Posted on 06/14/2008 12:50:48 PM PDT by jazusamo
And if that oil becomes unaffordable in sufficient quantities to provide what the people need, all of the above would be coming back, except the environmentalists will allow none of it.
Oil prices effect the price of everything. When people can barely afford and in some cases no longer afford necessities, odes to the wonderful oil companies will be recited at the minstrel's peril. As will politicians babbling meaninglessly about ending our "addiction" to oil. Their solution to our "addiction" will be our demise, if we allow it.
Sam, you have to get with the times, comic books are now called "graphic novels".
Reading comic books are so demeaning to ones self-esteem, comic books are for dummies, but graphic novels are for the reading comprehension impaired < / s >
No as long as they provide a service to me that I can not provide for myself, it does not matter to me how much they make and it is not my business to take anything from them.
Does capitalism have a limit? Or is any profit, no matter how obscene, justifiable?
Yes and yes. Now if you want to talk about what they do with that money we might have something to talk about. If they use it for unscrupulous endeavors (like Soros), that's another matter.
"If you had the only water stand in the desert, and were charging $50 a glass, and an obviously dying man crawled up to you with $49.95, would you take the "loss?""
Of course they would. They don't want their customers to die. No profit in that. Commies on the otherhand could care less if I die, I'm just another comrade they don't have to feed.
Is compassion out of bounds for the corporate conscience, or do any other human principles apply in that atmosphere except greed?
Numbers don't show compassion, they just add up to something. When the public reacts to the prices negatively then the numbers will change and the companies will make a change. It is all devoid of "feelings". If you want something done about the price then scream at the congress to open up resources to help the companies meet their goals.
Is capitalism at its extreme any more defensible than communism in terms of its potential for human misery?
Only if you have monopolies or the market is bottle necked by legislation effecting how the market adjusts. Communism is a social big daddy that wants to tell everyone how to eat, think, live and die. I would rather tell oil companies that I will walk to work before I pay their prices then have the commies tell me how far I am allowed to walk or if I can even choose to walk or drive.
You keep talking about profit MARGINS. I'm talking about absolute dollars in profit. If 8% translates into trillions, then yes, it's probably excessive. Let's put it this way, it certainly allows for a certain flexibility in policy.
This...??? From a FReeper?
My beeber is stuned...
What part of the 8 cents per gallon do you want them to give back to you?
What about those years when they don't make "trillions" -- but instead lose "trillions"?
Would you give it back?
Aside from the apparent contradiction in your stance, if capitalism has a limit, what is it? And if profits are always justifiable, how can capitalism have any limits?
They don't want their customers to die. No profit in that.
There is also a point where profit reaches a point of diminishing return. Even now, there is talk of regulating oil companies and in many cases, their assets have been seized and nationalized. When greed exceeds the consumers' ability to bear its cost, revolutions result.
Numbers don't show compassion, they just add up to something. When the public reacts to the prices negatively then the numbers will change and the companies will make a change.
The people can't change. They can't stop driving. Airplanes can't stop flying. Truckers can't stop hauling their wares. Our entire culture, built over 100 years of industrialized urbanization, is based on the notion that energy is readily available at a reasonable price. If it is not, our cities don't work anymore, and our economy collapses.
It is all devoid of "feelings". If you want something done about the price then scream at the congress to open up resources to help the companies meet their goals.
Congress doesn't own the "resources." WE do. Blaming Congress is the easy way out. It's time we admit that the capitalist system falls apart at the extremes, and that Big Oil is the extreme of the extreme: completely amoral and driven solely -- to the exclusion of all else -- by an insatiable appetite for more and more profit. Your statement about "the numbers" confirms that. Morality and mega-business are not compatible. Exxon has no soul.
Only if you have monopolies
... which Big Oil has ...
... or the market is bottle necked by legislation effecting how the market adjusts.
... which the trade in crude is.
Communism is a social big daddy that wants to tell everyone how to eat, think, live and die. I would rather tell oil companies that I will walk to work before I pay their prices then have the commies tell me how far I am allowed to walk or if I can even choose to walk or drive.
Your characterization of communism is hyperbolic and inaccurate. Under a communist system, the government would own the oil companies and their profits would be used to purchase goods and services which would then be distributed to the citizens based upon their needs.
