What if we don't run out of oil?

WND ^ | November 15, 2005 | Jerome Corsi

[2 Kool 2 Be 4-Gotten]

The FTC did not impose Nixon's wage and price controls, that was all Tricky Dicky.

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Sure Nixon "imposed" the controls but some Alphabet soup agency had to have implemented and enforced them - or so it would seem to me - maybe there was some "office of wage and price controls" at that time - I'll try to find out.

Thanks for your kind words.

[Dan Evans]

We spend more money on bottled water than gas.

I'd like to see the bottled water barons hauled before Congress to justify their outrageous price gouging.

[Dan Evans]

Actually, it does. The oil company can make gazillions in profits that enrage the morons who don't comprehend the workings of a free market economy

Yes. I guess you mean price supports, which are the reverse of price controls. They are usually in effect at the wholesale level. Sugar, milk, corn have price supports.

Just as bad. If any industry were to do something like this on their own, they would go to jail.

[Dan Evans]

I thought the Earth's core was made up of iron and maybe nickel as well. When did the thinking on the core's composition change?

There are meteorites that contain some percentage of carbon and hydrogen and so it would be surprising if the earth's core had none. It wouldn't take very much at all to account for the oil deposits since the crust is a tiny fraction of the earth's mass.

[Dan Evans]

Federal Trade Commission, surprisingly enough, was a better run organization than it is today. Had they known beforehand that artificial price controls had been implemented by another government agency (such as the WH or Congress), they wouldn't have wasted the manpower to conduct an investigation.

I really think it is a stretch to make that assumption. I would not be at all surprised that these people would be completely bewildered that price controls would cause a shortage.

[Dan Evans]

If they can't honestly come out and say they are going to jack prices up because they can, I don't have a lot of respect for them.

You don't understand. They don't "jack up" prices because they can, they do it because they have to. There is only one correct price. If the price is too high, they can't sell all of their product. If it is too low, they there is a shortage -- gas lines.

What oil companies can do, and what all companies do, is adjust the production to maximize profit. Produce too little or too much and profit falls. It's tricky because competitors are doing the same, demand changes, customer habits change, oil supplies vary, etc. And they have to do this while a hostile government is looking over their shoulder ready to jump on them if they perceive any "gouging".

[Dan Evans]

As I noted previously, if the "shortage" were due solely to price controls, selling ANY amount of gas at a loss is still selling the product at a loss;

No. They could make a profit by selling some gasoline at the controlled price but not a lot. The more gas they produce, the more it costs them per gallon to make it. Why? Because:
1) Some crude costs more than others. Long term contracts may cost less than the spot market price.
2) Refining costs more if you have to pay people overtime.
3) Some crude costs more to refine than other types. If you limit production you can save costs.
4) Some refineries are more efficient. If they can shut down the inefficient ones they save costs.