Gas Prices Going Down - Is That Good or Bad News?

To most of us the change to a recent downward trend in gasoline prices is great news. However, given the fickle nature of overconsumers and automobile companies, it may not be. How many times have the automobile companies learned that the long-term trend in fuel prices is violently upward, only to go for short-term profits with huge SUVs and high-power engines? How many times have high-income status seekers complained about gasoline prices and then bought those short-term-profit gas guzzlers to maintain their status and keep gas prices high for the rest of us?
Gas prices have started to go down for two reasons, and if we concentrate on those reasons, prices will continue to go down. The most basic reason is that $4.00-plus gasoline (Europeans, stop laughing. We know and appreciate that yours is much higher.) finally encouraged most drivers to cut back on the number of miles that they drive. If you continually evaluate whether a trip is necessary, run several errands in tandem, and drive your car that gets the best gas mileage, total demand for gasoline will decrease as will prices. The other reason for prices going down is that investors, seeing a slight upward direction to stock prices are starting to switch from driving up the market price for oil to investing again in stocks as a better long-term alternative. The problem with driving up the price for oil as an investment is that the resulting high-priced energy drives down all of your other investments, and you end up shooting yourself in the foot (Which you will need after high energy prices make us all walk or ride bicycles.). Of course, increased walking and/or riding bicycles will both decrease the number of total miles driven and start to make us physically fit again, so it's a win-win situation.

Save the Economy - Bring Back the Shmoo?

Al Capp, the ingenious creator of the "Li'l Abner" comic strip solved our economic problems in the late 1940's with his introduction of the Shmoo. The Shmoo was a cute pear-shaped creature which would do anything to make people happy. (Click on the title of this post for more Shmoo info.) It would lay eggs and milk, turn itself into a sizzling steak, or serve as a toy for young children. In today's world, I'm sure a Shmoo would be more than happy to become a tankful of gasoline. Shmoos multiplied at an alarming rate, so there was never a lack of Schmoos waiting to please you in some way. Sounds great, doesn't it? The problem is that we get lazy when everything is done for us, and we lose our capability to solve problems on our own. When times are good, we are more than willing to coast and accept things the way they are. Only in hard times do we maximize our resources and turn them toward solving the problems we face. Sometimes we have to take the doom and gloom out of bad news in order to look at it as an opportunity to solve some problems. Progress comes out of adversity. Fifty years from now when we are driving around in our magnetically levitated fuel cell powered two-passenger vehicles with modular storage add-ons, we will appreciate the incentive that we gained from high-priced gasoline. In the meantime, drive less, carpool, and be a Shmoo to all of your friends. (And don't misspell the word to be ornery...)

Make Her Happy

I saw a billboard today from a jewelry store which showed a woman with a big smile on her face and had the caption, "Make her happy". My first question was whether you can really buy a woman's happiness with a glittery piece of jewelry that has no function (unless you want to cut a piece of glass). This triggered my second question: Why do advertisers try to sell things to make women happy while they never advertise about happiness as a goal when they are selling things to men? If men and women are supposed to be treated equally, how did happiness get to be more of a feminine goal than a masculine one? Can you buy happiness at all? Perhaps the problem is that advertisers are not talking about true happiness. It is even possible that men and women have different interpretations of what happiness is, and they may not even realize when they have achieved it because of a deficient contentment gene. I guess our forefathers (and foremothers) were right in setting the official goal as the "pursuit of happiness". If at first you don't succeed, try, try again...

Restaurant Pricing

Did you ever notice that when you go to a restaurant the bill is roughly constant? My wife and I tend to go to moderate family restaurants, and the bill is almost always about $20.00 for the two of us before tax and tip. Restaurants of all types design their menus around the amount of money they wish to receive from each customer. In a typical family restaurant where we live, you can purchase an egg/pancake dish for $7.95, a sandwich plate for $7.95, or a dinner special for $7.95. To be sure, you can shave the price slightly by ordering only one egg or get a better dinner for a few dollars more. In addition, the pricing is biased by whether you order drinks, side dishes, or desserts, which are higher profit items.

Restaurants today are businesses which happen to serve food as their product, rather than hospitality centers where the main goal is to impress the guest with the quality of the food and service. The primary approach is to attract and process through as many customers as possible at a certain average dollar value per customer. This is usually done by compressing the range of prices on the menu as discussed above and by streamlining the process in order to get as many customers as possible through in a given period of time. The latter approach is the fast food philosophy.

It will be interesting to see whether the restaurant business starts to introduce some cost-reduction innovations now that gasoline prices are getting higher every day. The easiest way to compensate for the higher cost of gasoline is to eat at home, saving both the costs of driving and of the restaurant. Some restaurants are now packaging menu items as frozen entrees that you can purchase at the supermarket and eat at home. Is this the best of both worlds?