Congressional inquiry of Oil industry profits

As the inquiry is taking place, I'm curious as to everyone's opinion on the subject. Normally, I'm all in favor of the government staying the hell out of the way of business, but I think this is different. No, I don't think the oil companies have an obligation to share their profits with old and poor people, but I do think the government has some responsibility to place some limits on this particular industry. For me it is a matter of national economy and security. There is no other single industry that can so affect the nation's ability to function. It is absolutely vital that oil and gas costs do not rise so high that other businesses falter because of operating costs. If the oil companies have a completely free hand to set prices without restraint as a short-sighted money grab, even they will bring about their own downfall in the long run. The law of supply and demand would seem to dictate that wouldn't happen, but with oil being such an integral part of everything we do as a country, can we afford to take that chance?

Fire away.

 

I certainly see your points. I think the gov't should absolutely stay out of pricing/profitability on an independent free market economy, and to get involved would set a very dangerous precedent. By independent, I mean those that aren't propped up by the gov't (e.g. airlines.)

However, I do have a concern if there is any sort of collusion or anti-trust activity going on. The government has every right to regulate anti-trust behavior, and as long as their inquiry is in this vein, I don't have a problem with it.

 

My only problem with the hearings is that the Dems will probably hijack it into some kind of welfare program.

 

Explain to me how the US government can control the price of gas and oil? They can't.

First off, Exxon or any oil company on the planet other than SaudiAramco do not have the ability to control the price of oil. Exxon does not own enough of it to make a dent. They are refining at max capacity already. The price of oil goes up and down.........our ability to refine oil into products such as gas has dropped by 30% over the last 30 years and the worldwide demand for oil has risen by 25% over that same amount of time. Demand excedes supply or the ability to refine it.

Those are all things the government or any stupid windfall profit tax will not stop. It will make the problem worse like it did in the 70s when Congress did that very thing. Oil companies stopped exploring for oil.

Here is a great column on the economic principles at work here and how stupid Congressmen can screw things up even worse.

http://www.townhall.com/opinion/columns/walterwilliams/2005/11/09/174865.html

 

When the oil companies are taking in profits at record pace while consumers are paying record high prices it tells me that there is plenty of room to find ways to reduce the cost to consumers. If oil prices were so high that the oil companies were having to raise prices to stay profitable, that's one thing. This is different. There is probably no actual "price fixing" going on here, but you can bet there is an understanding between the companies to the effect of "hey, we're all making tons of money here, nobody rock the boat". Fine. I can understand that. I'm a business man, too. But when your particular industry has the ability to completely cripple the economy that feeds it, you are cutting your own throat if you continually gouge your customers. Eventually one of three things will happen: 1. They will find a new source of supply, 2. They will find a way to do without your product, or 3. They will go out of business and you will lose your customer altogether. But that's a strictly business argument. As I said in my first post, this goes beyond just business to the health of the nation. Out of control profiteering by the oil industry has the potential to bring this country to a screeching halt.

 

And there you have it. A simple solution without all of the posturing by politicians and corporate bigwigs.

 

i have noticed that i agree with everything nolimit says. he says what i would say in a way that i would say it if was not such a ranting maniac.

furthermore i think anyone who has ever been concerned about price gouging doesnt understand economics.

and independent of that, i dont really ever feel like it is my right to tell people what they should do with their things. they want to sell oil at price x at time y? fine, its their oil, not mine. and i am aware their are rare situations when this sort of sacred private property logic doesnt work, but this isnt one of them.

interfering almost always hurts things overall.

 

These oil company execs said yesterday their books are open if they want to look for gouging. They don't have to gouge........

All yesterday was was another example of Congressional blowhards wanting to get on TV berating an oil conmpany bigwhig for the voters back home. Nothing more, nothing less. Gas prices have dropped over the last month by 25%. As soon as refineries could get back up to speed, gas prices went down.

 

and even if gas prices go up, so what, why should i pay the governemnt to force oil companies to sell people gas at the price they like.

what you buy and at what price is between you and the seller. even if they decide they dont want to sell to you at all because they dont like the way you look, why should i care? mind yourself, dont make the government intervene on everything. too much collectivism!