Saturday, January 06, 2007

AP: "Hold Some of the Price Drop For Themselves"

It is article like this that really display the lack of economic knowledge in the world in general, and the press specifically. Here are the money quotes:
Kloza, though, said drivers shouldn't expect retail gasoline prices to drop as steeply as crude prices did this week. Many retailers were unable to pass along higher wholesale costs in December, and they'll likely hold onto some of the price drop for themselves.
Um....gasoline prices NEVER rise or drop as steeply as oil prices. In general, they follow each other, but there are dynamics far beyond translating the price of oil into the price of gas. To imply that there should be a direct, linear relationship portrays the writer's ignorance of how the economic world really works and disqualifies him or her from speaking on the subject. No wonder the story does not identify the writer. I might have to treat him or her like I treat Loren Steffy.

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