The Weiner Component V.2 #35 – Money & the Presidents: Part 1

English: Plaza of the Presidents, commemoratin...

English: Plaza of the Presidents, commemorating all the US presidents who served during World War II; outdoor display on the grounds of the National Museum of the Pacific War, Fredericksburg, Texas, USA. Each monument honors a US president who served during World War II (FD Roosevelt, Truman, Eisenhower, Kennedy, LB Johnson, Nixon, Ford, Carter, Reagan, and GHW Bush) (Photo credit: Wikipedia)

English: Four Presidents: President Ronald Rea...

English: Four Presidents: President Ronald Reagan with his three predecessors. (Photo credit: Wikipedia)

The Wealth of a nation is its level of productivity which is determined in terms of monetary value.  The monetary value is in terms of the currency of the nation.  The currency itself is merely the agent of exchange; it allows the goods and services of each individual to be exchanged for those produced by all other individuals.  All of this is finite in that there is a limit as to what a particular nation can produce.  This limit is set by the national level of manpower and by the available resources.  While wealth is determined by the currency value an individual controls, the currency itself is an instrument of exchange, not of value.  Money is basically the tool that allows for the creation or production of the actual wealth: the products or services produced.  The actual wealth is the productivity of the nation, all the goods and services it produces, its GDP.

********************************

President Harry S. Truman continued the policies of President Franklin D. Roosevelt.  He presided over the end of World War II and he created the Fair Deal as his economic policy.  Truman also presided over the beginnings of the Cold War with the Soviet Union and the Korean War or police action.

 

The next president was former General Dwight David Eisenhower.  He was the 34th President, entering the political race in 1952 as a Republican.  He was President from 1953 to 1961, the first Republican elected since 1928.  Eisenhower was a moderate conservative who continued the New Deal agencies and expanded Social Security.  Economically he built the first interstate highway system in 1956.  Presumably this was done because of the Cold War: an interstate highway system would be beneficial if needed for military operations within the country and it would also be beneficial in helping to provide continued economic growth.

 

In the 1961 Race Republican Richard M. Nixon, Eisenhower’s former Vice President, ran against Democratic John F. Kennedy.  Kennedy won the election by 6/10s of 1% of the popular vote.  In the electoral vote he did better.

 

When Kennedy took office on January 20, 1961 the country was facing a mild recession.  His policy was to lower rates on the income taxes.  As a result of this the Federal Government collected more taxes than it had previously done.  People had more money and spent more and the recession ended.  Interestingly since that time many Republican Presidents like Ronald Reagan have claimed that lowering taxes would actually increase government revenue.  It hasn’t happened.

 

Despite negative incidents during his tenure like the Bay of Pigs invasion of Cuba and the Cuban Missile Crisis Kennedy was one of the most popular presidents that this country had.  His approval rating was 77%.  Unfortunately he was assassinated on November 22, 1963.  His Vice President Lyndon B. Johnson replaced him as President and then was elected in his own right for another four years.  President Johnson was able to get Kennedy’s Civil Rights Act of 1964 through Congress.  In fact Johnson was able to get through some of the bills Kennedy had strongly supported.  In his own right Johnson declared War on Poverty and had a measure of success on that until he extended the war in Viet Nam, bringing American troops directly into combat.  President Kennedy had used U.S. troops as advisors only; President Johnson attempted to defeat the Viet Cong.  He apparently felt that the United States was that powerful.  He was wrong.

 

President Johnson’s domestic policy was called The Great Society.  He attempted to do too much.  Attempting to fight his War on Poverty and at the same time conduct a full scale war against North Vietnam without the American Public being affected was more than the country could handle.  The cost of all this began a spiral of inflation which was not ended until the second year of the Reagan Administration in the early 1980s.  Johnson began the excess spending during the first half of the 1960s, Reagan ended the growing inflationary spiral during his second year in office during the early 1980s; growing inflation existed for about a 20 year period.  The termination of the inflation was a very economically painful process upon small business.  The inflationary spiral was broken by raising interest rates to about 20%, making money too expensive to borrow.

