Friday, September 09, 2005

Democrat Mass Transit Plan Seems to be Working

If the gas caps force prices any higher, everybody will be riding the bus.


At September 09, 2005 2:32 PM, Blogger Mike Hu said...

Of course, once we factor in the infamous "Hawaii cost-of living adjustment," we never had it so good.

At September 11, 2005 5:44 AM, Blogger Mike Hu said...

Aloha to the urban myths of high-priced oil
Paul Jacob (archive)

Have you heard the rumor yet? Oil companies are destroying fuel — emptying, even, gallons and gallons into thirsty desert sands — so that they can keep prices high at the pump. And make tons more moolah.

A friend heard such a rumor the other day. Maybe you have, too, before hurricane Katrina dominated the news and almost every conversation. Such stories were as common as wet dirt back in the '70s, back when oil prices were not only soaring but supplies at the pump were plummeting. Those were the days when we had to queue up in long lines to pump gasoline into our guzzlers. And while in line we had to talk about something.

Trouble is, there's not a gallon — not even a pint — of truth to these tales.

It makes no sense to destroy your own supplies of oil. Portions of one's own stock can have little effect on price levels, so you have every incentive to sell, sell, sell, not burn, dump, and waste. That goes for even the biggest of oil companies. If some mid-level manager ordered good fuel to be wasted like the rumors said, he'd not merely have been fired, he'd likely have been sued — or charged with theft.

Back in the late '70s, people swore to me that they "knew" a friend of a friend whose uncle's cousin was a low-level flunky of some oil company, and that the refineries — or was it the raw oil merchants? or the gasoline delivery companies? — routinely did such things. He witnessed it. Honest to gosh!

Nonsense. These are urban myths . . . that fill a human need to blame somebody. They feed the conspiratorial view of history. If something bad happens, then a few somebodies must be to blame.

It's too hard for some people to wrap their heads around a few obvious truths. Take the current oil situation. People in business make money off our need for petroleum products year in and year out. No urban myths about that.

But a war comes along, the future becomes uncertain, supplies diminish — and then a hurricane wrecks a few refineries and supply lines, reducing U.S. production to the tune of nearly two million barrels per day — and for some reason a few people find the consequent price rises puzzling. All the sudden, the motives that led to supplying us petroleum products in normal times become suspect in troubling times.

This sort of panicked thought leads, all-too-naturally, to a demand: "We must do something."

And here of course is where a few people do some horribly bad things that make our lives a whole lot worse.

Pandering to the belief that "somehow" oil companies are "taking advantage" and "gouging" us with price increases, politicians hold hearings, and then "take action." What action? One word: regulation. Two words: price controls.

That's what politicians in Hawaii did the other day. They waded out into the desert of idiot economics and said "the water's fine!" And they gave their state price controls on petroleum.

Thinking themselves the greatest of sophisticates, they didn't cap gas prices at the pump, though. They capped the wholesale prices, which they'll renegotiate and fiddle with for a while. They ostensibly knew the harm that consumer price caps would cause. So they focused on the wholesale end.

I'm not an economist, so I should probably leave the economics of this well enough alone. But the whole thing stinks far worse than a vat of Texas Tea. Still, I've read their litany of complaints, and I understand that they blame the refineries. But so what if refineries are making more profits now? Their number has been artificially diminished for decades, what with the stringent environmental regulations placed on their, er, placement. (How about putting an oil refinery in your back yard!) So, a limited supply of refineries suggests to me increased prices for refinement.

But it turns out that I'd be nearly as wrong as the regulators. Actual figures from the industry tell a different story. Robert L. Bradley, Jr., president of the Institute for Energy Research, notes that though crude oil prices have increased above their historic average by a whopping 185 percent, gasoline prices have increased by only 25 percent. Increased efficiency in refining and transportation and marketing have actually decreased the margins for profits off of each barrel of oil. It looks like the increased profits of the oil refineries rest on that old principle of business: volume, volume, volume. Oh, and efficiency, too.

