MSNBC: House approves stiff gas-gouging penalties

[PeterMP]

Your solution to gain a free market is to add more regulation to the "free" market. lol

This love for blaming a company for making a profit, yes, any profit is so utterly dumb that it makes my head hurt.

No one forces you schmos to buy gas. Suck it up and dealm change your freaking situation if you dont like it. It's only in your hands to change it, not the nanny state

Look neither JMS or I really complaining. We're having an intellectual discussion. If you can't see that gas prices are at record highs even though oil is low and even adjusting for inflation are higher then periods of times where there have been noticable shortages (e.g. the 70's) and wonder why, then you are either stupid or in my opinion lack what I would consider basic intellectual curiosity about your surroundings.

If there is a trust formed by the major oil companies, it would be illegal and should be punished/broken up based on the laws of the American goverment. Do you not support enforcing laws that are on the book?

[Duncan]

First of all the government gets tax revenue from "Big Oil's" profits so to claim the governments tax revenue from gas is static is false. Second, if the parliament of swine were serious about helping the "common man" during this "crisis" why not cut the tax per gallon in half. Instead we get mirror dressing BS legislation that does nothing but make liberals feel better about going after Big Oil and does absolutely nothing at all about the price per gallon.

Why do liberals moan about the price increase anyway? If the price per gallon goes up enough the market will demand a cheaper, and hopefully cleaner, alternative.

[Ax]

http://www.taxfoundation.org/news/show/1168.html

Oil Industry Taxes Have Outpaced Oil Industry Profits Since 1977.

The past year has clearly been a good year for oil companies. However, these large profits should be viewed in proper perspective, given the staggering amount of tax the industry currently pays and remits to governments at the federal, state, and local levels. As the experience of the past quarter-century has shown, governments have actually “profited” more from the oil industry than the industry has earned for its shareholders.

[SnyderShrugged]

Look neither JMS or I really complaining. We're having an intellectual discussion. If you can't see that gas prices are at record highs even though oil is low and even adjusting for inflation are higher then periods of times where there have been noticable shortages (e.g. the 70's) and wonder why, then you are either stupid or in my opinion lack what I would consider basic intellectual curiosity about your surroundings.

If there is a trust formed by the major oil companies, it would be illegal and should be punished/broken up based on the laws of the American goverment. Do you not support enforcing laws that are on the book?

sorry, linked to wrong post. More a carte blanch statement anyway. Not directed toward anyone specific.

[SnyderShrugged]

Look neither JMS or I really complaining. We're having an intellectual discussion. If you can't see that gas prices are at record highs even though oil is low and even adjusting for inflation are higher then periods of times where there have been noticable shortages (e.g. the 70's) and wonder why, then you are either stupid or in my opinion lack what I would consider basic intellectual curiosity about your surroundings.

If there is a trust formed by the major oil companies, it would be illegal and should be punished/broken up based on the laws of the American goverment. Do you not support enforcing laws that are on the book?

But I'll go toe to toe intellectually with you any day LOL

[PeterMP]

As I said taking down refining capacity in a coordinated mannor this year while gas is most in demand in the summer is what has caused the current spike which is supposed to top off at above 4$ a gallon more than a 40% swing. Also we have precident for trusts doing this for record profits in California's Electrical crisis a few years back.

The thing w/ CA is my understanding is the corruption came down the line. Electricity providers (e.g. Enron and Reliant) were in cahoots w/ energy providers (e.g. PSGE). Not that direct competitors were in cahoots as in Enron and Reliant were making plans together. You have to propose that direct competitors are in cahoots. In addition, in CA you were mostly talking about Texas companies so you'd think they were close, but here you really are talking about international companies that are headquartered in different countries that have had very different approaches to the business. Is Citgo (owned by Venezula) in on it?

In addition, things were even more complicated because the supply of electricity was tied to the price of natural gas, which was also controlled by Enron and Reliant. The current situation for example would be worrisome if the oil companies were also controlling the gas mileage of the cars we drive, but I see no reason to believe that they are for example affecting the cars that Honda and Toyota are driving (I will admit that some of the American car companies are bit close to big oil for my liking, but that also might explain why they are going out of business).

Honda and Toyota don't own pumps in any significant numbers. I personally have never seen either company owning gass pumps.