 

The number of American military personnel in Viet Nam was increased dramatically during the Johnson years, going from 1600 advisors to 525,000 combat troops in 1967.  American casualties soared.  In addition the sorted battles were shown nightly by the news on television throughout the United States.  There was an angry antiwar movement especially on college compasses.  Summer riots broke out in most major cities after 1965 and crime rates soared in the U.S.  With all of the above and not being able to win the Viet Nam War or police action, since it was not officially a war, broke Johnson’s spirit.  He refused to run for the presidency in 1968.

 

In that year, after a tumultuous Democratic Convention in Chicago, Hubert Humphrey, ran against and lost the election to the Republican candidate, Richard M. Nixon.  Nixon, the country’s 37th President, if he hadn’t been involved in the Watergate Break-ins, would have probably emerged as one of the outstanding Presidents of the United States.  In 1970, he created the Environment Protection Agency.  He did after a long period of time end the Viet Nam War in 1973, bringing home all the American prisoners of war.  His visit to China in 1972, the first such for an American President, led to diplomatic relations with that country.  These relations caused the Soviet Union to sign an Anti-Ballistic Missile Treaty with the United States later that same year.  He initiated détente.

 

When he first took office he imposed wage and price controls in 1969 in an attempt to stop the inflation spiral that had reached 4.7%.  It didn’t work because of all the exceptions that had to be applied.  Fighting the Viet Nam War and attempting to maintain peacetime conditions in the nation which would continue well past his time in office brought on the continued rise in inflation.  Not Nixon nor anyone else as President would have been able to stop it.  It would take extreme action by the Federal Reserve to do so.

 

For his second term in 1972 Nixon wanted a massive victory.  This required assorted actions, some of which were illegal.  Nixon and the Republican leaders secretly supported the far left Democratic candidate that would be unacceptable to the majority of the American people.  They chose South Dakota Senator George McGovern, who had unsuccessfully attempted to replace Robert Kennedy after his assassination in 1968.  McGovern was generally considered a far-left liberal.  He was the hero of the radical college groups.  The Nixon campaign contributed heavily to the McGovern candidate.  That action may have been immoral but it was not illegal.

 

In addition to this Nixon had a group in Washington called the “plumbers.”  They broke into Democratic headquarters at the Watergate Hotel a number of times and were finally caught and arrested.  From that point on a cover-up ensued until it finally came apart two years into Nixon’s second term.

 

Nixon was informed by Senator Barry Goldwater, probably the leading Republican in the U.S. at the time, that he had to resign or proceedings to impeach him would be begun the next day.  On August 9, 1974, Richard M. Nixon became the first President to resign from the presidency.

 

Ironically he was replaced by the Vice President he had himself appointed, Gerald Ford.  The original Vice President, Spiro Agnew, had earlier resigned from office rather than face a lengthy corruption trial which would have found him guilty.  Ford, shortly after assuming the Presidency, pardoned Nixon for any crimes he had or might have committed.  Nixon accepted the pardon, thus admitting his guilt by accepting the pardon.

 

Gerald R. Ford had been appointed to the Vice Presidency by then President Richard M. Nixon.  He was also earlier appointed to the Senate by the governor of Michigan.  At that time he was Minority Leader at the House of Representatives.  He had served there for 25 years in the House of Representatives.  As President he appointed Nelson Rockefeller as his Vice President.

 

President Ford signed the Helsinki Accords, which officially marked an end to the Cold War and brought about détente.  He presided over the end of the Viet Nam War nine months into his presidency.  Domestically, he served as President over the worst economy since the Great Depression, dealing with growing inflation and a recession.  His foreign policy was characterized by the increased role Congress began to play.  He served as Chief Executive of the United States for 895 days, the shortest term for a president who did not die in office.  In 1976 Gerald Ford lost the presidency to the Democratic candidate, former Georgia governor James Earl (Jimmy) Carter.

 

Jimmy Carter had been elected Governor of Georgia from January 12, 1971 through January 14, 1975.  Despite the fact that he was little known outside of Georgia Democratic candidate Jimmy Carter defeated Republican President Gerald Ford in 1976.  He assumed office on January 20, 1977 as the 39th President of the United States.

 

On his second day as President, Carter pardoned all Viet Nam draft evaders of the Viet Nam War.  He was able to get the first signed agreement between the Palestinians and Israel, the Camp David Accords.  He signed the Panama Canal Treaties that gave Panama control of the Canal and the second round of Arms limitation Talks (SALT II).

