What are you talking about. Lets consider a person who makes $10/hour and works 40 hours a week. That works out to $400/week. If gas goes from $2.5/gallon to $3/gallon and they consume say 40 gallons that is $0.50 x 40 or about a $20 increase. That is only 5% of this guys (gross) salary/wage.

To get a 20 to 25% decrease the increase would have to be 4x or 5x as large. That is an increase of $2/gallon to $2.50/gallon.

Also, if we have a higher wage rate, then the implicit wage decrease is smaller.

I won't pay $ 9.00 to go see a movie and I will not support a bunch of so called actors, who make far to much, and see their movies. I have a choice not to support them, but I still have to drive to the grocery store and I still have to drive for a number of reasons. I have cut way back on my driving because it just cost to much for gasoline. No matter how you feel about it, gasoline is like the telephone and an automobile. They have become and are a necessity in to days mobile society. To much is having the ability to pay out 400 million as a retirement package and over 320 billion in 3 years of profit. Also, the drug companies fall into the same category.

Steve:

When one takes a 20 to 25% wage cut, it hurts. When a working guy with a family takes such a cut, it can be disastrous. The pres ent cost of gasoline equates such a wage cut. I don't give a tinkers damn about economic theory's or this trumped up supply and demand excuse. The fact is that the average working American is feeling the pain much more that the fortunate people who earn enough to pay these high prices. and I don't care whose fault the high prices can be attributed. There is plenty of room for that everywhere.

If people on the east coast and the west coast, who have to pay high prices for almost everything would ever get into the heart of America and really see what the people think of the high prices, you would have an entirely differeat perspective.

Meanwhile the Democrats are reportedly considering a Reaganesque policy of cutting gas taxes.

That dang stopped clock better get a move on or it's gonna lose the race.

The profit margin for pharma companies is over twice as much as oil companies...so exactly what is a "reasonable" profit margin? Zero or negative?

As for the pharma companies and price fixing, no kidding, but that is legal. They are granted temporary monopoly status after all.

Russell,

Well, they oil companies wont necessarily be able to pass on the full amount of the tax. The reason has to due with the slope of the demand and supply curves. The oil companies will take a hit, but so will consumers. So qualitatively you are correct, but quantitatively your missed by a little bit.

Why is it that people don't think the theaters are price gouging when they charge $9 to sit an watch a 90 minute movie with stars making $20 million for a few months' work?

We can now see why we are paying through the nose for drugs and gasoline. I heard on the news today, that the Oil Companies made over 320 Billion in profit since 2001. A Fair pro fir is fine, but we are real ly gouged at the pump. And we are the victims of "Price Fixing" by the 5 major oil companies. (The 5 control 60% of the Oil).
As for the Drug Companies, they to are a Price gouging, price fixing bunch of greedy rear ends also, and Congress did not want to negotiated with them on drug priced for the Prescription Drug Plan that is so far costing the taxpayer over 800 Billion dollars.

We can now see that all that lobbying money is being spent on Congress, is nothing more than a "Payoff".

Sir Winston was almost right, and would today say, "Never has so many done so much for so few

The problem, as I pointed out on my own blog, is that $100 million per day for sixty days = $6 billion, the exact amount they plan to (effectively) raise the oil firms' taxes by. The idea that these companies are going to just swallow $6 billion in taxes rather than do the obvious and pass it right back to consumers is ludicrous - and proves once more that our elected leaders don't understand the first thing about basic economics.