Should oil companies and investment agencies be allowed to continue to ruin this country with their greed?

Question

Or should somebody step up and put a muzzle on the hungry lion whose only interest is self preservation. Why should the freedom of private industry be allowed to put the whole nation in bondage?

Answer 1

I'm surprised that the government does not want to break up the oil companies. That's what happened when I worked for AT&T back in 1985. It was a giant company that had driven everyone else out of the phone business, but it was not as evil as the oil companies.

Answer 2

I think there should be what is called a "price cap" placed on oil and it's products, for example 1 gallon of gas would be a reasonable price of 2.25 a gallon. there is nothing they can do about it.  If an embargo is put in place they will lose. And if we have the backup of other nations we will surely put them in their place.

Answer 3

Just how much profit is enough for an industry to make in your mind? ... Especially when you consider that shareholders are expecting some return on their investment... You know who shareholders are, right? People like you and me. Well, as it is, the oil industry makes between 6 and 8% profit! That isn't even high compared to many industries. The Libs, supported by a BIASED media, like to quote the $$$s earned, but they steadfastly  avoid what that comes down to as percentages. Its a lot of money, because oil is the biggest industry in the WORLD.

Here's another little tidbit... Already, the government gets 40% of the oil industries profits. Just how much more must they give to make YOU happy? I don't see the government trying to give some of THAT back to the common man. They just want to slam "Big Oil" more.

And I bet you are one of those folks who say Big Oil should be exploring alternative fuel sources. Well where are they going to get the money... with only 8% profit and Uncle Sam taking another 40% of their income.

So, if you want to go after someone who is greedy, go after greedy politicians and socialist environmentalists who block our ability to be energy independent.

Answer 4

Your premise is false.

the greedy oil sheiks of the Middle East are the ones ruining this country.

they are the ones with the oil cartel.

If you want to solve the problem of the oil companies, the solution is to give the oil companies more competition.

You give the oil companies more competition the way that Franklin Delano Roosevelt did.

You form a government corporation to compete with the industry.

That way you make certain that there is always supply of goods available at the lowest price possible.

for example. We could form a government corporation to drill for oil on Fedearly land and also build a federal government refinery to refine that oil.

The reifned products, such as gasoline, diesel and heatingoil could be sold on the open maeket in competition with the commercial oil companies.

that would prevent the commercial oil companies from gouging us with excessively high prices.

Price controls and price caps do not work.

If the oil companies must pay $130 per barrel of oil they cannot sell gasoline to us for less than the cost to buy that oil, refine it, distribute it and pay taxes on it.

However a government corporation that competes with them will increase the supply, forcing prices down and prevent price gouging.

Answer 5

Get a clue.

"8 cents on the dollar!!"

Answer 6

Should they be reined in--yes. But this is not abut the "freedom of private industry."  In saying that you've bought into the oil company/Bush propaganda just as much as the sheep  who still follow Bush.

The oil industry is not a free (capitalist) market. If it were, we would not have this problem because competition woud be holiding prices to within reasonable levels. We might--probalbly would--have some price increases, but nothig like this.

Here's the basic economics. Ina free market (a real one) if one producer tries to raise the price too high, others will move in, undercut him to capture his market share and increase their own profits.  In the same way, if prices are unusually high (in terms of the profits being made) in an industry, entrepreneurs will start entering that industry, attracted by the high returns--and bringing the prices down by intensifying competition.

What we have is NOT a free market.  Almost all of the foreign oil we import is produced by governments who are organized into a cartel (OPEC).  The handful of large oil companies  are little different (one--Citgo--IS owned by one of these governments (Venezuela). They act in concert,along witht ee cartel.  The normal competetitive mechanisms of a free market are not operating.

Further, in collusion with politicians (primarily the "neoconservative" Bush administration and Republicans, but also some Democrats) have established enrgy policies that keep new entrants out of the markets the oil companies dominate.

My point is simple: we need to curtail these companies'  greed. ON tha tyou are 100% right. But the way to do it is to restore the free marke, not to regulate it as you suggest.

Answer 7

What you call greed is profit that gets paid back to share holders that are retirement funds that keep your grandparents alive. Social Security will not do it.

Answer 8

I get the point  regardless of the shareholders views. Regulate they're a*ses  and let the government pay them off right before they take over. just like Mexico's two dollar a gallon government ran fuel system.

Answer 9

They're not ruining this country with their greed.     In a market system with a stable currency, greed works to everyone's advantage.    The problem is it's not a stable currency.

Speculators perform a function in a commodities market - they generally take the opposite position of people in the industry who want to hedge their exposure to price changes.

Thus they enable the heating oil dealer to hedge his fixed price volume, which is what enables the dealer to offer fixed prices, which is what enables homeowners to fix their heating bills.

Generally, volatility DECREASES with volume.   So, the problem isn't speculators generally, bad behavior among speculators (such bad behavior exists but it is not what causes global commodity bubbles), or even the amount of speculation, all other things being equal (because there is a short position for every long position).

The problem is with the supply of money and credit.

All hedging and speculating is done on margin - short term credit.     Short term rates are ultimately a function of the cost of funds - the federal funds rate.    When the Fed drops the federal funds rate aggressively, the differential between the cost of funds and the future value of a comodity increases.    The speculators aren't deliberately trying to rig prices nor can they on a global scale - they're following their analysts' spreadsheets that compare the cost of funds to the future value of the commodity, and as noted above, that differential grows when the Fed aggressively cuts rates.    This causes more money to flow into long positions, continuing to drive up the price of the commodity.    If the Fed wishes to maintain the low cost of funds, it pours more liquidity into the market - thus the differential only grows, causing more money to flow into long positions, growing the differential further, etc......

That's the anatomy of a commodity bubble.

Right now the commodity is oil.

We've seen this with natural gas a few years ago, with metals, and with housing - that's a complex analysis but in the end, it too was a bubble.

I'm not suggesting that supply and demand issues shouldn't cause a price increase, just not a bubble like this.    Generally the asset bubbles do occur with assets that were somewhat undervalued to begin with (natural gas, metals and housing are also examples) - - but they magnify the supply-demand picture dramatically.

Oil should be at $70/bbl and gasoline just under $3.00/gallon.    If the Fed were to raise the Federal Funds Rate to 4.00% from 2.00% that's where prices would go.    You'd be told on CNN that it would be the result of softer demand as a result of a slowing economy as a result of the rate hikes, but that's not true - what it would be is the traders no longer having an arbitrage because the gap between the cost of funds and the future value of the commodity would have closed.

Experts think the Fed will "stay on the sidelines" this time around and not raise rates - but the Fed is not on the sidelines.    The Fed is busy tilting the entire field.