In Congress, Democratic lawmakers said the sky-high profits reflected misplaced policies by the adminstration of George W. Bush.
"Americans are paying near-record gas prices, oil companies are reaping billions in profits, but the response from the Oil Men in the White House and the Republicans in Congress has been billions for Big Oil and a backhand to the American people," Senate Democratic leader Harry Reid said Thursday.
"It would be shocking in normal times, but it is standard procedure for Republicans in Washington."
I've almost given up reading stories like this. Out come the social justice and the social contract and the social responsibility johnnies. Truly, it's as if these clowns -- who know better, believe me -- want people to believe that Exxon-Mobil's $10.7 billion quarterly profit has all been piled in a huge vault somewhere with an open top, like Scrooge McDuck's money hoard. Then the executives of the company strip down to their BVDs and swim in it and rub the $100 bills over their paunchy, middle-aged, white northern European bodies.
I swear that's what comes to mind when some people see the headline "Obscene Oil Company Profits". There are those fat cats diving into a tub of money, and then spending it on mink coats for their trophy wives, fast cars that they don't deserve, and filet mignons at fancy-schmancy New York restaurants.
Enough, already! The 10th Commandment says "Thou shalt not covet". Old Moses knew what he was about. It is human nature to covet and to wish ill on those more prosperous than we are. But isn't the entire history of the human race enough to show us that we should get over our jealousies and grow up? I just wish the 10th Commandment could be amended to say: "Thou shalt not covet. Thou shalt buy as much oil stock as thou can lay thy hands on." Now that's a Commandment with some relevance!
And something else: that enormous Exxon-Mobil profit represents just a few cents out of every gallon of gasoline sold. Do you happen to know how much of that gallon of gasoline is excise taxes? In Wisconsin it's about 43 cents. I'd say that if the politicians have really got their g-strings in a gordian about gouging the consumer then they oughta consider cutting the gasoline tax!
And the Europeans! Holy cow! According to MSNBC, in the Netherlands the actual cost of a gallon of gasoline before taxes are tacked on is $2.61 (as of April). But after a 158% tax, the pump price is $6.73! Who's gouging whom?
Yeah, but it's them greedy oil executives, that's what it is!
11 comments:
Somewhere tonight I read that Exxon-Mobil's profit margin is a modest 10%ish. Which ain't bad but it's not, you know, great.
Brian,
I appreciate the additional weight you lend to my point.
I haven't seen any report that details how many cents out of every gallon of gasoline sold goes to the oil company in profit. I wish I had; it would make the comparison to excise taxes all the more stark.
Did you see the calculation I did of the recent price of petrol in Britain? It was $6.75 a gallon...of which about $4 is taxes. What do you think the reaction of the American consumer would be to, say, a doubling of the current excise tax?
Steve Erbach
The Town Crank
The reaction? Get a rope.
But no. We'd like to think so, but I don't think it will happen. Taxes are like slow boiling a mythical frog in a pot. Slowly raise the temp and the frog doesn't mind.
Yes, metaphor. But if you'd asked, say, Joe Consumer if they'd stand this level of taxation before they introduced the idea back when they'd probably be aghast.
You have to work HOW many months of the year to pay your taxes? And you've not hung the bastards yet? Milk-sops the lot o' ye.
Although if raising taxes on my gas meant lowering the burden in another area .. I might go for that. But that's me - my current job is two miles from the house. And that's another benefit of living in a small town - nothing is really that far from anywhere else.
Brian,
I live just a mile-and-a-half from work here in Neenah, so I know what you're talking about. My wife drops me off and picks me each day; a grand total of six miles of commuting per day, 30 miles per week.
You have to wonder, though, how it was that the Europeans managed to raise their gasoline taxes so high. Didn't anybody protest? I mean, sheesh! 158% of the cost of the gasoline in the Netherlands. Didn't anybody raise a ruckus when the tax went, say, beyond the 100% mark? I mean, we at least grumble when stamp prices go from 37 cents to 39 cents. Are the Dutch that much more meek than we are?
» Milk-sops, the lot o' ye! «
Aye, lad! An' I be hopin' that when those lubbers in Congress get to raisin' that there gasoline excise tax, d'ye see?, that we be givin' a good account of ourselves by boardin' their stinkin' ship o' state, raisin' the jolly roger above the capitol dome, and sailin' away with the loot wots been plundered from us!
Steve Erbach
The Town Crank
Are the Dutch that much more meek than we are?
You know better than that - they've simply bought into a different social program than we have - that cradle-to-grave caretaking is the government's job.
And depending on the time and place, it can be a valid model.
