HENDERSON: If coffee were like gasoline

September 1, 2012

LeCrone mugBoth make you go places, but they have vastly different aromas. I drink a lot of coffee. Because I travel back and forth to Bloomington, I use gasoline. Premium gasoline. That little blue streak on State Road 37 was me.

I religiously watch GasBuddy and other websites to see where the lowest gas prices are. Strangely, there are a half-dozen stations in Martinsville where prices are consistently lowest. I also add, ever hopeful, a scan of my Kroger Card in hopes that I’ve stuffed my refrigerator with enough food to qualify for the extra 10-cent-per-gallon discount.

There’s a Starbucks one light south of the target of my gasoline game. I buy coffee there.

A pound of Cafe Verona beans used to cost $9.95. Not long ago, the CEO of Starbucks sent a note apologizing for a temporary price increase because some crop in some part of the world had failed. It was also believed by the Starbucks personnel that someone had cornered the commodity exchange for beans, and was trying to become a Bean Barron.

The price per pound shot up to $12.95.

Do you think coffee drinkers drove over to Kroger and bought Folgers (at about one-fourth the price)? Would Starbucks’ lights go out because they’d hit that magic point where their addictive brew was just too expensive? Would the Frappuccino go the way of the Pontiac?

No. Last time I looked, only the economic-development-zone-placed Starbucks (darn convenient ones) had been shuttered. The price of Cafe Verona hasn’t fallen.

This is the problem: There is no fuel crisis, and the likelihood of there having been one is a sham. The recent $88-per-barrel price for crude yielded prices just over $2 per gallon on a speculative day 10 years ago.

Today, we’re paying what the market will not get upset over, just like the enormous price of coffee, whose bean prices have also collapsed.

Today, there is the meme, which is an idea that serves as a basis for various actions. The meme might be right or wrong, but it is designed to at least sound like a truism.

In the early day of escalating fuel costs, there was a long list of regenerated excuses, ranging from a burst pipeline in Nigeria to tensions in Libya.

The meme today is, the price of crude on the commodity exchanges went up. Except that it didn’t. The two prices, what you pay and the exchange price, can’t be correlated. Today, the price is goaded. Poked.

There is actual manipulation. Oil companies conveniently close refineries just in the nick of time to keep supply down, but consumers and businesses are absolutely unable to know the truth about whether the shutdowns were actually scheduled—or just timed to stanch supply and keep up the price. You may remember that prices for oil, diesel and gas went up after 9/11. Attorneys general and ostensibly elected politicians investigated, but not very hard. In 2002, any marketplace jitter would vault prices.

Today, there is no excuse. There is only a sag, followed by a Hail Mary pass of price increases with pump prices that now obey, inexplicably, by geography. Market control and memes go hand in hand. Ask your phone carrier. The sad thing: You feel good when the artificially high prices drop.

The Martinsville population’s saving grace is, they can’t pay more. Note that prices seem to get really high around general elections, as though the pumps are pushing votes. That couldn’t happen, could it?•


Henderson is managing director of ExtremeLabs Inc., a Bloomington computer analysis firm. Send comments on this column to ibjedit@ibj.com.


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