Congressional inquiry of Oil industry profits

The market on the supply side is slow to react, which can account for higher prices. Oil seems to be a demand-driven market, and has enormous barriers to entry on the supply side. So, as demand (and especially demand in the commodity markets) ratchets up, it's going to take a while for any new competition to enter the supply side.

Having said that, if these fools are colluding, I'm not too happy about it.

 

Once again, in pure business terms, I do agree with you. If a seller of any product decides to charge whatever he wants, terrific! Free enterprise! If that price makes customers not want to buy and he crashes and burns, so be it.

My main point is that this is no ordinary business. This is not Wal-Mart. This industry can affect political futures and destinies of nations (specifically ours). I'm not talking about $2.50/gallon gas, but what about $3, $3.50, $4.00? Sure it costs you more, so you don't drive as much. Then it costs your grocery store more to haul its goods, so they charge more. Then it costs the food producer more to farm his crops so he charges more. Then it costs the equipment manufacturer more to produce machinery so he charges more. Eventually, businesses will fail, jobs will be lost. Then you have the government responsible for providing for those people out of work, which in turn will cost you more in taxes. No other industy can have such a far reaching effect. Do you think the government gets oil, gasoline, jet fuel for free? Every unit in the military has to pay for its fuel consumption out of operating funds. Even in time of war, this has to be paid for, even if on some sort of deferred basis. Name one other industry that has this kind of power. In my opinion, there must be at least some semblance of oversight. I don't know what it is, but the oil industry doesn't operate in a vacuum, so to speak.

 

There is a built in incentive for Americans to back off the use of oil.

Hybrids are starting to sell like crazy and i know one of our friends who bought a prius. She is getting great gas mileage.

If and when enough of those sell you are going to start seeing the dependence on oil drop in this country.

Wait till the effect starts happening and the price of oil will come back down.

Hybrids and technology advances will eventually be the demise of these oil companies. We are talking 30 to 40 years but in our kids lifetime oil will not be as important.

 

its true nobody explicitly said they favor government controls on gouging. or maybe they did, i am not paying attention that closely. either way, they should be able to gouge you all they want.

good, i hope they make more money than i can imagine. nobody held a gun to my head and made me buy oil. however, if there were government price controls, the government would literally force me to pay to enforce them. i think it would be easier just to let people buy and sell the way they like.

whats your point. people make money on things. are you trying to make me like oil companies more?

well i guess if people get really mad and stop buying so much oil maybe they will cut prices. where is the problem again? i am sure they have analysts working on this sort of thing and we neednt concern ourselves with it.

 

i sense a "however" coming.

thats all nice. when oil prices get too oppressive, we will direct that money to something else, developing some alternative fuel. the invisible hand of the free market saves us again.

if they raised gas prices to 100$ a gallon, i am sure some newer and far superior form of energy would take over in no time. the reason it hasnt happened yet is because we dont need it yet.

 

i strongly disagree. i dont want my government stopping business from trying to make profits through collusion. you want to collude and hold prices high? be my guest. it will only hasten the alternative fuels. i know i dont want to finance some ridiculous anti trust case cluster****. i dont need protection from oil companies. i will let the free market roll.

(by my reasoning, the market consists of buyers and sellers only, not the govt.)

i cant imagine how angry i would be if i owned some sort of alternative fuel company, and i knew i was about to get rich because oil prices are getting high and opening up the market for me, but the government forced oil companies to lower costs. thats just not fair. the government should keep out of it.

 

This is typical of our government and many americans. We love capitalism until someone makes too much money for our liking.

We have become spoiled in this country. We consume energy like nobody else on this planet, yet nobody really wants to do anything about that. We want all the energy we can consume, and we want it cheap!

Someone help me understand how a windfall tax will lower energy prices? What are we going to do with those tax dollars ... subsidize the poor? If you say this tax doesn't lower prices, then isn't it nothing more than punishment for making too much money?

People should have invested a few dollars in these oil companies and they wouldn't be complaining, they would be laughing all the way to the bank like me. Where else can you get 40+% return on your money?:yelwink2:

 

Anti-trust situations are bad economically. They artificially set prices, thereby causing a dead zone in the intersection of supply and demand, which represents overall economic loss (as in, X + Y used to equal 10, now it only equals 8.)