No, but they do control technology that will lower the demand on gas and

maybe the need for it totally

Nor does Costco. Can't bust a trust with 2% of the pumping capacity and 0% of the refining and reserve capacity. Mass transite is also irrelivent as it only services a fraction of those who commute to work across the country.

I assumed that Costoc owned those pumps at their stores. Are you saying it isn't a significant number? Are there refeniries not owned by the big oil companies? This again is an interesting claim w/ no proof (I don't mean to send you searching the internet for links). I know there are small oil drilling companies. I own stock in some of them (and they are doing well). It seems reasonable that they would form a collective and make their own refinery. In addition, I know an independent gas station that was selling gas for real cheap so it seems unlikely that they were getting gas from one of the big companies.

The solution is the break up the anti compeditive trust which was allowed to consolidate production and distribution over the last decade and a half. Let the market place regulate itself once the trust is gone. The role of government should be to ensure a free marketplace.

So again you are assuming they are in cahoots. Is it possible they are looking at the same information and drawing the same conclusions? I'd have to look for it, but I saw a study once looking at the stock buying/selling patterns of the big mutual funds, and they all act very similarily (buy and sell the same stocks and types at the same time) and end up w/ very similar ratios of the same stocks, but the conclusion was they all had the same data and were all analyzing it based on the same historical trends and were all drawing the same conclusions so we're acting in a similar/identical ways independently. Not that they were in cahoots to manipulate the stock market.

It seems to me the big oil companies might be doing the same.

[PeterMP]

But I'll go toe to toe intellectually with you any day LOL

Well try posting something anti-evolution or global warming, and I'm there in a second.

[SnyderShrugged]

Well try posting something anti-evolution or global warming, and I'm there in a second.

Oh we are in for fun in another thread soon then!

[JMS]

Why do we have to blame anyone? As time passes, things get more expensive. Movies were a quarter not that long ago (1941) and $2.78 in 1981, and now they are $6.40 on average. No gnashing of teeth over that.

They were .25 in the 1960's for kids. Ahhh I remember when...

Your logic isn't reality based. Not with gas prices climing 30% in a month. Not with oil companies increasing profits by 50% in a quater from one year to the next. That is not natural price growth.

[JMS]

Your solution to gain a free market is to add more regulation to the "free" market. lol

Free market? We don't have a free market now. Not with the government giving tens of billions in tax breaks and free land to oil companies. Last year Bush opened closed military bases for the oil companies and gave them tax breaks in addition to the previous taxes breaks specifically so they could open refineries. The oil companies said it wasn't a good investment.

Of coarse it's not a good investment. They're making record profits now. The volatility works for them.

I'm not arguing for more regulations. I'm arguing we break up the oil trust which formed since the 1990s. I'm arguing that in the 1990's we have vast amounts of reserve refining capacity and after literally thousands of mergers, the oil companies themselves created the refining shortage by closing refineries. They further exacerbate the problem in the summer months by taking refineries offline.

I'm saying there can be no free market without competition. And when a few oil companies can make record profits by creating shortages; you don't have a free market.

Capitalism relies on free markets where folks are rewarded for doing a better job than their competition. Where innovation leads to profit. When you create a situation where profit, record profits can be jury rigged by just charging more money with no alternative for the consumer; that's not how free markets are supposed to work.

This love for blaming a company for making a profit, yes, any profit is so utterly dumb that it makes my head hurt.

You are being intentionally obtuse. We aren't talking about profit. We are talking about record profits of 51% above the previous year. The previous year also being a profitable year!!! Not because they did their job better. Not because they sold more product. Not because they innovated. But because they decided to charge more en mass, leaving the consumer with no alternative.

It's not like trusts and monopolies are legal. Not like they are part of the free market!!...

No one forces you schmos to buy gas. Suck it up and dealm change your freaking situation if you dont like it. It's only in your hands to change it, not the nanny state

Gas prices are reflected in everything you buy. Gas is the life's blood of our economy. By definition you don't have a choice. Everything and anything you buy travels on or buy gas. That's your car, that's the commuter train. That's the stick of gum you pop in your pie hole.

It's not like you have a choice at all. That's what the definition of monopolies are. The most important role of government in the economy is to regulate and ensure the free marketplace. Which by allowing more than 2000 mergers since the mid 1990's they've failed to do.

Break um up!! Not like we haven't broken up monopolies(trusts) throughout our history in order to ensure a free market. Teddy Roosevelt (republican) was a famous trust buster.