 

Economically the country was going through stagflation during his tenure, both high inflation and high unemployment.  Carter had his Federal Reserve chairman, Paul Volcker, attempt to break the inflation spiral which had reached about 15%.  Volcker did this by raising the interest rate to about 20%, making money too expensive to borrow.  This, in turn, would drive many small businesses into bankruptcy as they could not afford those rates during their economic dry seasons.  Many complained to the President and he had Volcker end the policy.  The next President would enforce it and end the inflation spiral while driving numerous small businesses into bankruptcy.

 

Gasoline and fuel prices rose in 1980 to about $2.16 a gallon for gasoline and went considerably higher for heating fuel also.  President Carter recommended that people keep their thermostats set at 65 degrees and wear sweaters.  He did this at the White House.

In 1979 to 1981 there was the Iranian hostage crisis which ended shortly after the next President took office.  Because the Soviet Union invaded Afghanistan Carter ended détente and resumed the Cold War.

 

In the 1980 Presidential Election the Republicans chose Ronald Reagan to run against President Jimmy Carter.  Reagan won an overwhelming victory.

**********************************

Up to this point in our history the National Debt, which had almost always been with us was under one trillion dollars.  The Federal Government had spent money but it had always been on a limited basis.  Roosevelt, perhaps the greatest of the spending presidents, while he doubled the money supply that had been available in the country, did so without raising the National Debt significantly.  Even with World War II, the immediate post war spending, and the Cold War the country’s spending did not reach this point.  All of this would change after 1981 with the election of Ronald Reagan to the Presidency.

 

The Weiner Component V.2 #35 – Money & the Presidents: Part 1

 

The Wealth of a nation is its level of productivity which is determined in terms of monetary value.  The monetary value is in terms of the currency of the nation.  The currency itself is merely the agent of exchange; it allows the goods and services of each individual to be exchanged for those produced by all other individuals.  All of this is finite in that there is a limit as to what a particular nation can produce.  This limit is set by the national level of manpower and by the available resources.  While wealth is determined by the currency value an individual controls, the currency itself is an instrument of exchange, not of value.  Money is basically the tool that allows for the creation or production of the actual wealth: the products or services produced.  The actual wealth is the productivity of the nation, all the goods and services it produces, its GDP.

********************************

President Harry S. Truman continued the policies of President Franklin D. Roosevelt.  He presided over the end of World War II and he created the Fair Deal as his economic policy.  Truman also presided over the beginnings of the Cold War with the Soviet Union and the Korean War or police action.

 

The next president was former General Dwight David Eisenhower.  He was the 34th President, entering the political race in 1952 as a Republican.  He was President from 1953 to 1961, the first Republican elected since 1928.  Eisenhower was a moderate conservative who continued the New Deal agencies and expanded Social Security.  Economically he built the first interstate highway system in 1956.  Presumably this was done because of the Cold War: an interstate highway system would be beneficial if needed for military operations within the country and it would also be beneficial in helping to provide continued economic growth.

 

In the 1961 Race Republican Richard M. Nixon, Eisenhower’s former Vice President, ran against Democratic John F. Kennedy.  Kennedy won the election by 6/10s of 1% of the popular vote.  In the electoral vote he did better.

 

When Kennedy took office on January 20, 1961 the country was facing a mild recession.  His policy was to lower rates on the income taxes.  As a result of this the Federal Government collected more taxes than it had previously done.  People had more money and spent more and the recession ended.  Interestingly since that time many Republican Presidents like Ronald Reagan have claimed that lowering taxes would actually increase government revenue.  It hasn’t happened.

 

Despite negative incidents during his tenure like the Bay of Pigs invasion of Cuba and the Cuban Missile Crisis Kennedy was one of the most popular presidents that this country had.  His approval rating was 77%.  Unfortunately he was assassinated on November 22, 1963.  His Vice President Lyndon B. Johnson replaced him as President and then was elected in his own right for another four years.  President Johnson was able to get Kennedy’s Civil Rights Act of 1964 through Congress.  In fact Johnson was able to get through some of the bills Kennedy had strongly supported.  In his own right Johnson declared War on Poverty and had a measure of success on that until he extended the war in Viet Nam, bringing American troops directly into combat.  President Kennedy had used U.S. troops as advisors only; President Johnson attempted to defeat the Viet Cong.  He apparently felt that the United States was that powerful.  He was wrong.

