Issue 211, August 29, 2000  

In California, We Trade Chips For Gas

By Stephen M. Lawton

      Driving in to work today, I heard a report that gasoline prices in the past week dropped an average of 7 cents nationally. Really? Last time I checked, they were going up again. In fact, I'm paying well in excess of $2 a gallon, as are many of the drivers in the Golden State.
      In the Midwest, however, prices fell another 17 cents a gallon to $1.45. Even though drivers in Wisconsin were paying well over $2 a gallon a few weeks ago, federal intervention has boosted the supply so that now prices are far lower. Still, one driver interviewed on the radio was complaining that they are still much higher than the 99 cents a gallon he paid a year ago at this time.
      What's the trade-off that makes it fair for Washington to allow our prices to remain sky-high while they pull petroleum from the national reserves for Midwesterners? I'd have to say it's the price of technology. Let's take a look at an example.
      I selected a computer reseller in Chicago at random. The company sells a basic system for $600 with a 400MHz Celeron, a 4.3GB drive, 32MB RAM and all the usual amenities. For that same $600 in Silicon Valley, you can get a 533MHz Pentium III, 64MB RAM and a 10GB drive. So if you live in California, you can get a great deal on technology.
      OK, that's great. But once I buy my computer, I don't get another after typing 200 words. I will buy gas after driving 200 miles. Let's see — if you live in California, you can save $200 on your computer. When you consider that we pay about $2 a gallon, that's 100 gallons. In other words, if you buy a computer in California, you save enough money to drive your SUV for about two weeks. Lucky us.
      When prices rose in the Midwest, the national news was all over the story and moved not only members of Congress, but the president himself. When prices rose here, no one in Washington looked up from their martini.
      Incidentally, why don't we get the benefits of lower gas prices since we make reformulated gas here in the Golden State? In fact, I can see the fires at Tosco from my office window. Just asking.
      I can't wait to see what Congress will do next. By the way, if you drive one of those nifty hybrid cars — like Toyota's Prius — those extra 100 gallons could take you all the way to Washington where you could tell at your representative just what he or she can do with those gas subsidies for the Midwest.
      I guess the moral is: The next time one of your computers dies and you buy a new one, not only can you shove a few extra bucks into your tank, put the old computer in there too.

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