The Free Market, price of gas, class warfare or socialism?

[Sheriff Gonna Getcha]

Originally Posted by dmek25

i don't care if Jesus Christ said that number is right. i say no way. every quarter all the major oil companies are setting records for profits. how? the only increases they face are in wages for their workers. that's miniscule in the grand scheme of things. the government needs to grasp some sort of control of the price. those company ceo's will just have to be satisfied with a 10 million dollar bonus

7 cents a gallon is a nice profit when you consider how many trillions of gallons of gas are consumed every year.

How should the government grasp control of the price? Should they force companies to lower their prices and pay the oil companies the difference? Either way, taxpayers are going to "eat it."

[Schneed10]

Originally Posted by dmek25

i don't care if Jesus Christ said that number is right. i say no way. every quarter all the major oil companies are setting records for profits. how? the only increases they face are in wages for their workers. that's miniscule in the grand scheme of things. the government needs to grasp some sort of control of the price. those company ceo's will just have to be satisfied with a 10 million dollar bonus

That's pretty ignorant, but whatever.

[Sheriff Gonna Getcha]

Originally Posted by Schneed10

That's pretty ignorant, but whatever.

I think that's it's unreasonable to use pure speculation and a hunch to discount the validity of numbers vetted by the SEC. But, Schneed, could you use different words? I just want to make sure no fights break out.

[dmek25]

why cant the price be capped? a gallon of milk is regulated by the govt.

[BaltimoreSkins]

Originally Posted by dmek25

why cant the price be capped? a gallon of milk is regulated by the govt.

The milk industry doesn't have the lobbying efforts of the gas industry.

[dmek25]

all i know is that creative book keeping has been around since people started keeping records. and politicians looking for a handout has been around for, well, forever. schneed, im not sure why you take it personal when someone disagrees with you. we can agree to disagree. because i know what you say isn't changing my thought process. and im sure my viewpoints aren't changing yours. its known as healthy discussion. the name calling isn't very productive, and it tends to change someones opinion of your personality. which is kind of funny

[skinsguy]

Originally Posted by Schneed10

This is quite possibly the worst idea I've ever heard of from an economic standpoint.

While we're busy "innovating" and "figuring things out", the following would happen:

- Consumer spending would drop significantly as the 100% increase in gas price cuts directly into discretionary spending.

- With lower discretionary spending, cyclical companies will undergo large layoffs and unemployment will rise above 7%.

- An inefficient market will be created, one in which gas will be available for $2 - $3 per gallon in Canada. A black market will be created in an attempt to buy gas cheaper in Canada and smuggle it across the border. Then you immediately have a national security crisis.

- Recognizing that drivers will begin to move away from the roads and towards public transportation and recognizing that demand for their services is increasing, public transportation systems will raise prices.

- Worker productivity will be drastically affected as many low-income workers will find it increasingly difficult to get to work.

- The drop in consumer discretionary spending will lead to lower profitability for our businesses, reducing the amount of taxes the government collects, thereby nullifying whatever they collect by enacting a floor on gas prices.

- Other countries will gain a competitive advantage against us as their citizens will only be expected to pay $3 per gallon for their gas, while we pay $6. This creates a scenario ripe for a bigger federal deficit, further weakening the dollar.

You're possibly talking consequences of epic proportions. Easily the worst idea I've heard in a long time.

Agreed 100%!!!!

[Sheriff Gonna Getcha]

Originally Posted by dmek25

all i know is that creative book keeping has been around since people started keeping records. and politicians looking for a handout has been around for, well, forever. schneed, im not sure why you take it personal when someone disagrees with you. we can agree to disagree. because i know what you say isn't changing my thought process. and im sure my viewpoints aren't changing yours. its known as healthy discussion. the name calling isn't very productive, and it tends to change someones opinion of your personality. which is kind of funny

Schneed doesn't mean to attack people personally, he just doesn't pull any punches with regard to how he feels about someone's opinion.

As for cooking the books, let me just say the SEC can bring the hammer when companies get too cute. In the post-Sarbanes Oxley (i.e., post-Enron/WorldCom) world, it's become a lot more difficult to overstate/understate earnings. As a securities lawyer, I must say that I have a lot of confidence in the SEC. The SEC and securities laws are not perfect, but they are pretty damn good. Moreover, dmek, companies have a vested interest in OVERstating their profits.

[FRPLG]

Originally Posted by dmek25

why cant the price be capped? a gallon of milk is regulated by the govt.

This is a fantastic example of why the government shouldn't cap gas prices. The capping of milk prices has created an completely imbalanced milk market that essentially killed milk farming in the US as it existed for decades. Because of the costs involved with producing milk it is near impossible for small and even medium sized farms to operate at a profit. Large incoporated farms milking thousands of cows a day drive the market now and put small farmers out of work. These farmes now have no job and probably lose their homes since they can't pay off their farms where ther homes are. Financial disaster. So what does the gov't do? THEY GIVE SUBSIDIES TO THEM SO THEY CAN OPERATE AT A LOSS. This therefore eliminates their motivation to work more efficiently and keeps the entire market in a state of flux with people on the daily verge of losing everything.

