This has been going on for a very long time, and it’s surprising that it still works — people seem to be so manipulable.
What I’m talking about is the way the oil companies (all making record profits and about to benefit from big tax cuts thanks to the Bush administration’s new “energy” legislation) manipulate prices.
Let’s look at the last year. Gas averaged, say, $1.75 a gallon after years of rising prices. It kept rising steadily, hitting, say, $2.30. Just high enough that people got pissed off. Then, slowly, prices started to go back down… but they never went back down to $1.75. They settled at $2.00. And people were happy to pay the $2 because it was less than the high.
This is the way to raise prices — and profits. Raise prices far beyond the comfort level, then bring them down to a point where people feel better, but still settle on a price that’s higher. With prices now at $3.50 a gallon here in California, you can bet that it will soon settle back to, oh, $2.75. And people will pay it and feel good about it, because they forget that just recently it was a dollar less than that.
And oil companies are laughing all the way to their banks in the Cayman Islands.
