I am amazed that Chuck Grassley has suddenly become socialist. I read an article today in which old Chuckie states that he thinks that oil companies have "a responsibility to help less fortunate Americans cope with the cost of heating fuels". What? Where does this come from? Just because oil companies made big profits doesn’t mean that they have to give them up. A windfall profit tax is not the answer here folks.
What’s next? Does this mean that Kraft Foods will now be required to donate part of it’s profits to food banks? Or perhaps GM and Ford will be required to give a portion of their profits to public transit programs? Notice the word REQUIRED.
Let’s get this straight. This is JUST ANOTHER TAX. Call a spade a spade. When someone makes enough money to get noticed they will be found, taxed and shamed by Washington. This makes me sick.
No one has taken the time to understand the economics of oil prices. All people see is the price of gas and how many billions of dollars in profits the oil companies have made.
Oil prices are determined by the futures market. When there is ANY bad news, traders will buy up futures at any price they can. As more bad news comes in (a fire at a refinery, a hurricane, political instability in the Middle East) they keep pumping up the price of oil by buying more futures and actually trying to spread the bad news as far and wide as they can. The impression that the world is running out of oil is what they are after. In each barrel of oil 10 to 20 dollars of the price can be attributed to this kind of speculation.
Where does the rest of the price come from? It’s strict supply and demand. Right now we are on the shortage part of the oil curve. If history holds true, at some point in the future (6 months? 2 years? who knows) we will be on the surplus part of the oil curve. Does anyone remember the 70′s? The same thing happened. We had a reduction in capacity and an increase in demand. This lead to a spike in prices and shortages of product. Once the oil companies realized that the demand was here to stay they increased production to the point that we had a price collapse in the 80′s. Part of running a tight ship in the oil business IS maximizing your output at the RIGHT PRICE. It’s not about producing as much as you can and selling it for next to nothing. When you have a non-renewable source for your product you must sell at the right price to maximize your investment.
This all brings me to the most frustrating part of all of this. Why must the media contribute to the problem? I have not seen one main stream media outlet come up with a story about the truth of all of this (as I have explained above). The only thing you will hear is that oil company X made profits of Y and that this is unconscionable. Then you will hear them giddily report on the windfall profit tax that is being proposed. Is it just me or is the liberal media being at least partially duped into helping the people they so hate (i.e. people who have accumulated money, like the speculators and oil companies).
What is Grassley thinking?
I am amazed that Chuck Grassley has suddenly become socialist. I read an article today in which old Chuckie states that he thinks that oil companies have "a responsibility to help less fortunate Americans cope with the cost of heating fuels". What? Where does this come from? Just because oil companies made big profits doesn’t mean that they have to give them up. A windfall profit tax is not the answer here folks.
What’s next? Does this mean that Kraft Foods will now be required to donate part of it’s profits to food banks? Or perhaps GM and Ford will be required to give a portion of their profits to public transit programs? Notice the word REQUIRED.
Let’s get this straight. This is JUST ANOTHER TAX. Call a spade a spade. When someone makes enough money to get noticed they will be found, taxed and shamed by Washington. This makes me sick.
No one has taken the time to understand the economics of oil prices. All people see is the price of gas and how many billions of dollars in profits the oil companies have made.
Oil prices are determined by the futures market. When there is ANY bad news, traders will buy up futures at any price they can. As more bad news comes in (a fire at a refinery, a hurricane, political instability in the Middle East) they keep pumping up the price of oil by buying more futures and actually trying to spread the bad news as far and wide as they can. The impression that the world is running out of oil is what they are after. In each barrel of oil 10 to 20 dollars of the price can be attributed to this kind of speculation.
Where does the rest of the price come from? It’s strict supply and demand. Right now we are on the shortage part of the oil curve. If history holds true, at some point in the future (6 months? 2 years? who knows) we will be on the surplus part of the oil curve. Does anyone remember the 70′s? The same thing happened. We had a reduction in capacity and an increase in demand. This lead to a spike in prices and shortages of product. Once the oil companies realized that the demand was here to stay they increased production to the point that we had a price collapse in the 80′s. Part of running a tight ship in the oil business IS maximizing your output at the RIGHT PRICE. It’s not about producing as much as you can and selling it for next to nothing. When you have a non-renewable source for your product you must sell at the right price to maximize your investment.
This all brings me to the most frustrating part of all of this. Why must the media contribute to the problem? I have not seen one main stream media outlet come up with a story about the truth of all of this (as I have explained above). The only thing you will hear is that oil company X made profits of Y and that this is unconscionable. Then you will hear them giddily report on the windfall profit tax that is being proposed. Is it just me or is the liberal media being at least partially duped into helping the people they so hate (i.e. people who have accumulated money, like the speculators and oil companies).
Manly