O's Oil plan: Get ready for gas at $7 per gallon

[sepe]

If the oil companies didn't sell their product where they could make the most money, our gas would be more expensive, not cheaper.

If you don't understand that, you don't have the economic foundation to be in this discussion. You have the RIGHT to be in the discussion, but what you add is not of use, if you don't understand that basic principle.

I had this argument with my Mom, who is a leftie, about the drug companies. Her argument was that drugs are expensive here (btw, they're not) because the drug companies spend all this money advertising on TV, in expensive time slots like the Super Bowl. She couldn't grasp that advertising brings down the cost of drugs, it doesn't raise it.

It's called "opportunity cost" and if you don't get it, feel assured that you're like the vast majority of people out there. Also know that you don't understand this well enough to have a useful opinion.

I don't believe I said I have a problem with them going after the highest bidder. If you can point out where I did, wonderful. If not, stop being a d-bag.

 

[IndyBeerman]

I had this argument with my Mom, who is a leftie, about the drug companies. Her argument was that drugs are expensive here (btw, they're not) because the drug companies spend all this money advertising on TV, in expensive time slots like the Super Bowl. She couldn't grasp that advertising brings down the cost of drugs, it doesn't raise it.

Sorry to tell you this, but drug prices here in the States are high.

If I was to buy ActoplusMet without insurance here in the US for a 30 day supply it would be $365.00, for the same 30 day supply by the same original manufacturer of the drug, bought in Canada, it would be $192.00.

I don't know about you, but $173.00 cheaper is a lot of money.

Our Health system is great, Canadians come here for it, they get their drugs still in Canada because it's way cheaper.

Matter of fact there has been tons of stories of our seniors taking busloads of them across into Canada to purchase there cheaper.

Also, I want to see the study where advertising does not affect the cost.

I can give you a direct relationship to that from car advertising.

Two Vehicles, a 2008 GMC Envoy SLT and a 2008 Isuzu Ascender Luxury model.

Both vehicles are equipped exactly same because they rolled off the assembly line in Moline Ohio together, yet the GMC is stickered out at 38,777.00 and the Isuzu is 34,800.

GMC had no incentives for it, and even with a GM discount, it only comes down to 36,277.00.

BUT

The Isuzu which has virtually no advertising program tagged to it gets these cuts...

9000.00 Factory Discount
3000.00 Dealer Discount
and
2250.00 additonal discount by the dealer for a total cost of $20,550.00 and that's after GM made their profits off of it before selling it to Isuzu.

That's $15,000, you stop all the TV commercials and brand advertising and the price comes down immensely.

So don't tell me that by mass advertising the drugs out there, lowers the price, it doesn't.

They do that mass advertising so that when you, and everyone else goes to the doctor with a specific problem, they ask about that drug. It drives their profits up.


Sorry for the thread Jack, back to our regularly scheduled thread.

 

[dross]

I don't believe I said I have a problem with them going after the highest bidder. If you can point out where I did, wonderful. If not, stop being a d-bag.

I couldn't tell whether you had a problem with it or not. I know some people DO have a problem with it. I often take a post and use it as a springboard to make a point I want to make.

Note my careful use of the word "if" and you'll see that you had the choice whether to take it personally or not.

As to being a d-bag, I can only assume "d" stands for delightful, and based on that I certainly will not stop.

 

[ryknoll3]

Sorry to tell you this, but drug prices here in the States are high.

If I was to buy ActoplusMet without insurance here in the US for a 30 day supply it would be $365.00, for the same 30 day supply by the same original manufacturer of the drug, bought in Canada, it would be $192.00.

I don't know about you, but $173.00 cheaper is a lot of money.

Our Health system is great, Canadians come here for it, they get their drugs still in Canada because it's way cheaper.

Matter of fact there has been tons of stories of our seniors taking busloads of them across into Canada to purchase there cheaper.

Also, I want to see the study where advertising does not affect the cost.

I can give you a direct relationship to that from car advertising.

Two Vehicles, a 2008 GMC Envoy SLT and a 2008 Isuzu Ascender Luxury model.

Both vehicles are equipped exactly same because they rolled off the assembly line in Moline Ohio together, yet the GMC is stickered out at 38,777.00 and the Isuzu is 34,800.

GMC had no incentives for it, and even with a GM discount, it only comes down to 36,277.00.

