapse.

McClatchy News Service has it right: "Blame Wall Street."

Experts attribute much of the recent rise in prices to flows of speculative money into oil markets. These bets are fueled by investor expectations that the U.S. and global economies are poised to return to growth and thus spark increased use of oil. Strong growth in China supports the narrative of rising oil consumption and tightening supplies.

"The thinking goes that rising stock (market) prices implies expanding business activity, implies growing energy demand, implies rising oil prices. I think you can make that case, but it's awfully weak," said Michael Fitzpatrick , vice president-energy for MF Global , a financial firm that brokers the sale of contracts for future delivery of oil.

While there are signs of U.S. economic recovery, such as a slight uptick in consumption and strong manufacturing data, there are plenty of ho-hum signs too, including dismal construction spending and continued high unemployment.

"I just don't think if you look across the entire spectrum of the macro-economy that it creates a picture of a growing body of incontrovertible evidence that there is a strong, sustainable recovery. I just don't see it," Fitzpatrick said. "I think it should be closer to the range we were seeing in late summer and early fall, $67 to $72 " a barrel.

Looking at this from an environmental rather than a financial standpoint, there are plenty of reasons why the prices of oil and gasoline should be high, and go even higher. The biggest one is that we need to drive less, and reconfigure our communities, our entire society really, to a scale that encourages walking and using mass transit rather than driving.

To further that goal, oil needs to be at $85 or $90 a barrel, but a third of that should be taxes which would in turn be applied to building and improving urban and interurban mass transit. Instead, we're paying a tax of a sort, but not to any government. The surplus goes to greedhead traders so they can buy more McMansions, Cadillac Escalades, and send their kids to private acaemies so the little ones can learn how to lord it over their fellow citizens.

Gas and oil prices are about where they should be, and those price levels generate huge profits. But those profits are disbursed for the betterment of an economic and political elite, rather than being applied to benefit the people at large. In a nutshell, that's the difference between backwardness and progressivism, and it also tells you who runs government. Hint: it ain't "the socialists."