Good night! Big Business in bed with the Regulation Industry? This tells me that inorder to swim with the sharks, you have to be one. And this culture is now affecting what I see is the Archilles heel to our survival: access to cheap energy. The way we produce energy will be the breaking point. With all these forces pushing this nation down hill, it is my fear that the tipping point is right around the corner.
My question is will McCain understand the nature of what is before us and act upon it in a way that does not further aggravate the problem?
I don't see how it can be 8 cents a gallon when they are making a 10 percent profit and gas is now costing $4 a gallon.
What about those years when they don't make "trillions" -- but instead lose "trillions"?
Yet oddly enough, they stay in business. Must be the altruist in them.
Would you give it back?
I have. With interest.
You think that's a good idea?
What?
Are you kidding me?
If I have a margin of 8%..and make a 10 million profit a year.
It's okay, but because I've made a trillion, it's not?
Who's going to decide how much is too much, our esteemed Congressmen?
You and I SHOULD be blaming "BIG GOVERNMENT"....not companies that provide MILLIONS of people jobs. Not companies that pay BILLIONS to the government.
Please my EYES hurt after reading another FReeper going down the WRONG road............
I'm not naive enough to think that any business is altruistic in nature. The “good” that results from the risks of business (job provision, investor returns and supply of a needed product) are a by-product of a successful venture.
If the government starts to define acceptable profit and CEO salaries, we are in trouble. How about apartment complexes...too much profit from rent? How about food companies..too much profit from food sales? How about Starbucks...well, you get my drift.
IMHO, we do need to develop alternate energy sources. And we need to tap into our own oil resources.
No. They are in business to make profits. Profits provide jobs, pay taxes, shareholders, pensions etc. I don't know about you but I don't think $.04-.10 cents a gallon is a huge profit especially when you consider what the investment to achieve it is. Their profit margin is around 8-10%. Most companies in business as we speak could not survive on a margin that small. Also, gasoline is a very small portion of oil company profits. Most of it comes from oil byproducts such as petro chemicals, clothing products jet fuel and many more too numerous to go into, Furthermore, only about 30% come from the US, the rest is from the world market. As an aside Exxon/Mobile is the 5th largest oils company and is almost small compared to the others.
Does capitalism have a limit? Or is any profit, no matter how obscene, justifiable?
No and yes. The market will equal itself out. It wasn't that long ago when the same oil companies were losing money and almost bankrupt. BTW, jsut who should be in charge of deciding what is an "obscene profit"? And if you want to go there, just how much money should YOU be allowed to make? Would you like to have some unaccountable slob in the government dictating that to YOU? Slippery slope my FRiend indeed. After all YOU REALLY don't NEED that excessive obscene income now do you?
If you had the only water stand in the desert, and were charging $50 a glass, and an obviously dying man crawled up to you with $49.95, would you take the "loss?"
That is an ad hominem argument and not even worth addressing
Is compassion out of bounds for the corporate conscience, or do any other human principles apply in that atmosphere except greed?
This is not a valid argument. Corporations are legal entities and by definition cannot be greedy though the people who run them can be. If you want compassion you should be contacting you congress critters, they make three times what the oil companies make just sitting there, doing nothing with their hands out. How many times did they fill your tank with product? They just take and take, driving prices up. Take the oil companies profit out of gasoline you would save 10 cents or less. Get the government and their regulations out of the way, gas would be more than reasonable. Oil companies are not the enemy here, government is.
Is capitalism at its extreme any more defensible than communism in terms of its potential for human misery?
Mercy, you can't be serious. You are trying to compare a system of government owned companies and production vs. free market enterprise with private ownership? I'll say this about that. One system has proven work for the benefit of all people (capitalism), the other one has proven the opposite every time it has been tried.
I'm asking in the interest of a rational discussion. Try to keep the name-calling and sophomoric insults to a minimum. ... And please, don't channel Ayn Rand to me. I've read Atlas and The Fountainhead
I've been rational as well as polite with you. I've not called you names, insulted you nor referred you to Ayn Rand. You must have confused me with someone else. I'll look forward to your reply
Capitalism has limits in that the market can only sustain certain prices. When the market can not sustain the price then it goes down. No contradiction here at all.