BUT

The Isuzu which has virtually no advertising program tagged to it gets these cuts...

9000.00 Factory Discount
3000.00 Dealer Discount
and
2250.00 additonal discount by the dealer for a total cost of $20,550.00 and that's after GM made their profits off of it before selling it to Isuzu.

That's $15,000, you stop all the TV commercials and brand advertising and the price comes down immensely.

So don't tell me that by mass advertising the drugs out there, lowers the price, it doesn't.

They do that mass advertising so that when you, and everyone else goes to the doctor with a specific problem, they ask about that drug. It drives their profits up.


Sorry for the thread Jack, back to our regularly scheduled thread.

The reason drugs are cheaper in Canada is because the government imposes price controls on them. That works great for Canada because they have our country's "more free" market to eat up a lot of the R&D costs associated with bringing a drug to market. If the US had the same price controls on the drugs as Canada did, we'd see FAR fewer drugs come to market, because the drug companies would not be able to recuperate their R&D costs selling at a fixed price.

There's no way a GMC vehicle has $14,000 tied up in advertising in each vehicle. I don't know the exact reason for the price difference, but advertising isn't the whole difference. It may be that the advertising and brand loyalty drives the demand higher for the GMC and GM can consequently ask more for them.

 

[24Carat]

The reason drugs are cheaper in Canada is because the government imposes price controls on them. That works great for Canada because they have our country's "more free" market to eat up a lot of the R&D costs associated with bringing a drug to market. If the US had the same price controls on the drugs as Canada did, we'd see FAR fewer drugs come to market, because the drug companies would not be able to recuperate their R&D costs selling at a fixed price.

There's no way a GMC vehicle has $14,000 tied up in advertising in each vehicle. I don't know the exact reason for the price difference, but advertising isn't the whole difference. It may be that the advertising and brand loyalty drives the demand higher for the GMC and GM can consequently ask more for them.

If Big Pharma actually developed medications that cured people rather than just treating symptoms they would be providing a viable product worth the costs. If they cured disease they would be cutting their own throats.

 

[IndyBeerman]

There's no way a GMC vehicle has $14,000 tied up in advertising in each vehicle. I don't know the exact reason for the price difference, but advertising isn't the whole difference. It may be that the advertising and brand loyalty drives the demand higher for the GMC and GM can consequently ask more for them.

You give me 4 different center caps for the wheels, 3 Envoy nameplates, a GMC cover for my driver air bag and 1 GMC grill badge and replace every one of those for my Isuzu Ascender related items, and you have sitting there in front of you a GMC Envoy.

General Motors made the Isuzu Ascender for Isuzu, it's just a rebadged Envoy.

How many vehicles did GM sell in 2011? 8,476,192

How much did GM spend for advertising in 2011? 4.26 billion

That's $5026.00 in advertising for each vehicle.

The higher price the vehicle is, the more the mark up is to make up for the lower profiting products.

Stop and think how much affordable that new car would be if they scaled back advertising some.

My point is, advertising is a HUGE expense that's tagged onto the final price that the consumer ultimately ends up paying for.

There are tons of needless drug ads ran out there because you yourself can not directly purchase it, but they do this to put it into your head and you end up asking your doctor about it. End result, higher cost.

 

[dross]

Sorry to tell you this, but drug prices here in the States are high.

If I was to buy ActoplusMet without insurance here in the US for a 30 day supply it would be $365.00, for the same 30 day supply by the same original manufacturer of the drug, bought in Canada, it would be $192.00.

I don't know about you, but $173.00 cheaper is a lot of money.

Our Health system is great, Canadians come here for it, they get their drugs still in Canada because it's way cheaper.

Matter of fact there has been tons of stories of our seniors taking busloads of them across into Canada to purchase there cheaper.

Also, I want to see the study where advertising does not affect the cost.

I can give you a direct relationship to that from car advertising.

Two Vehicles, a 2008 GMC Envoy SLT and a 2008 Isuzu Ascender Luxury model.

Both vehicles are equipped exactly same because they rolled off the assembly line in Moline Ohio together, yet the GMC is stickered out at 38,777.00 and the Isuzu is 34,800.

GMC had no incentives for it, and even with a GM discount, it only comes down to 36,277.00.

BUT

The Isuzu which has virtually no advertising program tagged to it gets these cuts...