 

President Johnson’s domestic policy was called The Great Society.  He attempted to do too much.  Attempting to fight his War on Poverty and at the same time conduct a full scale war against North Vietnam without the American Public being affected was more than the country could handle.  The cost of all this began a spiral of inflation which was not ended until the second year of the Reagan Administration in the early 1980s.  Johnson began the excess spending during the first half of the 1960s, Reagan ended the growing inflationary spiral during his second year in office during the early 1980s; growing inflation existed for about a 20 year period.  The termination of the inflation was a very economically painful process upon small business.  The inflationary spiral was broken by raising interest rates to about 20%, making money too expensive to borrow.

 

The number of American military personnel in Viet Nam was increased dramatically during the Johnson years, going from 1600 advisors to 525,000 combat troops in 1967.  American casualties soared.  In addition the sorted battles were shown nightly by the news on television throughout the United States.  There was an angry antiwar movement especially on college compasses.  Summer riots broke out in most major cities after 1965 and crime rates soared in the U.S.  With all of the above and not being able to win the Viet Nam War or police action, since it was not officially a war, broke Johnson’s spirit.  He refused to run for the presidency in 1968.

 

In that year, after a tumultuous Democratic Convention in Chicago, Hubert Humphrey, ran against and lost the election to the Republican candidate, Richard M. Nixon.  Nixon, the country’s 37th President, if he hadn’t been involved in the Watergate Break-ins, would have probably emerged as one of the outstanding Presidents of the United States.  In 1970, he created the Environment Protection Agency.  He did after a long period of time end the Viet Nam War in 1973, bringing home all the American prisoners of war.  His visit to China in 1972, the first such for an American President, led to diplomatic relations with that country.  These relations caused the Soviet Union to sign an Anti-Ballistic Missile Treaty with the United States later that same year.  He initiated détente.

 

When he first took office he imposed wage and price controls in 1969 in an attempt to stop the inflation spiral that had reached 4.7%.  It didn’t work because of all the exceptions that had to be applied.  Fighting the Viet Nam War and attempting to maintain peacetime conditions in the nation which would continue well past his time in office brought on the continued rise in inflation.  Not Nixon nor anyone else as President would have been able to stop it.  It would take extreme action by the Federal Reserve to do so.

 

For his second term in 1972 Nixon wanted a massive victory.  This required assorted actions, some of which were illegal.  Nixon and the Republican leaders secretly supported the far left Democratic candidate that would be unacceptable to the majority of the American people.  They chose South Dakota Senator George McGovern, who had unsuccessfully attempted to replace Robert Kennedy after his assassination in 1968.  McGovern was generally considered a far-left liberal.  He was the hero of the radical college groups.  The Nixon campaign contributed heavily to the McGovern candidate.  That action may have been immoral but it was not illegal.

 

In addition to this Nixon had a group in Washington called the “plumbers.”  They broke into Democratic headquarters at the Watergate Hotel a number of times and were finally caught and arrested.  From that point on a cover-up ensued until it finally came apart two years into Nixon’s second term.

 

Nixon was informed by Senator Barry Goldwater, probably the leading Republican in the U.S. at the time, that he had to resign or proceedings to impeach him would be begun the next day.  On August 9, 1974, Richard M. Nixon became the first President to resign from the presidency.

 

Ironically he was replaced by the Vice President he had himself appointed, Gerald Ford.  The original Vice President, Spiro Agnew, had earlier resigned from office rather than face a lengthy corruption trial which would have found him guilty.  Ford, shortly after assuming the Presidency, pardoned Nixon for any crimes he had or might have committed.  Nixon accepted the pardon, thus admitting his guilt by accepting the pardon.

 

Gerald R. Ford had been appointed to the Vice Presidency by then President Richard M. Nixon.  He was also earlier appointed to the Senate by the governor of Michigan.  At that time he was Minority Leader at the House of Representatives.  He had served there for 25 years in the House of Representatives.  As President he appointed Nelson Rockefeller as his Vice President.

