I have received several of the following emails in the past two weeks from a number of different people. For the sake of discussion, here’s the email:

This was originally sent by a retired Coca Cola executive. It came from one of his engineer buddies who retired from Halliburton. It’s worth your consideration.

Join the resistance!!!! I hear we are going to hit close to $4.00 a gallon by next summer and it might go higher!! Want gasoline prices to come down? We need to take some intelligent, united action. Phillip Hollsworth offered this good idea.

This makes MUCH MORE SENSE than the “don’t buy gas on a certain day” campaign that was going around last April or May! The oil companies just laughed at that because they knew we wouldn’t continue to hurt ourselves by refusing to buy gas. It was more of an inconvenience to us than it was a problem for them.

BUT, whoever thought of this idea, has come up with a plan that can really work. Please read on and join with us! By now you’re probably thinking gasoline priced at about $1.50 is super cheap. Me too! It is currently $2.79 for regular unleaded in my town. Now that the oil companies and the OPEC nations have conditioned us to think that the cost of a gallon of gas is CHEAP at $1.50 – $1.75, we need to take aggressive action to teach them that BUYERS control the marketplace….. not sellers. With the price of gasoline going up more each day, we consumers need to take action. The only way we are going to see the price of gas come down is if we hit someone in the pocketbook by not purchasing their gas! And, we can do that WITHOUT hurting ourselves. How? Since we all rely on our cars, we can’t just stop buying gas. But we CAN have an impact on gas prices if we all act together to force a price war.

Here’s the idea:

For the rest of this year, DON’T purchase ANY gasoline from the two biggest companies (which now are one), EXXON and MOBIL. If they are not selling any gas, they will be inclined to reduce their prices. If they reduce their prices, the other companies will have to follow suit.

But to have an impact, we need to reach literally millions of Exxon and Mobil gas buyers. It’s really simple to do! Now, don’t wimp out at this point…. keep reading and I’ll explain how simple it is to reach millions of people.

I am sending this note to 30 people. If each of us sends it to at least ten more (30 x 10 = 300) … and those 300 send it to at least ten more (300 x 10 = 3,000)…and so on, by the time the message reaches the sixth group of people, we will have reached over THREE MILLION consumers. If those three million get excited and pass this on to ten friends each, then 30 million people will have been contacted! If it goes one level further, you guessed it….. THREE HUNDRED MILLION PEOPLE!!!

Again, all you have to do is send this to 10 people. That’s all. (If you don’t understand how we can reach 300 million and all you have to do is send this to 10 people…. Well, let’s face it, you just aren’t a mathematician. But I am, so trust me on this one.)

How long would all that take? If each of us sends this e-mail out to ten more people within one day of receipt, all 300 MILLION people could conceivably be contacted within the next 8 days!!!

I’ll bet you didn’t think you and I had that much potential, did you?

Acting together we can make a difference. If this makes sense to you, please pass this message on. I suggest that we not buy from EXXON/MOBIL UNTIL THEY LOWER THEIR PRICES TO THE $1.30 RANGE AND KEEP THEM DOWN.

THIS CAN REALLY WORK.

So a Coca Cola executive got this economic idea from his engineer buddy who used to work at Halliburton. He must really know what he’s talking about since he worked at Halliburton, right? Here we have an example of False Authority Syndrome — the belief that a person’s expertise in one area gives that person automatic expertise in some other area. He’s an engineer at Halliburton! Yeah, but does that make him an expert in economics? To put it another way, do you go to your dentist for advice on your septic tank problems? Yeah, I didn’t think so.

I contend that this idea is not sound economics because it ignores the nature of supply and demand. The email continues by asking people to stop buying gas from ExxonMobil stations and buy it from others. What will this do? The email claims that if ExxonMobil is not selling any gas, it will be inclined to reduce prices, and if one company reduces its prices, the other companies would have to follow suit. IF 100% of all Americans bought their gas from non-ExxonMobil stations, what would be the result?

The obvious answer is that ExxonMobil stations would not sell any gas, but does that mean that they would take it in the shorts? No. The non-obvious answer is that other stations would experience an increased demand for their gas. So to increase their gas supplies, they would buy up the unsold gas at the ExxonMobil stations. Since this plan by a former Halliburton engineer suggests shifting purchase locations rather than reducing gas purchases, it will have no effect on the price of gas or ExxonMobil’s overall sales. But it will be successful in raising gas prices because of the shifted demand and extra handling of the gas. This is sounding more and more like a liberal idea because, as Quinn’s First Law states, liberalism always generates the exact opposite of its stated intent. This email offers a plan that purports to force gas prices down, but if carried out, it would actually make prices go up.

Supply and demand. These are the twin economic forces that drive a free economy. This proposal does nothing for demand other than shifting it from one store to another, and it will have no real effect on the evil corporate boogerheads at ExxonMobil. To change prices over time, we need either to reduce demand and/or increase supply.

Don’t like paying big bucks when you fill up your 17 MPG car? Perhaps you should consider buying a more fuel-efficient car that gets 30+ MPG, and you won’t be paying so much to fill up. How about setting up a carpool to get to work or the store? Either solution would reduce individual demands for gas. As for supply, we could do a lot to lower local prices if we did away with EPA-required local gas formulations and have one standard gas blend for the whole U.S. If that were the case, a demand increase in Chicago could be filled by bringing in extra gas from surrounding areas. As it is now, a spike in demand in one area cannot be filled by gas from another area because the EPA forbids it. Way to go, unelected bureaucratic boogerheads!

Speaking of demand, we still get about 17% of our oil from the Middle East. If we were to tap our own oil fields off-shore and in ANWR, we could reduce the amount we pull from them. Supplying more of our own oil would mean not providing capital to people who hate us and seek our destruction. Lenin once said, “The Capitalists will sell us the rope with which we will hang them.” But in the case of the Middle East, we are paying them for the rope to hang us.

In short (too late!), silly plans like the kind this email proposes will do nothing to help matters, and actually have the potential to make matters worse. The real solution is to decrease our demand for gas and increase our supply. Then we would see a drop in gas prices.

And please remember: if any email tells you to forward it on to others, don’t!

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