9000.00 Factory Discount
3000.00 Dealer Discount
and
2250.00 additonal discount by the dealer for a total cost of $20,550.00 and that's after GM made their profits off of it before selling it to Isuzu.

That's $15,000, you stop all the TV commercials and brand advertising and the price comes down immensely.

So don't tell me that by mass advertising the drugs out there, lowers the price, it doesn't.

They do that mass advertising so that when you, and everyone else goes to the doctor with a specific problem, they ask about that drug. It drives their profits up.


Sorry for the thread Jack, back to our regularly scheduled thread.

Your assumption about drug prices is that because you can buy drugs in Canada cheaper than here, that drug prices here are high. The fact is that drug prices in Canada are low, artificially low.

For example, Wal Mart sells some items at a loss. They actually lose money on those items. Another company might have a very low price on the same item, but if Wal Mart sells that item below cost, Wal Mart will be lower. In no way does that make the price at the other store, "high."

As to advertising affecting the cost, I'm talking about an economic principle. You have no way of knowing the assertions you made above. You don't have enough information about the two models of cars and their costs, and what went into the decisions that led to the prices of those two cars to come to the assumptions and conclusions you're coming to.

It's possible in a specific instance for advertising to raise the price of something. There's no doubt it raises the cost of the item. If I spend money on advertising for one product, and don't spend it for another, I will most certainly spend less making the one without advertising. But that's only a very small part of the picture.

It's an ironclad economic principle that if I raise the price of something, I'll reduce the demand. That doesn't mean that I might raise the price and have demand increase. If it does, though, I'll know that other factors came into play that had a larger influence than my price increase.

One more thing to think about. If I were to put a ton of gravel into my truck, then weigh my truck, I'd get a number. If I picked up a pebble and through it in the back of my truck, did I add weight or reduce weight? Of course I added weight. It would be impossible to add a pebble and not increase weight, right? Yet I might weigh my truck again and the scale would register less than it did the first time, even though I added a pebble.

Economics is like that, though to follow the analogy out, I might add a boulder to my truck and the scale would read less. It's a pure fact, though, that I added weight.

 

[jd4320t]

If Big Pharma actually developed medications that cured people rather than just treating symptoms they would be providing a viable product worth the costs. If they cured disease they would be cutting their own throats.

This makes me laugh as I do everytime I read something like it.

 

[Sanguine Samurai]

Recently I heard of a poll that came to the result that some 52% of Americans felt that the president could do more than he is doing at the moment to control gas prices. Who conducted the poll and where I heard or read about it I can not recall at the moment, probably INGO or the news. To the best of my knowledge controlling the price of fuel was not the responsibility of the president (or the other three branches of government for that matter) as permitted buy the Constitution, so 52% of said "Americans" are either ignorant or just plain dumb.

We can set around pointing fingers at scapegoats such as the government or the big bad oil companies all day, but no relief will ever come until we blame who is really at fault for high gas prices... ourselves. Like my mom always used to say when my sister and I were young, "when you point a finger at someone there are three more fingers pointing right back at you". Gas prices keep rising because we keep paying for it. It is textbook supply and demand. The more demand for a product the higher the price becomes. Buy less or none of that product and the price goes down, simple as that. As long as we continue to buy gas at ridiculous prices the more ridiculous those prices will become. Give an inch and they will take a mile, rather, give a cent and they will take $4+. Who am I to blame everyone? I am no one in particular and just as much to blame. Not to mention, the less fuel we use now the more there will be in the future. People claim to be Conservative but when it actually comes to conserving something it is like trying to get a monkey to solve a crossword puzzle.

 

[Sanguine Samurai]

The same rule and blame are applicable for all petroleum products.

 

[IndyBeerman]

As to advertising affecting the cost, I'm talking about an economic principle. You have no way of knowing the assertions you made above. You don't have enough information about the two models of cars and their costs, and what went into the decisions that led to the prices of those two cars to come to the assumptions and conclusions you're coming to.

Do you know what a 2004 Honda Passport LS is?? It's a 2004 Isuzu Rodeo LS, the only difference is replacing Isuzu with Honda and Rodeo with Passort. You take any part off of the Passport and it will fit on a Rodeo because they both came off the same assembly in Lafayette, IN

It is the same EXACT vehicle, the same as above with the GMC Envoy and Isuzu Ascender, with the exception of having the 2008 Buick Rendezvous fender flairs and the Trailblazers driving lights on the Isuzu. There is virtually less than $100.00 difference on the cost to make them.

