Posted on 07/23/2007 6:17:52 AM PDT by Daffynition
The U.S. House of Representatives recently passed legislation instituting penalties of up to $150 million for companies and up to $2 million and 10 years' imprisonment for individuals found guilty of gasoline "price gouging."
But the real gouger driving up gasoline prices is not the private sector – it is our government.
To "gouge" means to extort, to take by force – something that oil companies and gas stations have no power to do. Unlike a government, which can forcibly take away its citizens' money and dictate their behavior, an oil company can only make us an offer to buy its products, which we are free to reject.
Because sellers must gain the voluntary consent of buyers, and because the market allows freedom of competition, oil and gasoline prices are set, not by the whim of companies, but by economic factors such as supply and demand.
If oil companies could set prices at will, surely they would have charged higher prices in the 1990s, when gasoline was under one dollar a gallon.
Because oil companies and gas stations cannot set their prices arbitrarily, they must make their profits by earning them – by efficiently producing something that we value and are eager to buy. In so doing, they assume great risks and expend enormous effort.
Over the decades, oil companies have created a huge infrastructure to produce and distribute gasoline by investing hundreds of billions of dollars in prospecting, drilling, transporting, stocking and refining oil.
In the absence of political factors like the 1973 OPEC oil embargo or the Gulf wars, the net effect of oil companies' pursuit of profit has been to drive the price of oil and gasoline, not up, but down.
The price of a gallon of gasoline (in 2006 dollars) fell from $3 in the early 1920s to $2.50 in the 1940s to $2 in the 1960s to under $1.50 in the 1990s.
This downward trend is all the more impressive because it required the discovery and exploration of previously inaccessible sources of oil and because it persisted despite massive taxation and increased government regulation of the oil industry.
When we see the price of gasoline today, we should not accuse oil companies of gouging but rather thank them that prices are not much higher.
The true culprit that we should condemn for driving up prices is the government, which has engaged – with popular support – in the gouging of both the producers and consumers of gasoline.
Federal and state governments have long viewed gasoline taxes as a cash cow. In 2003, for instance, when the average retail price for a gallon of gasoline was $1.56, federal and state taxes averaged about 40 cents a gallon – which amounts to a far higher tax rate, 34 percent, than we pay for almost any other product.
(Contrary to popular belief, gasoline taxes do not just pay for the roads we drive on; less than 60 percent of the gas tax-funded "Highway Trust Fund" goes toward highways.)
Along with high taxes, environmental regulations – justified in the name of protecting nature from human activity – have dramatically increased the production costs, and thus the price, of oil and gasoline.
The government, for example, has closed huge areas to oil drilling, including the uninhabited wilderness of ANWR and the out-of-sight waters over the Atlantic and Pacific continental shelves. This, of, course significantly reduces the domestic supply of oil.
The government also has passed onerous environmental regulations that make it uneconomical for many old refineries to keep producing (50 out of 194 refineries were shut down from 1990 to 2004) and discourage new refineries from being built (no major refinery has been built in the last 30 years).
Regulations such as these push the surviving refineries to operate at almost full capacity, creating a situation where any significant reduction in the production of some refineries (e.g., from a hurricane) cannot be compensated by increased production in others.
Exorbitant spikes in prices, which many attribute to oil companies' "gouging," are actually caused by government constraints.
If we want to stop the irrational forces that have been driving up the price of gasoline and our cost of living, we must demand that our elected officials eliminate the regulations and excessive taxes that restrict the producers of oil and gas.
It's past time to stop gouging oil companies – and ourselves.
Greed is not a Conservative trait. Be gone troll. Blackbird.
Please show me where it’s a rule. I know it’s not, and I knw you will not find where it’s posted.
Yesterday you claimed $2.95 at Exxon on Old Hardin then in a later post stations on Main St through the Heights, $2.98 - $2.99.
So, do stations in Billings vary in price? Or is there not one cent difference?
So you work for free, right? If you don’t, you are a hypocrite, plain and simple.
It’s odd a liberal, anti-American, anti-capitalist is calling ME a troll. Talk about projection! Muahahaha!
Try dragging old dirt from thread to thread. You won’t last much longer here if you do.
That dope is getting really wrapped up in his own lies. It’s kind of funny to watch him self-destruct.
Yes I did, after your "source" claimed it was $2.96. I proved your source wrong, again. That same source "claimed" $3.00 on Central Ave., not the Heights, to which I proved your source was wrong. I also told you I hadn't been out today, so it wouldn't be prudent for me to comment on the other stations, beyond the "snap shot" in time as I drove past them YESTERDAY. I don't know what they've done in the last 24 hours. What does your favorite .com have to say about it? Have you caught up yet? Blackbird.
Try and keep up, I work for living. You on the other hand, as you've stated, won't to "earn" your early retirement using your dividend check. Instead of living off of your Government transfer of wealth, you choose to live off of Corporate transfer of wealth. If you're comfortable with it, so be it. Simple is your MO. Blackbird.
Actually, I think you should post the pictures. Make sure you include today’s newspaper with the date visible. Otherwise, you have no more credibility than those posting at the gasoline pricing web sites.
Prove a single lie pinhead. This is an open forum, my post are there, pull the lie and post it. If you can't you really should STFU before I hit the abuse button on you, a favorite past time to rid US of lying trolls. Blackbird.
Hit the abuse button, liar, i did nothing wrong. If the mds are going to get rid of lying trolls, you should be worried, as you are the anti-capitalist troll here.
I'll get you the pic's next time I go out. I've asked if you wanted this for the last 3 days. You want a copy of the Billings Gazette, you pay for it. That rag doesn't come near me or mine. What does your favorite .com have to say today? I need a baseline so you don't drift back into the fantasy land that was 4 days ago. Blackbird.
That's just as greedy as me investing, and thereby heping out the American economy. 70% of adults are investors, so if you have something against it, it pus you squarely in the minority. Nothing wrong at all with investing. It's the American way, but you are anti-American, so I guess i can see why you don't like the American way of wealth building.
America was built on a strong work ethic, being a Conservative I would know. Blackbird.
Hey, you want to stay poor and squander opportunities, fine. I’m getting rich and loving it.
If it’s so wrong, why do the vast majority of American adults do it? You have to be a total idiot to think there is anything wrong with investing. I mean rock hard stupid.
Anyone who knocks corprations and investors as hard as you do is no conservative. There’s anther lie right there, liar!
First, I'm not anti-capitalist moron, just anti Greed. I know that's a concept that escapes you. When is enough enough? Is there an upper limit to your ubercapitalism? Or does it stop when you get yours? I've been here many years longer than you troll, or are you one those daunted retreads! Should today be my last day on FR, my life goes on. I asked you in plain english (perhaps that's the problem) to post my lie. You have failed to do so, hence the troll label that you wear so well. MDS, what is that, mod derangement syndrome? FR history does dictate that trolls suffer from that, given enough rope to hang themselves. I not known to hit the abuse button. I normally just wait for the rope to snap tight and enjoy the show. Blackbird.
Once again, real slow, see if you can keep up OK!? GREED......IS.......NOT.......A.......CONSERVATIVE.......TRAIT. I really can't slow it down for you anymore, it's up to you to keep up. Blackbird.
Ya’ll have to formulate your next assault in my absence, I’m “walking” to my local Pub to get a cold one , or two or three! Cheers! Blackbird.
You have yet to show how investing is greed. What a stupid premise.
Oh, you are an alcoholic. Maybe that’s why you are ignorant and mean.
This ought to help you some. http://www.yellowpages.com/Billings-MT/Alcoholism-Information-Treatment-Centers?m=any&t=substance+abuse+treatment
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