Fuel Prices

[Mr 5 0]

Originally Posted by Unit 5302

So what? So what if big companies make big profits? That's not the point here. Capping profit is inherently against the concept of capitalism. So is the lack of competition, which in a capitalist environment can easily lead to corporate greed and price fixing.

Which is investigated and prosecuted by the Justice Department. You seem to believe that the oil companies simply do as they please and that they are practically unregulated, which is about 180 degrees from the truth. This is 2005, not 1905.

The point is the profit has literally increased between 300%-600% since the merger of Exxon-Mobil. Their gas stations are not responsible for the dramatic increase in profitability.

Because they sell a lot more gas now and costs have gone down over time due to the merger. Cost control and higher profits were the reason for the merger.

Microsoft is a very poor example of a fine and upstanding company since they've been attacked in court and defeated for anti-trust violations.

Which I mentioned. Their profits are also very large, which seems to be what upsets you the most.

Even though I feel Microsoft has made it to its position largely by producing products very few people in the industry actually want or can compete with, growing their products and technology since the inception of the company.

At least you recognize Microsoft's reason for success. Giving people what they want and doing it better than anyone else is the age-old route to business growth and high profits. Henry Ford did it 100 years ago and so have many others, since. When that happens, profit will soar. That some find this natural economic occurrence some symptom of evil intents is rather pathetic.

On the other hand, Exxon-Mobil was created out of a merger between two giant corporations, allowed by the federal government despite significant risk to market competition.

That 'significent risk' is one view and is not shared by all observers.

I don't know why you keep attempting to go back to the inflation argument. It has almost nothing to do with my complaint. I'm not complaining about the price of oil or gas in itself.

I am not at all surprised that you want to dismiss the very real fact that - adjusted for inflation - gas now costs only a bit more than it did 20 or 30 years ago, even though we use a lot more of it, now. That is a significent fact, whether you wish to deal with it, or not.

I'm complaining about the price of gas that is directly related to the profit the oil companies are making, which also throws out your argument about gas taxes.

Not at all. Gas taxes add to the cost of every gallon of gas we put into our vehicles and that is another signigicent factor when discusssing gas prices.

While profits would need to increase with inflation in order to continue the same adjusted profit, that's hardly reason for a 300-600% increase over the past few years or an 80% increase in the last reported quarter.

There are many reasons for the profit increase, as you already know. That rate of profit will not be sustained as expenses will go up and other factors will also impact on the oil companies profits. You must know that, too.

I maintain that oil companies do not raise prices to control consumption, and that any person making that argument is naive. I would also wager that the oil companies have not raised their profit component enough at any one period to discourage consumption as that may begin to impact their profitability curve.

They raise prices when supply is insufficient to demand. So does every other business. C'mon! I have already stated that the fact that high gas prices normally drive down consumption is an ancillary effect of those higher prices and would occur whether the oil companies wanted it to, or not.

Onto government regulation..... Our government, led by a president with huge ties to oil companies decided to give billions of dollars of new tax breaks to the industry. Our government allowed a merger to create the world's second largest oil company despite the great concern of many analysts and consumers. Our goverment hints at an investigation of gas prices, and suddenly prices plummet for a few days quieting the unrest as prices slowly edge back up. You raising this issue is a bit like a prosecutor objecting to an admission of guilt.

The Bush Energy Bill was far too pliant toward the oil companies interests, as I have already stated. Do you even read anything I post or do you just skim and look for points to oppose?

Every time gas prices go up sharply members of congress and the public demand an investigation. They usually get it and no 'gouging' is ever found, no matter who does the investigating.

Don't get condescending with me. I'm not arguing that people that choose to live further from work shouldn't do so without considering the consequences. I live 3.5mi from my job and own two motorcycles which I use to commute frequently for a reason. Okay, I admit, I own the motorcycles for recreational purposes, but I have begun commuting much more frequently with them because it's so much cheaper.

Stating realities is not 'condescending', Kell. We all make our choices and those who choose to commute a long distance 5 days a week and then cry when gas prices go up sharply are somewhat naive.

I realize $100/mo may mean little to the majority, but it does mean something to quite a few people that aren't just making minimum wage or working part time. I'm sure a lot of people that are significantly impacted by the price of fuel are thinking "If I buy another car, that'll fix my budget issue." What do you suppose the average household making $40-60k/yr has for expendible income at the end of the month? Most people I work with have household incomes of around $80k/yr or so. From their net paychecks probably 35% is used to pay for the mortgage, 15% is used to pay for childcare, 15% goes for the car payment, 15% pays for food, leaving 20% of their maybe $52k take home for all other payments. By the time all the bills are paid, that $100 change may be a 10% impact on expendible income. Now, that being said, my model is probably a little conservative with more money being left over, but not every family makes $80k/yr.

Gas prices certainly do have some impact on the economy as a whole, beginning with each citizens household budget. I never said that they didn't. In our generally affluent country, we still pay less for gas than many, less-affluent country's drivers do, which is great, in my opinion. How much the current rise in U.S. pump gas prices will actually impact our overall economy remains to be seen.

Love the shareholder argument. Tell me what percentage of people can invest in a natural resources portfolio within their 401k plan? Seriously. How many average middle class or lower income people have investments in traditionally risky companies? Exxon-Mobil is buying back $5 billion of stock per quarter, and that where the stock is. The company, its employees and especially its high level executives. Of course, there are also a lot of very wealthy shareholders that also like the stock to go up. Few shareholders are middle class non-employee's.

Perhaps, but whomever owns that Exxon-Mobil stock has a reasonable expectation that it will perform well, as any stockholder does, regardless of their income level or sophistication. To imply that if a stockholder is not solidly middle-class they don't count is ridiculous. I thought you respected and understood capitalism?

I'm not sure why you were coming after me. My problem is not necessarily with the points MEDIK418 made, but rather with the points he didn't make. He addressed that in his last post, and I'm satisfied.

I simply disagreed with some of the things you posted and wanted to give another point of view. That your screen name is on the posts is irrelevant. I would have made the same replies to anyone who held the same opinions on the same issues.

As for your points, I don't see as they are necessarily relevent to my complaint or even correct under close examination.

I think they are clearly relevant and your opinion of their accuracy is open to debate, which is what the forum is for, isn't it? However, I am getting tired of going over the same basic ground and am quite willing to give you the last word here in order to conclude our exchange, as the price of gas has dropped and the issue is becoming stale at this point...at least, for me.