[Larry]

Free market? We don't have a free market now. Not with the government giving tens of billions in tax breaks and free land to oil companies. Last year Bush opened closed military bases for the oil companies and gave them tax breaks in addition to the previous taxes breaks specifically so they could open refineries. The oil companies said it wasn't a good investment.

Of coarse it's not a good investment. They're making record profits now. The volatility works for them.

Yeah, I've always admired the reasoning that the government needs to "encourage" investment in the Oil Business, because there's just no money to be made there without government subsidies.

[JMS]

First of all the government gets tax revenue from "Big Oil's" profits so to claim the governments tax revenue from gas is static is false.

Government also allows the oil companies to write off expenses. Currently oil companies are charging more at the pump not because they are making more at the pump, but because the refineries are making more money. Guess what, the refineries which are owned by the same oil companies aren't in the united states, and they aren't subject to US taxes.

Oh and it's not like Bush hasn't been giving them huge additional tax breaks through out his six years in office. The entire energy bill tens of billions of dollars mostly went to the oil companies in the form of free land to build refineries, and billions and billions of tax breaks.

Guess what, they took the tax breaks, they aren't building any new refineries because they ARE MAKEING RECORD PROFITS BY CREATING THE SHORTAGE, and paying less taxes too!.

Now they're blaming proposed ethanol investment for the problem!!

http://www.nytimes.com/2007/05/24/business/24refinery.html?ei=5065&en=88a4750c6b8de113&ex=1180584000&partner=MYWAY&pagewanted=print

Second, if the parliament of swine were serious about helping the "common man" during this "crisis" why not cut the tax per gallon in half. Instead we get mirror dressing BS legislation that does nothing but make liberals feel better about going after Big Oil and does absolutely nothing at all about the price per gallon.

You're not listening. The taxes haven't gone up. The taxes aren't responsible for gas prices jumping more than a dollar in the last two months. Without competition to put negative pressure on the price at the pump oil companies are literally free to charge whatever they like for the gallon of gas. Removing the taxes wouldn't do anything.

Why do liberals moan about the price increase anyway? If the price per gallon goes up enough the market will demand a cheaper, and hopefully cleaner, alternative.

Only if the marketplace is free. If the marketplace is in fact a monopoly the market is not free to make any adjustments. That is the definition of monopolies, which are illegal in free markets. Illegal in America and what we have running many segments of the economy. Banking, Oil, Software, Healthcare, and Insurance. It's all about controlling the marketplace in order to ensure your profit regardless of the competence or informativeness of your product.

[JMS]

http://www.taxfoundation.org/news/show/1168.html

Oil Industry Taxes Have Outpaced Oil Industry Profits Since 1977.

Which is only true if you add the taxes the consumer pays at the pump to the oil companies "tax burden". Which is stupid.

It's also only true if you fact er it over 30 years. In 1977 the companies was just coming out of an oil boycott by OPEC. There was gas rationing, oil sales were down, and everybody purchased an economy car.

Try looking at oil profits over the last 3-4 years or even the last 10 years, Coneco Oil made a record 50% increase in profits last year. That's a nice piece of coin. What other industry does that on a regular bases without the assistance of an anti free market trust?

The past year has clearly been a good year for oil companies. However, these large profits should be viewed in proper perspective, given the staggering amount of tax the industry currently pays and remits to governments at the federal, state, and local levels. As the experience of the past quarter-century has shown, governments have actually “profited” more from the oil industry than the industry has earned for its shareholders.

?? Think about what you're saying...... I'm taxed what 40-45% between federal, state, and local taxes. If I could get a mature investment which gained 20% or half of that on an annual basis wouldn't that be outstanding. What's a reasonable profit for a major corporation after all their expenses? 5-8%? If investors saw half that they would be doing well.

That's a bogus statistic..

Oil prices aren't high because of taxes, They're high because the oil companies are charging more, and making more money and the consumer has no place to turn.

[JMS]

The thing w/ CA is my understanding is the corruption came down the line. Electricity providers (e.g. Enron and Reliant) were in cahoots w/ energy providers (e.g. PSGE). Not that direct competitors were in cahoots as in Enron and Reliant were making plans together. You have to propose that direct competitors are in cahoots. In addition, in CA you were mostly talking about Texas companies so you'd think they were close, but here you really are talking about international companies that are headquartered in different countries that have had very different approaches to the business. Is Citgo (owned by Venezula) in on it?