 

President Ford signed the Helsinki Accords, which officially marked an end to the Cold War and brought about détente.  He presided over the end of the Viet Nam War nine months into his presidency.  Domestically, he served as President over the worst economy since the Great Depression, dealing with growing inflation and a recession.  His foreign policy was characterized by the increased role Congress began to play.  He served as Chief Executive of the United States for 895 days, the shortest term for a president who did not die in office.  In 1976 Gerald Ford lost the presidency to the Democratic candidate, former Georgia governor James Earl (Jimmy) Carter.

 

Jimmy Carter had been elected Governor of Georgia from January 12, 1971 through January 14, 1975.  Despite the fact that he was little known outside of Georgia Democratic candidate Jimmy Carter defeated Republican President Gerald Ford in 1976.  He assumed office on January 20, 1977 as the 39th President of the United States.

 

On his second day as President, Carter pardoned all Viet Nam draft evaders of the Viet Nam War.  He was able to get the first signed agreement between the Palestinians and Israel, the Camp David Accords.  He signed the Panama Canal Treaties that gave Panama control of the Canal and the second round of Arms limitation Talks (SALT II).

 

Economically the country was going through stagflation during his tenure, both high inflation and high unemployment.  Carter had his Federal Reserve chairman, Paul Volcker, attempt to break the inflation spiral which had reached about 15%.  Volcker did this by raising the interest rate to about 20%, making money too expensive to borrow.  This, in turn, would drive many small businesses into bankruptcy as they could not afford those rates during their economic dry seasons.  Many complained to the President and he had Volcker end the policy.  The next President would enforce it and end the inflation spiral while driving numerous small businesses into bankruptcy.

 

Gasoline and fuel prices rose in 1980 to about $2.16 a gallon for gasoline and went considerably higher for heating fuel also.  President Carter recommended that people keep their thermostats set at 65 degrees and wear sweaters.  He did this at the White House.

In 1979 to 1981 there was the Iranian hostage crisis which ended shortly after the next President took office.  Because the Soviet Union invaded Afghanistan Carter ended détente and resumed the Cold War.

 

In the 1980 Presidential Election the Republicans chose Ronald Reagan to run against President Jimmy Carter.  Reagan won an overwhelming victory.

**********************************

Up to this point in our history the National Debt, which had almost always been with us was under one trillion dollars.  The Federal Government had spent money but it had always been on a limited basis.  Roosevelt, perhaps the greatest of the spending presidents, while he doubled the money supply that had been available in the country, did so without raising the National Debt significantly.  Even with World War II, the immediate post war spending, and the Cold War the country’s spending did not reach this point.  All of this would change after 1981 with the election of Ronald Reagan to the Presidency.

The Weiner Component #133 – The Free Market & the Cost of Gasoline

English: A typical Valero gas station, in Moun...

English: A typical Valero gas station, in Mountain View. Photographed by user Coolcaesar on August 23, 2005. Category:Images of California (Photo credit: Wikipedia)

Valero Energy Corporation

Valero Energy Corporation (Photo credit: Wikipedia)

Not many weeks ago, on July 31st 2015, there was a short article in the Los Angeles Times entitled “Valero profit rises on high gas prices.  It stated that California’s sky-high gasoline prices brought about a record high second quarter profit for refiner Valero Energy Corporation, that operating income from its two California refineries had soared to $295 million for the quarter which ended June 30 or to more than eleven times more than the $24 million earned in that quarter a year earlier.  Valero had posted a second quarter profit net income of $14 billion up from $651 million for that quarter a year earlier.

About a week earlier, on July 26th there was a one paragraph blurb in the same newspaper: “Record profits at refineries – The surge in California’s gasoline prices this year, coming as oil prices have fallen and refining costs have remained stable, has helped refineries collect record gross profits on each gallon of gasoline – as much as $1.17 a gallon in May.  That compares with a more typical gross profit (equal to refinery costs plus profit) of 49 cents a gallon in recent years, state data show.”

With Exxon Mobil’s Torrance refinery operating at less than 20% of its capacity other refineries in the state have seen a dramatic increase in their profits.  The capacity of the Torrance refinery is ten percent of the state’s total and twenty percent of Southern California’s total refined oil.  The Torrance refinery had an explosion in February of this year and probably will not return to full service until the end of the year.  It seems that one or another refinery in California is always partly or completely off line and there always seems to be a shortage of gasoline in the state.  Presumably these problems seem to continually raise the cost of gasoline at the pump to about one dollar or to one dollar and fifty cents higher that in the rest of the country.  We are supposed to be living in a free market economy where the consumer gets the best product at the best price.  Is this true?

