Wednesday, November 09, 2005

Gassy Politicians

Since when did Republicans start criticizing profit? Yet another sign that the party has lost its way! The prices of oil and gasoline are subject to market forces. If the situation were as the politicos described it, the price of gas would never go down as it has in the last month or so. Houston would not have been a state of serious depression (see the 1980s), as it was when the price of oil plummeted.

Want cheaper gas? Buy less of it or grab a drill and some gloves and start producing your own at the *real* cost and steal customers away from the other players.

16 comments:

Cato said...

When people start hurting economically, big corporations (especially those related somehow to foreigners) are always easy targets. Populism and demogoguery aren't limited to either party, and I'm not at all surprised that politicians across the board are jumping on the bandwagon.

Waldo said...

This talk of raising taxes on oil is the worst thing that could be done. Do people honestly think that if we raises taxes on oil corporations that we will be better off. Companies do not just absorb costs, they pass them on to the consumer. If anything we need to be encouraging oil companies to expand (especially within our own borders) so that production can be increased. Why can't people understand the simple laws of supply and demand.

PubliusRex said...

I agree with Cato...it's all a dog and pony show so that these pols can grandstand.

Orrin Johnson said...

I actually disagree with Publius a little bit on this one. (Stand by for him to call me a "hippy in a business suit".) Oil is a necessary commodity. If I'm getting gouged for a CD, I don't have to buy CDs. But gas is a necessity, not just for people and their cars, but for police, fire, military, shipping, etc. And high gas prices, due to the increased cost of shipping items, can lead to dangerous inflation.

As such, I'm OK with investigations into increased profits by the oil companies at a time when they at least should keep them steady. I'm fine with oil tycoons getting rich, but rasing prices in times of national crisis is profiteering and is an appropriate place for the government to investigate and/or regulate.

Having said that, I agree completely with waldo that a "profit tax" or whatever is just stupid (since they'd just raise the prices to cover it anyway). I also agree with the supply and demand thing, and I don't really mind the higher prices so long as there is no evidence of collusion.

This will probably doom any chance I'll ever have of running for anything, but I'm actually OK with higher gas prices. The more incentive the market has to develop alternatives, the better off we all are - both environmentally, economically, AND expecially with regards to national security.

Orrin Johnson said...

I add that I don't disagree that it's 90% grandstanding. But let's be honest - the people don't vote for politicians who don't do a little grandstanding.

PubliusRex said...

You want to regulate oil/gas prices? Go right ahead. Just don't complain when you're waiting in line at the gas station because supply is falling short of demand. It will be a political nightmare.

Don't believe me? Ask Jimmy Carter's 1980 campaign manager.

PubliusRex said...

Question for Orrin. What is the the "proper" amount of profit?

Orrin Johnson said...

I don't want it regulated a la' Jimmy Carter. I want a closer-than-usual eye kept on perveyors of necessary commodities to guard against monopolistic profiteering and gouging. Unlike most ventures, they have a built in risk-prevention business. It's only fair that with that absence of risk, and the CHOICE they make to deal in such commodities, that they accept hightened scrutiny from the public.

How dare you. Jimmy Carter. That's way worse than "Hippy in a business suit."

PubliusRex said...

Nobody is claiming that they're monopolies though.

The complaint is just that they're making too much profit. How much profit is too much? What do you say to the fact that gas prices have descended recently?

Orrin Johnson said...

There you go again.

To answer, if after the investigation is complete, and there is no evidence of any kind of collusion, then fine. It's just fishy that they ALL would be posting record profits when they did, that's all.

So long as there's no monopoly, de facto or otherwise, then whatever they made is fine with me.

PubliusRex said...

That is a complete retreat. If there were any validity to the gloss that this is all about collusion, federal prosecutors, not senators would be asking the questions.

SirWhoopass said...

Orrin had it right when he (finally) got around to the monoploy and collusion argument. Publisrex is correct that we do not want anything to do with price regulation at the consumer level. That is the sure route to shortages.

Few industries get hit with a major disruption to their supply and distribution facilities and then wind up with a bigger profit.

I'm not saying that something improper did occur, merely that the increased profits after a major disaster deserves to be investigated. I'm guessing that nothing improper occured. The reason it is being done by senators is to score points with the people back home.

That senators and the press are making a big deal out of something that could be handled another way... that shouldn't surprise anyone.

Orrin Johnson said...

A lot of State Attorneys-General are doing just that. And while I don't share the far-lefty view that oil companies ar inherently evil, no one can deny they're an extremely powerful interest with wide-ranging public impact. Bringing in the big guns for findings of fact is appropriate.

PubliusRex said...

I'd like clarification of exactly what you are suggesting that the oil companies are doing that is illegal?

Or is it just that you find high profits morally questionable? Again, how much profit is too much profit?

curious said...

Just get rid of all the subsidies (tax-based, etc etc) and see what the market does.

Derek said...

That's about right Curious...get rid of the billion dollar tax breaks. Let corporations make as much money as they can.