But those are mainland statistics. Are things different back on the distant island of Hawaii? Well, gasoline prices are higher, naturally. It's an outpost, so increased costs of transportation alone should lead to higher prices for consumers. Though the prices appear to be as natural as anything in society, Democratic politicians have been listening to the complainers. (I guess whining is natural, too.) And they've gone and done something. That's the biggest difference so far.

Scott Foster of Advocates for Consumer Rights, one of the groups that pushed the Hawaii oil cap bill, declares that his harebrained notion is "a grand experiment," and that his "hopes are very high." Looking to spread the gospel of regulation, he added, "If this bill works here, there are a lot of other states that are watching it and might do likewise."

It won't work there, of course. The real question is: will other states wait for the evidence to come in, or will they rush to consign us to long gas lines again, to suffer and fume (and breathe fumes) and tell stories that make no sense?

Paul Jacob is Senior Fellow at Americans for Limited Government, a partner organization. His daily Common Sense commentary appears on the Web, and on radio stations across America.

At September 13, 2005 8:19 AM, Blogger Mike Hu said...

Another bright idea up ahead:

Here lies the monorail -- may it rest in pieces


An obituary, in advance of big news to come Thursday:

The monorail died this week following a prolonged illness.

Several attempts were made to revive the project in spite of do-not-resuscitate orders and the best interests of the public.

The monorail leaves behind a board of advisers who knew it was terminally ill but did not call in the spin doctors soon enough.

It is survived by Seattle citizens who know the region needs a viable transit fix but realized this plan wasn't it.

The project is preceded in death by the transit careers of Joel Horn and Tom Weeks: The two former senior officials for the monorail succumbed to lethal arrogance, power tripping and a septic finance proposal based on junk bonds and high interest rates for decades.

Monorail kin ask that condolence cards be sent to:

Dick Falkenbury, an early champion of the monorail whose wild-eyed advocacy fueled the project with populist fire.

Seattle citizens, whose votes narrowly kept alive the monorail idea even when plenty of folks in town suspected it wouldn't pencil.

The flip-flopping editors of The Stranger -- they became the monorail's biggest pompom squad.

The hip alternative weekly got a reality check, and a brief change of heart, when the P-I revealed that a single 14-mile line of the monorail network would cost $11 billion.

Dude, the paper quickly reverted back to its old cheerleading ways.

The Stranger kids believe the monorail is so rad, so cutting edge. Plus, the monorail gives them a chance to stick it to uptight, alarmist adults who talk smack about the importance of, like, fiscal responsibility.

People prayed as Mayor Greg Nickels set a deadline of Thursday, Sept. 15 -- the day when the monorail proposal would emerge from radical surgery in good shape, on its last legs ... or not at all.

Supporters of the monorail would like to thank John Haley, the acting director, who did all he could. Haley had only a matter of weeks to become a miracle worker after monorail officials called on his help.

"I would feel much better if I had more time," Haley said. "It's been intense."

Intense because Haley was brought in when the monorail was fading. Members of the monorail board, feeling hopeless, already were eyeing the exit signs.

Intense because the monorail has lacked a workable finance scheme -- one that will not saddle the public with the burden of long-term debt or expose citizens to wild fluctuations in future interest rates.

The monorail family appreciates Ken Phelps, a consultant for the monorail who resorted to voodoo.

Phelps thought he could shave $4 billion -- poof! -- from the project.

He floated one idea to lease monorail trains rather than buy them in order to save money. But because many public bodies borrow money with tax-exempt debt, buying actually makes more sense.

Desperation breeds desperation.

The only thing that truly could have saved the monorail was high taxes or slashing the project to the bone.

Members of the monorail family watched in anguish as symptoms went unaddressed or misdiagnosed. There were idealistic projections of revenue from a motor vehicle excise tax. There was the failure of monorail officials who did not intelligently address how the transit system would create money for future operations and maintenance.

As vital signs dimmed, the monorail got skinnier. Literally.

The project paled in comparison to what voters had approved. The monorail's loved ones even wondered how such a scaled-down plan could become the spine for a whole monorail network.

Underfunded and overwhelmed, the monorail just couldn't take it anymore. May it rest in peace.

