Americans Are Doing Their Part, Time for Bush's Oil Cronies to Do Their Part, Says DNC (Barf alert)

U.S. Newswire ^

[Sub-Driver]

Americans Are Doing Their Part, Time for Bush's Oil Cronies to Do Their Part, Says DNC

9/1/2005 12:34:00 PM

To: National Desk

Contact: Josh Earnest of the Democratic National Committee, 202-863-8148

WASHINGTON, Sept. 1 /U.S. Newswire/ -- The following was released today by the Democratic National Committee:

This morning, President Bush told Diane Sawyer on ABC's Good Morning America that to ease skyrocketing gas prices Americans "oughtta conserve more and I would hope Americans conserve if given the choice."(ABC, Good Morning America, 9/1/05)

Democratic National Committee Chairman Howard Dean issued the following statement reminding President Bush that in case he hadn't noticed, ordinary Americans have been doing their part. They have been making sacrifices, they have been suffering. Meanwhile President Bush has failed to rein in skyrocketing gas prices.

[finnman69]

Is this for real? OMG....

[brownsfan]

"(it's the old class warfare, corporations are evil, Marxist thinking)"

There is no question the left is crazy with hatred for all things related to oil. I believe that as you do.

However, there are other things to consider, besides supply and demand. If you allow economies to exist freely with no intervention, bad things can happen. Isn't that why we have anti-trust laws?

Then, there is the issue of oil's place in our economy. If I own an oil company, I'm going to make as much profit as I can, for as long as I can. If I have to stretch laws, or gouge, that's what I'm supposed to do. I understand that, and accept it's the nature of things. But, the price of oil affects the price of virtually everything. We could be looking at a serious inflationary cycle, and that means a serious hit to all of your stocks.

I'd kind of like to avoid that if possible.

[Vinnie]

BTW, I wouldn't be surprised if China was squirreling away much of the oil it's buying for a 'rainy day'.

[p. henry]

What is the difference between "profiteering" and simply making a profit. I presume that the former implies some form of illegality suchas price fixing among nominal competitors. If these activities have taken place, the offending companies should be exposed and prosecuted.

If, however, by "profiteering" you mean simply owning a commodity which has become scarce and therefore selling it at a higher price as a consequence of that scarcity, I disagree with the use of your prejorative term. You imply that selling a scarce product at a higher price is somehow wrong when, in fact, that is precisely how a free market is supposed to function. The most common cause of scarcity is market inefficiency. The most common cause of market inefficiency is governmnent interference.

In the case of the oil industry, our government has contributed to market inefficiency by imposing constraints on exploration (ala ANWR), refining (environmental requirements that have prevented any new refineries in decades), and efficient alternate sources (the effective elimination of the nuclear power industry). In addition, it failed to protect domestic producers from predatory price manipulation by OPEC in the '90s. Those who call oil companies profiteers and who advocate reducing gasoline prices through even more government interference in the marketplace should contemplate this sorry history.

[rollo tomasi]

Does the Gore family still own all that Occidental Petroleum stock.

Maybe the DNC cronies better start asking in house first before looking like fools.

I have always tolerated democrats before, after August 26, 2005 anyone who is affiliated and votes for democrats are dead to me.

[tx_eggman]

Another comic aspect of the crisis is when the oil company PR flacks come out and blame regulations for lack of new refineries - as if they were interested in building new ones to lower their profits.

They're building them Shermy, just not here ... because of regulations.

Petrochemical companies add capacity to existing refineries at the equivalent of one mid sized plant a year here in the US. The permitting process to build a new one is nearly impossible to navigate. There are 149 US refineries now, processing 17 Million bbl per day. In 1981 there were 325 doing 18 million bbl per day. The older, less efficient ones were shutdown and the others have continually been upgraded/enlarged.

In April of this year approval was granted in Arizona for the Air Quality Permit for a refinery in Yuma county The Link ... they've been trying to get that one through the regulational maze for ten years and if it does get built, it will be the first new one in over twenty-five years.

Facts are a bitch, Sherm, but they trump baseless emotional spews

[brownsfan]

"In addition, it failed to protect domestic producers from predatory price manipulation by OPEC in the '90s"

I elaborate a bit more in post #22. I think the term profiteering is fitting. If you raise the price of what you have, and it causes real suffering, and the motive is purely raising profits. That's profiteering. I'd probably do the same, but it's still profiteering in my book.

I took note of what you said... the government failed to protect the domestic oil companies? But, isn't predatory price manipulation part of a free market? I'm going to hazard a guess that you'd not be in favor of the government trying to protect American workers from predatory price manipulations by the Chinese and Indians? Interesting how definitions shift, and what free market advocates define as free market becomes situational.

[Edgerunner]

(snicker...) iiiiiiluvit

[Shermy]

"Facts are a bitch, Sherm, but they trump baseless emotional spews"

You shouldn't be nasty, you might get egg on your face.

The refinery you point out is from some small outfit, Arizona Clean fuels. Not Chevron, Texaco, etc.

Facts: Capitalism. Increasing profits. Oligopoly. Why would the big guys who ever more dominate the market act to decrease their profits by building more refineries?

