With the recent reports of another record quarterly profits for the nation's oil companies ($40 billion for Exxon alone) how are they continually able to do this if nothing shady is going on? Martin would have you believe that it's only the reflection of a free market and in it's purest form, he's right. But given it's illegal to collude or conspire to keep prices high, these profits are just begging for a Congressional oversite hearing. If Congress wants to involve itself in issues that have nothing to do with running the government of the United States, like steroids in baseball and the burning of Patriots spygate tapes, then surely they have time to look into this, right? Even if demand is at an all time high, it still makes no sense how profits can be nearly $50 billion in one quarter. So, unless my logic is faulty (and it wouldn't be the first time), high demand equals higher costs for oil companies as well as consumers. So how are they able to make all this money? Even by passing costs on to consumers, it doesn't seem like they're profits should be that high for 3 months time. If nothing illegal is happening, what am I missing?
It's called windfall profits and they should be taxed heavily. It is understandable that the oil companies must pass on their raw material costs (expensive crude prices) to the consumers. But they also choose to profiteer and make more on a gallon of gas by taking an override on those higher prices. In other words. For the sake of argument, say a thoretical gallon of gas cost $1 with 30 cents being the cost of oil, 30 cents being the cost of refining and transporting it, and 35 cents the company profit. Then the price of crude oil triples to 90 cents. It costs the oil company no more to refine and transport it, so why does the company deserve more than the 35 cents of profit per gallon? Instead they charge their profit as a percentage on the total price of the gas, not on their costs to produce it. They are making a windfall profit because the oil countries are raising the price of oil, not because they have earned it. If heavy taxes kicked in when windfall profits were encountered, then the oil companies would have an incentive to keep prices reasonable. The reason that they can get away with making huge profits during price crisis is that their lobbiests own our politicians, especially in oil states like Louisiana. Bobby Jindal kept Blanco's Secretary of Natural Resources in office. The DNR Secretary is the official in charge of regulating the oil and gas industry in Louisiana. Both Blanco and Jindal were told who to put in that position by the oil industry, who competely own DNR and the legislature as well. Right now they have an oil man in the White House and they don't care that consumers are being hit hard while big oil makes unprecedented record profits. In fact they received tax breaksfrom the Bush administration "to help the economy" and they are asking for more.
It is not illegal for a company to make profits no matter how large they are. If the people continue to pay it's our own damn fault.
Electric. Hybrid.. Majority of people probably don't drive more then 30-50 miles daily. Plenty of power daily.
Most businesses I know of do exactly that every day. Profits are not based upon a fixed amount, it is usually a marked-up percentage of your own costs to produce the goods you sell. That percentage may be adjusted periodically as market conditions dictate, so profit goes up or down. Normally, the largest factor in profit margin has to do with your competition. If company "A" sells a product at a certain price level, and then company "B" sells a comparable product at a lower price, then "A" must reduce their profit margin to compete (or reduce costs). The key is competition in a free market. I believe this is where arguments like Martin's fall apart. Is it a true "free market" when the major producers fix pricing levels? What would happen if Shell decided to gain market share by lowering their profit margin in order to increase sales? In most markets this is a common occurance, but you never seem to see this concept applied to the oil industry.
The cost benefit of a hybrid is so small that it is impractical for most drivers. Electric cars are not readily available not is the infrastructure to support a mass switch. Again the cost benefit is so low that they don't represent an alternative.