There are no assumptions, my father in law used to be fairly high on the food chain with GM, even though he has been retired for 15 years (@ 55) he still knows a lot of what is going on.

Now, here's a 2008 article that states what pharmaceutical companies in the US spent % wise Advertising vs. R&D

The U.S. pharmaceutical industry spent 24.4% of the sales dollar on promotion, versus 13.4% for research and development, as a percentage of US domestic sales of US$235.4 billion.

Big Pharma Spends More On Advertising Than Research


That's a huge amount of money spent for marketing vs R&D.

R&D can not be blame on the high cost when almost twice as much is spent in advertising.

Sorry back to our regularly scheduled to darn high gas prices.

 

[IndyBeerman]

Like my mom always used to say when my sister and I were young, "when you point a finger at someone there are three more fingers pointing right back at you". Gas prices keep rising because we keep paying for it. It is textbook supply and demand. The more demand for a product the higher the price becomes. Buy less or none of that product and the price goes down, simple as that.

Not true in this case, gas demand has been going down and I believe it has the last 2 years.

It is not the textbook supply and demand that is causing this.

Pure profit & greed is causing this, nothing else.

So until something is introduced to stop the upward spiral (like the opening of new offshore drilling and locations like ANR) it's going to keep on.

Heck the simple completion of the Tar Sands pipeline would/could drive down prices.

Heck two years ago crude prices was roughly 81.88, today they are 106.67, gas was 2.82 and today it is 3.79.

There is no shortage, what oil that Iran is not selling is being held up with Saudi Arabia making up for it, there are plenty of reserves because use is down. So the supply and demand thought process does not work for this.

 

[24Carat]

This makes me laugh as I do everytime I read something like it.

Please expound where you find humor in such a sick perverted system.

Does it have anything to do with the 100,000 deaths and 300,000 medical misadventures caused by Big Pharma medications each year?

 

[jd4320t]

Please expound where you find humor in such a sick perverted system.

Does it have anything to do with the 100,000 deaths and 300,000 medical misadventures caused by Big Pharma medications each year?

Start a thread about it and I will gladly contribute.

 

[dross]

Do you know what a 2004 Honda Passport LS is?? It's a 2004 Isuzu Rodeo LS, the only difference is replacing Isuzu with Honda and Rodeo with Passort. You take any part off of the Passport and it will fit on a Rodeo because they both came off the same assembly in Lafayette, IN

It is the same EXACT vehicle, the same as above with the GMC Envoy and Isuzu Ascender, with the exception of having the 2008 Buick Rendezvous fender flairs and the Trailblazers driving lights on the Isuzu. There is virtually less than $100.00 difference on the cost to make them.

There are no assumptions, my father in law used to be fairly high on the food chain with GM, even though he has been retired for 15 years (@ 55) he still knows a lot of what is going on.

Now, here's a 2008 article that states what pharmaceutical companies in the US spent % wise Advertising vs. R&D

Big Pharma Spends More On Advertising Than Research


That's a huge amount of money spent for marketing vs R&D.

R&D can not be blame on the high cost when almost twice as much is spent in advertising.

Sorry back to our regularly scheduled to darn high gas prices.

I believe you that these are the same vehicle. This is irrelevant to this discussion, as is how much do drug companies spend on advertising.

Let's take a business, any business. A business must recover all its costs. It also must make enough profit to justify the use of its capital and assets. The business must make Cost + Profit and this amount must be greater than the percentage the same investment of capital could produce somewhere else.

When a company is publicly traded, you add another element. Now you're also competing on the stock market. You're competing for investment dollars from other people, not just competing for your customers' dollars.

If I'm making a profit, but not enough of a profit to justify the use of all those assets and keeping my stock price at a decent level, I'm still failing.

If I don't advertise, I won't sell as much. If I don't sell as much as I can over here, something else must carry the load over there.

If I don't sell a lot of a drug that will be used widely like cold medicine, I won't make up for the money I'm losing on some rare cancer treatment.

In the oil business, if I don't take advantage of getting the best price possible, I'll have to raise the price somewhere else, even if I'm already making a profit somewhere else, because I have to make enough to justify the investment, not just enough to cover my costs.

So, not making the available money where I can will cause me to raise prices somewhere else.

Cost is not directly related to price, except in the most simple way.