I'd like to learn more about Arizona Clean Fuels and who's backing them but the link is dead via the article you posted.

[Hendrix]

I have no problem with intervention to stop any anti-trust violations or to stop companies from breaking any other laws, but what I am hearing people say is that the oil companies should be prevented from doing what is perfectly legal and what is perfectly part of our free market system. If supply goes down and demand stays constant, prices will generally go up, and we should not stop or prevent that from occurring, regardless of the consequences (those consequences are exactly what make an economic system work if you really understand economics). Raising prices because of less supply is how an economic system works.

[p. henry]

The predatory pricing to which I referred was the $12 per barrel price in the 90's which was not created by the free market but by OPEC, which is the antithesis of the free market, with the purpose and effect of reducing the long term domestic production of crude oil.

I disagree with your position that selling a product at a price determined by the market is wrong if it causes "suffering." Prices don't cause "suffering," but shortages do. In the long run, there are really only two effective means of alleviating a shortage: an increase in supply or a reduction in demand. High prices should lead to both and therefore to lower prices.

[brownsfan]

"Raising prices because of less supply is how an economic system works."

The oil companies are an oligopoly. This perverts the supply/demand equation.

[Hendrix]

"I elaborate a bit more in post #22. I think the term profiteering is fitting. If you raise the price of what you have, and it causes real suffering, and the motive is purely raising profits. That's profiteering. I'd probably do the same, but it's still profiteering in my book."

Well, your "book" is wrong and you clearly don't understand simple economics. Higher prices serve an important purpose when supplies are not great enough to meet the current demand: higher prices ensure that people buy less of the product so that there is more to go around to everyone else.

Predatory pricing is not part of our economic system. Predatory pricing is against the law. In fact, preditory pricing (if I remember correctly) is when you lower your price to drive out the competition, and then raise it again after you have driven out the competion.

[Hendrix]

I would not call our oil companies an oligopoly. Short of some collusion or other illegal activity, there is enough competition in our oil supply that our free market system does work.

In short, if the oil companies are colluding, then they should be punished. If prices are going up because of supply/demand, then the market is working perfectly and the oil companies should be allowed to make as much profit as they legally can. That is basic econonics--like it or not!

[brownsfan]

"Higher prices serve an important purpose when supplies are not great enough to meet the current demand: higher prices ensure that people buy less of the product so that there is more to go around to everyone else."

Ok. So you're telling me that the oil companies are raising prices purely for our own good? That they are just trying to be sure we all have enough? I'm skeptical.
And supply and demand doesn't always work smoothly. People I work with have discussed that the price of gas isn't going to change their driving habits. But these people make a pretty good buck. There are people at the lower end of the economic spectrum where this will truely cause suffering. They don't count?

"Predatory pricing is not part of our economic system. "

Only because of anti-trust laws. In the eyes of many free market advocates, it's government interference.

[brownsfan]

"I would not call our oil companies an oligopoly"

We disagree. The prices flucuate in lockstep from place to place. There are no more "price wars". Clearly I don't have legal evidence, but the empirical evidence says it's an oligopoly.

Sorry, I know it's heresey to people like you, but I contend the free market doesn't always work.

[GSWarrior]

Will our friends the Saudis lower the price of a barrel of oil?

[ssstewart]

The thing I want to try and understand is simple, but I have yet to see an explanation as to how it works.
With oil companies always purchasing crude from whatever the source, I can underzstnad the law of supply and demand and sometimes they must purchase crude at a higher price. But now, here is the rub that someone needs to "splain..."

Let's say I am a dealer and I get a 10,000 gallon delivery for which I paid $2.50 per gallon. Then the next day after the tanker leaves, I raise my prices to $3.00 per gallon due to a calmity that has happened somewhere else in the country.

However, remember, the price of the gas I have in the tank was at $2.50 per gallon. Am I now to be accussed of price gouging? I would say yes, and that once I buy a new load at the higher price, then I should be allowed to fairly raise my price, but not before!

Sort of like picking up the can of comet at the grocery store and seeing that one price has been "stickered" over the old one (sorry, dating myself as this was before the days of bar code scanning...). Do you think it is fair for the merchant to raise the price on an item that he purchased months before at a much lower price?

That my fellow Freepers is what the government needs to investigate, not the big oil companies and what they have to pay for a barrel....(Believe me, my dad is in the oil business and we've been discussing this same thing for two days now...)

Just food for thought, but has anyone else ever wondered about this...

[Drago]

It's called CAPITALISM.....supply and demand.....economics 101.....

Maybe...but here on the West coast, supply remains the same (or better due to EPA relaxing gas blend regs...and our crude comes mostly from Alaska, not the Gulf of Mexico) and I have heard no reports of demand increasing. So why the 30 cent increase in one week? Also stations increase price once maybe twice (up to 10 cents) on the SAME fuel in their tanks, before the delivery truck comes. What is up with that?

[Truthsayer20]

We have a horrendous nation tradgedy taking place and the DNC is blaming oil companies!!

Actually, it's a great strategy for the Democrats. Why do you think Bush's poll number have been so low lately. It ain't about Iraq, it's about gas prices.