In California, they deregulated the publicly owned electric power plants. They sold off the plants to private company(s). The company(s) which purchased the plants were mostly part of a cartel out of Texas including Enron and Reliant. Enron didn't own the plants they purchased the rights to the power thus adding to the cartel's control over the California market. There was no competition as the new electric utility companies took their plants offline to cause the electric shortage. California's was left to buy up power on the spot energy market. Which they did for 10-15 times the price they were paying with there in state power plants. The same companies which owned the California plants now, owned the out of state plants. Thus the electric companies and Enron who owned not the plants but the rights to out of state plants, made record profits while lowing the amount of electricity they produced.

http://www.businessweek.com/2001/01_07/b3719001.htm

If their had been competition, if one electric company produced less, someone else would benefit from the shortage and produce more. Trusts, Monopolies allow for control of the marketplace and works against competition.

In addition, things were even more complicated because the supply of electricity was tied to the price of natural gas, which was also controlled by Enron and Reliant. The current situation for example would be worrisome if the oil companies were also controlling the gas mileage of the cars we drive, but I see no reason to believe that they are for example affecting the cars that Honda and Toyota are driving (I will admit that some of the American car companies are bit close to big oil for my liking, but that also might explain why they are going out of business).

A guy buys a car not on a weekly basis that they buy gas for. Even if the entire country purchased 80 mile per gallon cars it wouldn't effect the ability for the oil companies to make profits. They would just continue to raise their prices and continue to sell and produce less gas. That's exactly what they are doing now. Toyota doesn't compete with Exxon/Mobil. Nor is Toyota's success meaningful to Exxon/Mobil's bottom line unless there is a free market place putting negative pressure on Exxon/Mobil for raising their prices.

No, but they do control technology that will lower the demand on gas and

maybe the need for it totally

Demand for gas isn't the issue. It wasn't the issue last year. Oil prices are down this year while gas prices are up almost 35% so far. The issue is that the oil companies can artificially and unilaterally control the market by taking refineries of line in a coordinated manner. That's true if they sell 100 million gallons of gas or 50 million. If they can take us from 2.20 a gallon to 4.00 a gallon in a matter of weeks without any shortage of oil they can charge whatever they like without any fear of someone taking their market share. In the absence of competition the Oil companies will make record profits even if we cut fuel demand. Because they've decoupled profit from production.

I assumed that Costoc owned those pumps at their stores. Are you saying it isn't a significant number? Are there refeniries not owned by the big oil companies? This again is an interesting claim w/ no proof (I don't mean to send you searching the internet for links). I know there are small oil drilling companies. I own stock in some of them (and they are doing well). It seems reasonable that they would form a collective and make their own refinery. In addition, I know an independent gas station that was selling gas for real cheap so it seems unlikely that they were getting gas from one of the big companies.

I'm saying Costco isn't an oil company. I'm saying Costco definitely buys their gas from someone else, likely the big three or four. I'm also saying Costco isn't a major player in consumer oil sales. Costco, nor any other company is in a position to break the oil trust monopoly. That's the definition of a monopoly. If there was competition, then it wouldn't be a monopoly and we wouldn't have gasoline prices jumping close to 50% this summer in the absence of any shortage of crude oil.

I don't think either of those statements are even controversial.

So again you are assuming they are in cahoots. Is it possible they are looking at the same information and drawing the same conclusions? I'd have to look for it, but I saw a study once looking at the stock buying/selling patterns of the big mutual funds, and they all act very similarly (buy and sell the same stocks and types at the same time) and end up w/ very similar ratios of the same stocks, but the conclusion was they all had the same data and were all analyzing it based on the same historical trends and were all drawing the same conclusions so we're acting in a similar/identical ways independently. Not that they were in cahoots to manipulate the stock market.

It seems to me the big oil companies might be doing the same.

Sure they are in coo hoots but it doesn't matter really. If they are all taking down refining capacity in a coordinated manor not just over the summer, but also over the last half decade; and they're all making record profits while doing so. It's anti competitive. The competition which existed when there was 3000 companies serving the market was lost when Congress and the regulators allowed those companies to be consolidated down to 3 or 4. Break um up.

Also, I know of no mutual fund which can be said to be a monopoly. Mutual funds are a totally different animal, they aren't even a company. No investment company which I know of owns more than a fraction of available stocks. The influence they have to jack up specific stock prices is only transient.