Brian,
» You know better than that - they've simply bought into a different social program than we have - that cradle-to-grave caretaking is the government's job. And depending on the time and place, it can be a valid model. «
I have complete confidence that you'd be unable to name that time and place!! The Europeans -- and us, to a large extent -- are content to ride the Ponzi scheme for as long as it props itself up.
Steve Erbach
The Town Crank
The Europeans don't complain because they view travel so differently, and they have better public transportation -- and for those taxes they receive services that they're not willing to give up -- it's a trade off and they know it. Right now, we're paying between $100 and $150 a week in gas, just so Bill can work -- not good, not good at all. So, talk about just 10% profit, for the consumer, gas has doubled in less than 2 years. If you want to scream about taxes, look at your phone bill -- my GOD, talk about robbers and thieves.
Susan,
» ... they receive services that they're not willing to give up -- it's a trade off and they know it. Right now, we're paying between $100 and $150 a week in gas, just so Bill can work -- not good, not good at all. So, talk about just 10% profit, for the consumer, gas has doubled in less than 2 years. If you want to scream about taxes, look at your phone bill -- my GOD, talk about robbers and thieves. «
Sounds like a 10th Commandment issue to me...
As a famous ex-President once said, "I feel your pain." What I'm not following is your reaction to government hauling in excise taxes on gasoline hand-over-fist -- whether it's for services or not -- versus publicly-held companies making profits from products that aren't forced on anyone. I mean, if taxes aren't paid there's big trouble for the non-payer. But there ain't much that consumers can do about the tax burden.
It may seem that consumers are in the same boat with having to pay higher and higher prices for gasoline and I understand the anger of the consumer. I suppose that's what Congresscritters are for: to listen to the troubles of the people and apply the healing balm of government regulation where appropriate -- or where it won't show too much.
So, are we to have a "windfall" profits tax again? Will that make everybody feel better?
I'm sorry that you and Bill are personally affected by these prices, I really am. I imagine that you wish fervently that something would happen that could make the Arabs drink their oil and the oil company fat cats fry in their own oil.
I think that it's very public-spirited of the oil companies to take the public relations flak for this. Congress must be relieved that their own criminal ineffectiveness can be hidden by their posturing over high gas prices and obscene oil profits. Oil company execs are such convenient bogey men.
But they're not the problem, are they? Huge oil company profits are not the cause of high gas prices. We're not controlled by corporations. We control ourselves ... at least we should.
Steve Erbach
The Town Crank
Here in Kentucky, the Attorney General is looking into price gouging with two companies. Now, whether that's because it's really happening, or he's just making himself look good, I really don't know. I've listened to you guys spout the economics of the issue, but when Americans can no longer afford gas to get to their jobs, what then? When we're buying gas insead of other consumer goods, what then? Innovation? Perhaps, but I'd rather support a variety of merchants than just the gas company, and that seems to be the route that we're heading -- at least in my family. This is bigger than just gas, and it isn't just one industry -- yes industry suffers, it innovates, it adapts, it becomes more efficient -- that's not what's happening -- it's in reverse -- the average consumer is having to adapt and become more efficient -- which is actually good as far as conservation is concerned, but when all your money's going to buy gas so you can work so you can buy more gas... that's going to touch everything -- literally everything. It's a tad pollyannish to think it's just capitalism at work and it'll all recover eventually, but I hope you're right.
I have complete confidence that you'd be unable to name that time and place!! The Europeans -- and us, to a large extent -- are content to ride the Ponzi scheme for as long as it props itself up.
Sweden, early 20th century.
Sweden bought into the Socialist thing whole-hawg then. The cradle to grave thing worked quite well for reaons that might be hard to duplicate outside of Sweden.
Then late 50s, early 60s the guys in power had forgotten that the social thing only worked as long as industry was around to support it, they fiddled with the experiment and drove their industry (and the taxes) out of the country. Other unwise laws were passed. Things went downhill after that.
Which may be an example of a ponzi scheme running out of gas, but had the guys running the show not monkeyed unwisely Sweden might still be an example of Socialism that works.
Source? Criminy it's late. I became interested and read a few articles and think pieces back when. I'm certainly no expert on the subject.
Somewhere else socialism _might_ work are the orbital habitats and colonies we'll see a-building over the next century.
Certainly it will be tried there. We'll have to just keep an eye on them and see what happens. Me, I'll bet on the free-market habitats over the Socialist ones.
Susan,
Three-and-a-half years ago when Gulf War II began a local oil company that owned a passel of service stations raised its gas price to $2.95 a gallon right away. Prices rose everywhere else within a short time, too, but not to that degree. The owners of the stations apologized shortly afterwards after the squawking got really loud. I believe that the company donated some of its income from that period to charitable causes or something.