At the end of July of 2015 the price of gasoline at the pump had dropped to slightly less than four dollars a gallon while the price of crude oil had gone down to under fifty dollars a barrel.  About a year ago a barrel of crude oil was one hundred dollars or more.  There are generally 42 gallons of refined gasoline that comes from one barrel of crude oil.  At $4 a gallon that means that $168 is the amount made from each barrel of oil.  That is a profit of over 66 percent on each barrel of crude oil.   Valero has its own gasoline stations and sells its gasoline retail at the going price.

****************************

The Free Market as envisioned by the Scottish economist, Adam Smith, in his 1776 book, An Inquiry into the Nature and Causes of the Wealth of Nations, was a reaction to the accepted economic system of the day.  At that time mercantilism was considered a proper approach to economics.  That theory stated that the wealth of a nation consisted of how much gold that country possessed.  The more gold it had, the richer it was.  And these economic systems then were usually controlled by the kings.  Smith’s theory brought about the modern development of capitalism and the market economy.

Briefly and simply: The nation’s true wealth is based upon the productivity of the country.  This is all the goods and services produced within a given time, a fiscal year expressed in the currency of the nation, which was mainly gold.  Money, at that time, being precious metals, mainly in the form of gold coins.  The value of goods and services, that is, all the productivity would be exchanged for their specific value in precious metals.  The value of the specific goods and services would be determined by both the levels of skill of the population, the extent of natural resources that are available or can be acquired by the particular nation, and what other people were willing to pay for the product or service.

In terms of what is going to be produced Smith’s theory of production was based upon the concept of supply and demand.  Entrepreneurs would supply certain goods and services in return for the profit they could make by doing so.  This was Smith’s “invisible hand,”  the profit motive which caused the system to operate.  If the item or service was highly desired then the price people were willing to pay for the item would rise because the supply was below the level of demand.  The higher price, in turn, would bring more producers into the field greatly increasing the supply of the particular item.  As the amount of the item increased beyond the demand the price would drop.  It could actually drop below the cost of its general production.  This would force the less efficient producers out of business and the price, as the supply dropped below the demand, would rise again.  Eventually a state of equilibrium would be reached where the supply would equal the demand.  With a large number of product producers it would be difficult to maintain the equilibrium and the price would continually oscillate.

The consumers, on the other hand, would attempt to get the goods or services at the lowest price possible.  Presumably the lower the price the greater the demand.  This would be their part of the “invisible hand.”  Both sides would be motivated by profit and cost.  There would be a continual process of exchange going on that would allow the consumers to eventually have most of their needs met by getting the goods and services they need at the best possible price and at the most efficient level of production.  Both the successful entrepreneur and the consumer would emerge positively from this exchange.  The inefficient entrepreneurs would have gone bankrupt.

To work properly this system requires a very large number of producers so that the consumers would have a large variety of choices as to how to spend their money and acquire the various products they require.  Today outside of regional agriculture, which produces perishable food products, and the stock market, which can work on rumors or general assumptions that may or may not have any relationship to reality, the principles of supply and demand only function in a very general way or not at all.

The reason for this is the fact that the number of producers of goods and services is limited.  Product manufacture is expensive, setting it up requires large amounts of money.  Consequently the factory system was developed from the 19th Century on.  Having limited producers or factory owners gave them more control over price than the consumer had over demand or price.  This, in turn led to monopolies toward the end of the 19th Century.  These gradually fell under partial control from the governments of the countries in which they existed.  Outside of the two examples of the free market has never really existed.

It is also important to realize that monopolies are not just giant concerns like Standard Oil was at the beginning of the 20th Century, they can also be regional or contained within a small city.  If a city contains only one hospital or only one supermarket, or, for that matter, one anything that provides some product or service, then that is a monopoly and it can charge virtually any amount for the good or service.  Of course it can’t be so high that it will force the consumers to go to other areas to acquire the good or service, but the price could be higher than it would cost in other places.  And that, it seems, is the situation with gasoline in the state of California.  To a slightly lesser extent it is the situation with gasoline throughout the United States.

Presumably the goods and services, the productivity of the country would constitute the wealth of the nation and the people of the nation would determine by their demands for the various products of what that wealth would consist.  Is this theory true?  The answer is obviously sort-of.