Now this is not anything like what would happen with oil but it shows how introducing false outside pressures on a market can easily destroy it and make things worse. Almost always the consequences of such actions are difficult and even impossible to predict.

Two sayings come to mind:

"No good deed goes unpunished"
"The road to hell is paved with good intentions"

It is time to start thinking about SMART ways to affect markets. Promoting healthy markets is the best thing for consumers and for companies.

[FRPLG]

Originally Posted by dmek25

all i know is that creative book keeping has been around since people started keeping records. and politicians looking for a handout has been around for, well, forever. schneed, im not sure why you take it personal when someone disagrees with you. we can agree to disagree. because i know what you say isn't changing my thought process. and im sure my viewpoints aren't changing yours. its known as healthy discussion. the name calling isn't very productive, and it tends to change someones opinion of your personality. which is kind of funny

I agree about name calling but when he presents a logical and factual argument and your counter argument is basically "Everyone is lying, it's all a conspiracy" it makes you sound dumb(which you are not) and emotionally blinded"

And I am sorry but ignorant simply means to not know what you are talking about. If you present an argument that could reasonably lead someone to think you don't know what you are talking about then you need to be prepared to be called out on it. It isn't like he called you a dumb shit or something personal like that.

I'm just sayin'...

[GTripp0012]

Originally Posted by Sheriff Gonna Getcha

Schneed doesn't mean to attack people personally, he just doesn't pull any punches with regard to how he feels about someone's opinion.

As for cooking the books, let me just say the SEC can bring the hammer when companies get too cute. In the post-Sarbanes Oxley (i.e., post-Enron/WorldCom) world, it's become a lot more difficult to overstate/understate earnings. As a securities lawyer, I must say that I have a lot of confidence in the SEC. The SEC and securities laws are not perfect, but they are pretty damn good. Moreover, dmek, companies have a vested interest in OVERstating their profits.

Speaking of SOX, does anyone have any links to quality articles on the subject?

I have a paper due in 9 hours on Sarbanes Oxley.

[GTripp0012]

Originally Posted by Schneed10

This is quite possibly the worst idea I've ever heard of from an economic standpoint.

While we're busy "innovating" and "figuring things out", the following would happen:

- Consumer spending would drop significantly as the 100% increase in gas price cuts directly into discretionary spending.

- With lower discretionary spending, cyclical companies will undergo large layoffs and unemployment will rise above 7%.

- An inefficient market will be created, one in which gas will be available for $2 - $3 per gallon in Canada. A black market will be created in an attempt to buy gas cheaper in Canada and smuggle it across the border. Then you immediately have a national security crisis.

- Recognizing that drivers will begin to move away from the roads and towards public transportation and recognizing that demand for their services is increasing, public transportation systems will raise prices.

- Worker productivity will be drastically affected as many low-income workers will find it increasingly difficult to get to work.

- The drop in consumer discretionary spending will lead to lower profitability for our businesses, reducing the amount of taxes the government collects, thereby nullifying whatever they collect by enacting a floor on gas prices.

- Other countries will gain a competitive advantage against us as their citizens will only be expected to pay $3 per gallon for their gas, while we pay $6. This creates a scenario ripe for a bigger federal deficit, further weakening the dollar.

You're possibly talking consequences of epic proportions. Easily the worst idea I've heard in a long time.

I agree with your analysis of this situation, and with SGG's, and I understand the consequences of such a move. I also understand it's a pipe dream to think that anyone in politics would have the balls to suggest such a bill, and that anyone else would vote for it.

With that said, (worldwide) economic disaster is pretty much where we are headed in terms of an energy crisis. This plan obviously wouldn't prevent that, but I think it would lessen the long term effects, and would ensure that crude oil would be available in the future, should it be needed to heat our homes or something.

I don't pretend to have the answers, but I do think a solution is required to this specific issue.

[FRPLG]

And finally...

What hasn't been discusssed in this thread is why Exxon and their ilk only make .07 a gallon. First off the cost of oil in the world is largely set by a cartel called OPEC. Now a cartel in an industry seeks to:

Collude amongst all competitors to increase profit by reducing actual competition.

Direct effects are limited supply and/or raised prices.

The price of gas is determined by:

cost of product(crude from OPEC) ~50%
refinment ~25%
taxes ~15%
distribution and overhead ~10%

When all is said and done it costs a lot of money for big oil to get a gallon of gas to a gas station.

Now I don't know enough to quite understand why oil companies make so much money. I'd like for someone who does know to explain it.

[Sheriff Gonna Getcha]

Originally Posted by GTripp0012

Speaking of SOX, does anyone have any links to quality articles on the subject?

I have a paper due in 9 hours on Sarbanes Oxley.

I have quality articles on SOX in the office, but they all deal with very narrow topics that probably would not be of much help. Sorry, but good luck.

[GTripp0012]

Originally Posted by Sheriff Gonna Getcha

I have quality articles on SOX in the office, but they all deal with very narrow topics that probably would not be of much help. Sorry, but good luck.

lol. It's okay. Thanks much anyway.