Posted on 11/13/2005 4:30:25 PM PST by Incorrigible
When supply drops and demand stays constant, prices rise. This is obvious to all thinking people -- if not to members of Congress. Those Senate hearings on gas prices illustrated for all to see just how tenuous a grasp these inside-the-Beltway types have on the science of economics.
Consider this exchange between U.S. Sen. Pete Domenici (R-N.M.) and Exxon-Mobil CEO Lee Raymond. Domenici had importuned the assembled oil executives to advise him how to answer the typical constituent who asks, "How is the price of oil set?"...
"The price is set on the world market by willing buyers and sellers, as to what willing sellers are willing to sell it for and willing buyers are willing to pay for it."
"All right," responded Domenici. "Now, who makes the profit in that?"
"The seller, you dimwit!"
Actually, that's what I would have said.
...There is no area of commerce in which the great mass of Americans hold such superstitious belief as in the oil market. The market itself is relatively transparent, but this doesn't stop the typical American from developing conspiracy theories that stop just short of the idea that oil enters the supply chain via UFO.
...So why would a senator choose to lecture the American profiteers and not the foreign profiteers? The answer is simple: Because he can. The foreign oil executives can quietly count their cash. Meanwhile the domestic execs are threatened with a windfall profits tax. Thinking of moving your company overseas? There's a good reason.
What is most bothersome is that the congressmen leading this effort are Republicans. The Democratic Party exists to bash hard-working capitalists. But the GOP is supposed to be for free markets and against nutball conspiracy theories.
(Excerpt) Read more at nj.com ...
Do any of the our so-called leaders in the Senate, have any idea what "replacement cost" is and what "inventory profit" is. These idiots might take Economics 101 and learn a little bit!
This is another example of Democrats trying to take an issue that they think the "little people" will rally to.
They know that people hate high gas prices (even though most Dems have said we NEED high gas prices to encourage conservation.)so they look "big" by attacking the oil companies.
They hope that most people don't know enough about economics to question them, so they posture and preen in front of the cameras.
The thing is..gas prices have gone down, so the short-attention span of the American people have already moved on to something else.
(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie.Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")
That would be the government collecting increased royalties. The oil companies also collect more but pay out more with increased fees for drilling rigs and the inflated price of steel. So tell me Senator, what is the government doing with all this excess profit?
"I drive a pickup truck at home," Hastert said. "Every time I pull up to the gas pump and fill it up, it's $60."
That's because a you drive a gas-guzzler, you big-spending, power-drunk, socialist bone-brain!
Obviously, Domenici is so drunk on power that he can't think straight, similar to actually being drunk on alcohol!
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