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Rising gasoline prices: That old black magic

February 11, 2013|By Paul Whitefield
  • In October, gasoline prices rose sharply in California. It looks like they're headed higher again, or at least that's what investors are betting.
In October, gasoline prices rose sharply in California. It looks like they're… (Gary Kazanjian / Associated…)

Went to a magic show Sunday, called, appropriately enough, “Smoke and Mirrors.” Watched the magician pull a rabbit out of his hat and everything. (OK, it was a bird, but who’s counting?)

You know it’s all an illusion -- trickery, sleight of hand, misdirection -- but you laugh and are amazed anyway.  Great fun.

Came to work Monday and read about a different magic show. It’s called gas prices, though it could just as easily be called smoke and mirrors.

Seems that gasoline prices are at record highs for this time of year, both nationally and in California.

And why?

Ah, welcome to the world of illusion, to sleight of hand, to misdirection -- and although you may be amazed, you probably won’t laugh.

As my colleague Ronald D. White wrote Monday: “Hedge funds, commodity pools and other high-roller investors have thrown close to $12.5 billion into a collective bet that gasoline prices will rise.”

See, it's magic: Poof, there went more of your paycheck!

Isn’t it nice to know, though, that folks who drive Ferraris and fly first class or on private jets are profiting from those of us who drive to work? (And as long as I’m whining, why do I have the sneaking suspicion that, at least here in Los Angeles, some of those same folks are the ones who gladly pay extra to escape the rest of us stuck in rush-hour traffic by using our new freeway toll lanes? You know, the freeways built with our tax dollars?)

Heck, for all I know, Pope Benedict XVI decided to resign because he couldn't afford gas for the Popemobile!

Now, I can hear what you’re thinking (oooh, magic again!) -- that I’m a Marxist/Leninist/communist/liberal who hates capitalism. That I don’t understand the free market, and don’t agree that what’s good for wealthy hedge funds and investors is good for America.

Also that I seem to have a serious case of wealth envy, especially regarding air travel, Ferraris and toll lanes.

But that’s not it. (OK, maybe that latter stuff is it. Oh, and yes, I am a liberal, sort of. When it suits me. Like Al Gore, I guess.)

Mostly, though, I understand that gasoline prices keep going up because there’s less oil in the world, it’s more expensive to find and produce, and more people want more of it. I get that.

And I can live with that.

But really, what good does it do the average guy to have a few rich investors treating the commodities market like it’s a Vegas casino? How exactly does that improve things for us working stiffs?

Frankly, if I want behind-the-scenes trickery, I'll go to a magic show, not a Shell station.


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