Economics 101 vs Media Manipulation 101 (Hint: Your wallet is losing 0-1 to ExxonMobil)

Gas prices in various countries are affected by many factors including government subsidies, taxes, demand, currency valuation, etc. Oil companies would have you believe it is as simple as supply and demand and most of the mainstream media just nod in agreement without actually thinking about it. Pulitzer-Prize winning writer and former executive editor of the New York Times, Howell Raines, is one of those rare journalists who seems to actually report on how oil is priced and he has the ability and tenacity to actually ask the questions that need to be asked. In the August issue of Portfolio magazine, published by Conde Nast, Raines (or Mr. Raines, as I’m sure the Times would refer to him) points out how the mainstream media continues to get it wrong on its reporting of oil prices, and backs up this argument with real-world facts as to why you should do your own research on this one. Here is a small excerpt from his report, but please do yourself a favor and read the entire piece.

“When it comes to the cost of gasoline, who should we believe? Here are some nominees and their viewpoints:

1. The oil companies: It’s supply and demand at its most basic, just like your professor outlined in your freshman economics course.
2. The petro-toadies in Congress: All we have to do is open up the Arctic National Wildlife Refuge and the waters off Florida and California.
3. The Department of Energy: OPEC has to pump more, and we’ve got to allow more refineries by rolling back environmental restrictions.
4. King Abdullah: OPEC pumps plenty of crude but “despicable” oil-futures speculators in the West are driving up the prices due to their “selfishness.”
5. Senator John McCain: Exxon Mobil has done such a good job of demonstrating the magic of the marketplace that it deserves another $1.2 billion in tax breaks.
6. Senator Barack Obama: Impose a windfall-profits tax to remind American oil executives that price gouging can backfire politically.
7. About 90 percent of the print and TV reporters in America: See No. 1. It really is that ol’ devil supply and demand.
8. The White House: Never mind. Nobody’s home.”

Here is a list from 2007, courtesy of Wikipedia.org, comparing gas prices in various countries: