Yeah I thought that was particularly funny. I was ambivalent to another Clinton White House but now I'm starting to dread it.

It won't do any of us a damn bit of good -
Read Supreme Court, Iraq, medical coverage - if McCain gets elected, eh?  I give the Goppers credit for one thing.  They sure know how to set bear traps for the Dems.  And most of the time, the Dems walk straight into them.

POLITICALLY - Hillary is right on this one.

Well those are Democrats. Who cares about them?

This sort of thing makes it very hard for us to take on McCain.

McCain sucks. Did I tell you that already? Well he does.

You beguile yourself, my friend.
The vast majority of Americans hear 5-second Faux soundbites.

It's a sad fact - but a political fact none-the-less.
To deny it is to commit political suicide.
(Which the Dems seem to have an incredible ability at doing)

its what people have been saying, Clinton believes the way to BEAT the republicans is to ACT like the republicans

Yep. I'll just do my thing and skip this whole politics thing if this year plays out in the way it appears to be heading.

I've never seen such a thing. McCain is the weakest candidate I've ever seen. He has one strength. The media. But no real base. And there's tons of video of him flailing around for a position. We should be destroying him and not agreeing with him. Again, when it comes from the GOP and the Dem the voters will take it more seriously. I'm not sure why Sen. Clinton doesn't realize how damaging all of her actions have been for the party.

Yeah -

And you can take your Holier-Than-Thou attitude all the way to back alley abortion clinics, and cancer hospices for people without medical coverage, and VA hospitals mental wards - if McCain wins.

People who CAN play golf aren't the people who need the Democrats to win this November.  Jesus Friggin Christ - the gas tax deal is a non-issue - it's a GOP ploy.  Or don't you realize that??

Consumption can change in response to huge price shifts over the longterm.

When the price elasticity of demand is high, it doesn't mean demand never responds to price.  It just means that, for various systemic reasons, it will not (or cannot) fluctuate in the short term due to price.

Common sense bears this out.

Before commuting to work today, I did not check the internet for the latest gas quote, and then choose to take a longer route because prices were down $0.02.  This weekend, I plan to go to the Mall, and won't be checking the price of gas on that day either.

Now, over the longrun - if prices are extremely high, we may see trends for consumers to buy smaller, more fuel efficient cars (there was a frontpage article on this, in fact, in today's NY Times).

But that is longrun.

People will not sell their Hondas and buy an SUV just to take advantage of the gas tax holiday.

Honestly, heresj, there is ample academic and empiric research to back what I am saying.  Gasoline is the textbook example used when talking about elasticity.

oh and a commenter said this

Is the gas market "broken" as you suggest? The short answer is no. You're right that competition generally drives prices down, but that only works to the extent more product can be produced.

Where supplies are fixed -- and oil/gas supplies, for all intents and purposes, are -- it is the demand that determines price. One oil company could cut its gas prices, but it can't sell anymore gas than it already is (because it already sells all the gas it has), so purchasers would have no choice but to get the rest of their gas from someone else. This leaves oil companies with no incentive for lowering prices. If I'm already selling out all my inventory, and I can't make any more, lower prices cannot boost sales or take sales from someone else. All they can do is cut my profits.

Your model posits suppliers bidding against each other to sell gas. But with supplies fixed and limited, in effect what is happening is that buyers bid agianst each other to purchase gas.

Hi TruthM,

You are missing something: when you are getting hit with a windfall profits tax, you have a strong economic incentive to back off on the price gouging, because your profits are incrementally taxed above a certain threshold.

So the windfall profits tax creates an additional (and powerful) incentive that is not being considered by those folks who are talking about the whole fixed-supply = price increase thing.

Maybe johnnygun can translate that for us, seeing as he uprated it.