In lieu of flowers, please send cash contributions to groups working to make sure that Seattle confronts existing transit problems, such as the dilapidated Alaskan Way Viaduct, before it gives life to new ones.

A monorail memorial service is planned for later this week at the downtown headquarters of the monorail project.

Mayor Nickels sends heartfelt sympathies -- provided, that is, the monorail does not miraculously rise like Lazarus from the grave.

P-I columnist Robert L. Jamieson Jr. can be reached at 206-448-8125 or

At September 16, 2005 7:59 AM, Blogger Mike Hu said...

Cap Flap
New State Gas Cap Law Hurts Small Businesses, Dealers, Consumers and Economy; Is This What We Want for Our State? Perspective from a Small Gasoline Dealer

By Candace Fukuda-Hanle, 9/15/2005 11:44:12 PM

I am the owner of a gas station in Hawaii who is really concerned about the future in the gasoline business in this state – for both consumers and dealers.

My husband Jim and I moved back from Seattle 3 years ago to take over a 75-year-old Chevron station that my grandfather originally owned in Hilo.

Low and behold, the first-of-its-kind in the nation gas cap law was passed in 2002, revised in 2004, and implemented in September 2005. We really didn’t understand how it worked, and neither of course did the public, news media or most people in public office.

As every week progresses, we find out how the gas "game" is played by consumers and those in the gasoline and oil industry.

Once we are told every Monday by the state Public Utilities Commission the wholesale price of gasoline, we look to increase or decrease the price of the retail price of what we sell.

This all depends on one huge variable - when did the gas station purchase the last batch of gasoline? Did they just get a load of gas at the old price or new price?

As most consumers noticed, the price of gas went up on different days, depending on when the gas station purchased their next batch of gasoline and at what price.

As I watched the television news last night, it is wonderful to hear that the price is going down.

Consumers are waiting to fill their gas tanks, and analyst and government officials are telling consumers to hold off buying gas until the price goes down next week.

But the only problem is now consumers have stopped buying gasoline and we are sitting on the gasoline we bought at a higher price. The consumers are expecting or waiting for the price to go down on Monday, but it might not.

The price will not go down until the gas stations sell the gas from the previous buy that they purchased at a higher price, and must sell at the higher price, or lose money.

However, if the Shell station across the street reduces its price on Monday by 50 cents and I still have gas from the previous week, I should reduce my price to compete.

But who eats the 50 cents on every gallon?

Are the oil corporations going to "eat it" so I don’t lose money and can continue to compete? Or is it the government and taxpayers that "eats it" so I don’t lose money and can compete?

I only make 10 cents on every gallon – 10 cents a gallon pays for utilities, insurance, employee wages/benefits.

At the end after all these expenses, as an owner of a gas station, I make 1 to 2 cents on every gallon.

So that means I am stuck - I cannot afford to keep the price higher and wait until the gas I bought at a higher price runs out and I cannot eat the 50 cent per gallon loss.

The other options are I go out of business – and this will start to happen more and more with the stations throughout the state – or I just let the station run out of gas and buy it just when the price is low. Either way, consumers and businesses lose.

The gas cap law does not make me want to run a gas station business. This law only promotes a monopoly where Aloha and Costco can sell cheap gas. There is no room for the other companies or small business owners.

On a final note, and to show how this law hurts more than just gas station owners and consumers, we also took over my parent’s restaurant (35-year-old business) in Hilo.

Of course when the price of gas is high and it is the top headliner news every night, we see a decrease in what people want to spend or are able to spend. They are more cautious in what they buy and this hurts the economy.

Is this what we want to happen to Hawaii?

My generation is moving back to run businesses like these to keep the economy flourishing, provide service to the community and most of all to take care of our parents and our family.

We made better money in the mainland and question why are we doing this and making these kinds of sacrifices?

I hope the Hawaii government and media can give me some insight to my problem. I need to know what other businesses are doing to stay afloat.

Candace Fukuda-Hanle is the owner with her husband Jim of Makena’s Chevron and Kandi’s Drive Inn in Hilo, Hawaii. Reach Ms. Fukada-Hanle at

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