The main principle us "guys" who "spout the economics of the issue" emphasize is that the supply of a commodity isn't improved by price controls. No matter what the price of an item is, those with more dough are going to be able to buy more than those with less. If the government steps in to subsidize the price of gasoline, all that will mean is that those that don't need to buy as much gas will be paying for those that need to buy more -- through increased taxes, of course. Besides that, the supply will evaporate more quickly because that's what happens with price controls -- that is, price controls on the highest price that can be charged; a price ceiling.
It's happened before with gas. Gas waiting lines and filling stations with no gas. Price fluctuations are the only effective way to control the consumption of an item with limited supply. There isn't any combination of circumstances in which the price of gas can be throttled back by government fiat or subsidy without the supply of gas draining to zero.
As far as buying gas instead of other consumer goods, yes, that is the short-term result. The somewhat more medium-term result is that more fuel-efficient cars will be sold. The long-term result? That's a bigger question. A lot depends on how much pressure the politicians feel and whether they have enough cojones to do the right thing rather than the politically expedient thing. I'll leave as an exercise for the student the likely outcome of that particular internal struggle.
It has been said that oil deposits that require more expensive extraction methods will become more attractive to the oil companies to develop as the price of oil rises. I'm not really convinced of that since the profits the oil companies are making now are certainly not guaranteed and they're not that big on a percentage basis. Allowing more wells to be drilled in certain wilderness areas would be a decent medium-term tactic...but ask yourself if the caribou huggers would stand for that. Correct me if I err, but the global warming and conservation johnnies would rather see us run out of oil altogeter than to see oil wells drilled in ANWR. But barring new drilling how else are we to become self-sufficient in terms of oil?
» This is bigger than just gas, and it isn't just one industry -- yes industry suffers, it innovates, it adapts, it becomes more efficient -- that's not what's happening -- it's in reverse -- the average consumer is having to adapt and become more efficient -- which is actually good as far as conservation is concerned, but when all your money's going to buy gas so you can work so you can buy more gas... that's going to touch everything -- literally everything. «
What you're saying about the consumer having to adapt is what the consumer does all the time. I'm not just talking about gasoline. It's every consumable item available. One only has so much money to spend. Either one buys that new car or one buys that vacation home or that recreational vehicle or that boat...
Again, stop me if I've misinterpreted something here, but you write as if everybody up to now has had enough money to supply all of their needs. It's just since gasoline has doubled in price that people have had trouble.
You said yourself that people in Europe have made the choice to fund public transportation through incredibly high gasoline taxes. "It's a trade-off and they know it." I put it to you: do we not make a conscious trade-off ourselves? The idea in this country is that the things people want will be provided either through individual effort or through the collective effort of a community or of the state or country as a whole. The Europeans have decided to chase the phantom of cradle-to-grave social security. The decisions we've made here are leaning in that direction these days, but we like to think that we don't necessarily need that sort of help.
I think in those moments when I'm not "pollyannish" that so many controls have been placed on our lives that we, indeed, will need all the government support we can get -- and all because the government has rigged it that way. Harry Browne put it best: the government breaks your leg and then gives you a crutch and tells you you're better off than before. We are becoming so battered and buffetted by government that we can't think straight anymore; and that crutch starts to look awfully comforting.
I did a little calculation based on what you told me you spend on gas each week. If we were to spend $150 a week on gas we'd be able to travel (based on today's average Winnebago County gas price of $3.11 a gallon) about 964 miles. That's about 193 miles a day for a five-day work week. I take it that Bill is a salesman? I wondered whether his company gave him some sort of gas allowance or vehicle stipend of some kind.
We don't have the same pressures. I work a mile-and-a-half from our home. My wife drops me off and picks me up: a total of two round trips of 3 miles each per day. Some days we travel to our favorite gas station so that I can get a big cup of coffee and chat with our favorite gas station worker, a retired business executive who likes the contact with the public. He also likes my little opinion pieces in the local paper. He was my first fan. We thereby manage to spend only between $30 and $40 a week for gas.
I am not sanguine that our Congresscritters will be able to resist passing some sort of gasoline price control legislation. They all want to be re-elected, so gasoline price controls look like a sure-fire winning campaign issue. Of course they'll have to put up with the complaints about long gas lines and shortages and dry pumps after those controls are passed, but they'll stay in office, won't they?
I am tired of voting for these clowns. Term limits and smaller government...that's what I want.
Steve Erbach
The Town Crank
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