Profits are always justifiable if the market can handle it.
When greed exceeds the consumers' ability to bear its cost, revolutions result.
When greed exceeds what the consumer can pay then the consumers stops paying and the price goes down. The only time there is a revolution is when big daddy tells you that you have to drive your car at a certain price and you will pay it or go to jail. There is no freedom to choose in communism and socialism.
If it is not, our cities don't work anymore, and our economy collapses.
Exactly...and that's why the price will go down before that happens. People are cutting back on driving right now as we speak...only because they do still have a choice. If the commies set the price, do you really think they will care if a few more people go into poverty? Just a few more uppity free thinkers who have been crushed and put into servitude to the master?
Congress doesn't own the "resources." WE do
Congress is refusing to open up the resources...if they don't own them they sure are acting like they do.
As for the rest of your clueless rant..I won't answer.
My question to you is...how in the world have you servived on FR all these years? You are a flaming commie sympathizer. I would prefer that you go see your masters on DU.
Good day and stay the heck out of my wallet.
Good point. I should have included that in my post to I.J. as I responded yes and no
Good post, you stated it well, IMO.
Govt has no right to come in and dictate prices or profits, that’s what people like Hugo Chavez do, Jimmy Carter tried it also and it didn’t work.
The RATS in our govt somehow want to tax our oil companies so we’ll be paying less at the gas pump, that’s ridiculous.
If they want to truly lower the price of oil products they have to open up drilling in our country thereby increasing the supply of crude and forcing the price down.
I don’t believe they’re interested in lowering oil prices, they see the oil companies as a cash cow for their social programs and don’t care that we pay for them.
$4/gal is the retail price.
Big Oil is mostly in the refining business, with very little in the way of retail sales.
Distributors, jobbers and retailers costs and margins -- plus federal and state taxes -- have to be deducted from the retail cost per gallon to arrive at the refiner's income.
So, yes, Big Oil earns about an 10% profit margin on sales -- spread across gasoline, lubricating oils, asphalt, paraffin, naptha, everything else that comes out of a barrel of crude oil.
However, Big Oil's ROI (return on investment) is less than their profit margin on sales, because the oil business is very capital intensive. In order to justify its very existence, any publically-held company has to produce an ROI in excess of the Fed Funds market -- which, for the 2007-08 fiscal year will average about 4.5%.
Otherwise, investors have no incentive to invest in a business and would be better off with a safe investment in federal securities.
At bottom, the ROI objective is why Big Oil's profits will escalate to larger absolute numbers with higher prices. They need to make 8 cents a gallon on $4 gasoline, but only 4 cents a gallon on $2 gasoline, e.g.
At bottom, Big Oil is no different than any other large corporation in the United States. They have costs, they have research and development expenses, they make and sell a product...and they need to make a profit to stay in business.
By the same token, they are in competition with each other. If they raise their prices without it being a response to costs, they know they could lose business to the station down the street.
There is no mystery to it.
The MSM never mentions the record tax collections the federal government is profiting from oil company success either.
The Federal government has nationalized the energy industry in
America. There is plenty of private capital available to build new power plants and explore new oil and gas fields. But the government requires an application, and rarely signs the permission slip. Government is rationing American energy availablility, and responsible for high price speculation because they have the monopoly on supply access.
When we can’t build a nuclear power plant or a new refinery for 40 years because the government, is the controlling factor.
Bravo - great article.
I suggested yesterday that rather than boycotting Exxon-Mobil, that we could really hurt them by not driving our cars as much.
We can recruit our bicycles, we can get a horse, we can maybe used those new scooters the security people use in the malls.
All we need is a little roof on it and a basket for a few groceries and we are set.
Oh, and no need to boycott Exxon-Mobil - they announced Thursday they are quitting the retail selling of gasoline.
Yep, they don’t know that I worked for 10 years at Mobil constantly worrying about each and every round of lay-offs. I lasted until the Exxon/Mobil merger when I had the perfect package to get out.
There only way to cut costs was fire people, quit producing oil in the U.S. due to the extreme environmental requirements.
And they are the ones posting on FR.
I can just imagine DU.
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