The products needed for a society to exist can be rated as necessary, pleasurable, and extravagant.  Necessary services and products are what is needed for life: food, clothing, a proper shelter, in most areas of the country an automobile for necessary transportation.  Anything that is required to maintain a functional standard of living would fit into this category.  Pleasurable items would be raising the necessary items to a higher level of comfort.  The choice of foods would be much more varied and expensive, clothing and housing could be carried to the level of ostentation.  The automobile would be far more fancy and expensive and there would probably be additional vehicles for every member of the family.  The extravagant level would mean that he or she could afford to have anything that money could buy.  All this would be bound to levels of income or in the case of many executives to their level of compensation.

****************************************************

In the United States during the period after the Civil War (1865) to shortly after the turn of the 20th Century, 1917, when the U.S. entered the Great War (W.W.I), the country underwent a rapid movement into industrialization.  The railroads were extended westward from shore to shore, the westward movement occurred, the country changed from being mostly a rural nation to an urban centered one, and the factory system developed and became universal.  It was during this time that the country moved from being a nation of multitudes of small concerns to oligopolies and monopolies.  Virtually every major industry had become a monopoly or oligopoly.  John D. Rockefeller, the owner of Standard Oil, had a reputation of refining not only oil but also many of the state legislatures and even parts of the Federal Government.

It was at this time in 1913 that the 17th Amendment to the Constitution was passed bringing about the direct election of U.S. Senators by the citizens of each state.  Prior to that time the Constitution had the Senators directly elected by the State Legislatures.  The Senate was originally set up as the direct agent of the individual states and represented the states.  What had happened was that by the late 19th Century the Senators had become agents of the monopolies and oligopolies elected by bribed legislatures to represent the companies to which they were originally and still operated as their lawyers.  The monopolies and oligopolies had subverted many of the state legislatures through bribery.  The 17th Amendment was a reform amendment by the Progressive Movement to return the government of the United States to the People.

The Sherman Anti-Trust Act of 1890 went into operation around the turn of the century when both the Progressive Movement and Teddy Roosevelt became President after the assassination of former President William McKinley.  During his term in office Roosevelt became known as a Trust Buster.  The Reform Movement would end with the emergence of World War I in 1914 and would not begin again slowly with the Great Depression of 1929.  It would emerge strongly with the Administration of Franklin D. Roosevelt from 1933 on.  The Great Depression would not end completely until about 1940 with the emergence of World War II.

Since 1945, the end of World War II, the United States has gone continually in and out of social reform.  The Republicans generally have represented big business and the Democrats generally have pushed social reform.  Currently many large companies (corporations today) have been going through mergers and getting bigger.  Even though the Federal Government watches and attempts to keep monopolies from coming into being we seem to be moving in that direction with, it seems, an ever-growing tendency toward companies that are “too big to fail.”

************************************

In the United States and in many other industrial countries of the world the individual owned automobile has become a necessity for general existence.  The distances are too great to walk from one place to another.  The children are taken to school and brought home by car or bus; general shopping requires an automobile; going to and coming home from work requires an automobile.  Virtually most of the general population requires a car.  And, of course, the key to having a car is availability and price of gasoline (oil).  As an example, I have spent my entire working life driving to and from work.

During my lifetime the cost of gasoline has gone up from well under a dollar a gallon to a high of five dollars a gallon.  It currently dropped from over four dollars a gallon to  under three dollars a gallon.  The price of o barrel of oil is currently under $50 a barrel and going down.  If the agreement with Iran is ratified and becomes a treaty there will be a major increase in the world’s oil supply.

In the state of California just enough oil is refined to just meet the demand.  If one of the refineries has to limit its production for any reason then there is a shortage and the price of gasoline and oil profits goes up.  If this isn’t price gouging then I don’t know what is.  Either we need more refineries in Southern California or enough gasoline storage so that the price can follow the supply.  Perhaps the State or Federal Government needs to set up its own storage and supply facilities or/and its own refinery.  After all, the biggest employer in the country is the government.  They sell water and electricity in many municipalities directly to the consumers.  The Federal Government also run agencies like the Tennessee Valley Authority.  If the so called Free Market gouges consumers for their own profit why can’t the Government equally provide the needed goods or services at a reasonable price?