Election times are dangerous ones...
Well, I guess we are nearing some big election because here comes the first of many stupid bills:
http://www.washingtontimes.com/business/20070524-121323-8807r.htm
Did any of our leadership take economics 101? I really cannot see how this will work and is just a land grab for more votes during the election season.
If this gets signed, and it won't, I can only see two things happening:
1) Long lines at the pump as 'big oil' curtails the product they are delivering. I mean why pump more when you are not incented to?
2) Nationalization of the industry. I mean if number 1 happens what is the next move in this chess game? I'm sure some of you think this is a bit extreme but don't you think that your average American thinks it is their 'right' to have cheap gas?
So look, get out of your SUV and buy a Prius or take the bus or your local rapid people mover (except in Miami) and leave Big Oil alone. It's simple supply and demand here folks. The U.S. has not built a refinery in over 20 years so as demand goes up and supply goes down well you guessed it....price goes up. ECO101.
Oh....one more final note. The way to help here long term. Nuclear. Cleaner, More Efficient, and Safer. But that topic is for another post.
posted by Nym Pseudo @ 7:25 AM
3 Comments
3 Comments:
It seems to me that you may be overlooking the obvious. They are very cognizant of the economics. This is a CHEAP stunt that buys them EXPENSIVE votes. What’s not to like?
Bottom line, beating up on Big Oil is a popular thing to do because the electorate that gets them there is economically illiterate. But to think that they don’t know is naïve on your part. They do know, but cynically choose to ignore the facts when it is the best way to buy votes from the illiterate. This is almost as good as buying votes with other people’s money.
I respect the people on this board too much to dwell on the issue, but I have a very young child who reads these posts every once in a while, so please ignore the rest of this……
I have personally heard people complaint about the price of gas, call it $3.25 / gallon, while drinking $80 / gallon coffee and $6.00 / gallon water and soft drinks. Obviously, not many things are known to these people but oil is obviously:
(1) Found through a process that has by and large been hit and miss until this decade;
(2) Extracted from some of the most remote places on the planet;
(3) Transported over enormous distances, through dangerous countries and seas;
(4) Processed through extremely regulated plants that require huge capital investments;
(5) Transported further to the retail outlets all over the country;
(6) And then sold in capital intensive retail locations (a gas station requires much more infrastructural investment than a supermarket or a Starbucks)
Oil company profitability is at best average when compared to the rest of the economy. As an example, those of us in consulting normally have EBITDA 1.5 times theirs.
Give poor Exxon a break!!!
I was overlooking the obvious I guess.
The new populism is scary. Certainly a sign that a Clinton is running for office.
To add to your list:
How about razor blades? My God are those things expensive.
A primary reason why working from home is so popular with me.
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