Individual Liberty — Individual Responsibility 

Yet another silly question

Are you ready for this one?

Tell me please, where does every single penny that the "big oil" companies receive come from?

No, I'm not asking where is it minted. I'm asking where do the "big oil" companies get their money?

Are they stealing it? Do they hold a gun to your head when you go to the gas pump and tell you to fork over the cash? Or do you buy their product of your own free will like I do?

Does the government simply print money and walk up to the "big oil" company executives and say "here, have some cash"?

Isn't it ultimately true that every single penny that "big oil" receives comes from the consumer?

Isn't it ultimately true that every single penny that "big oil" spends on anything comes from the consumer?

So… if that's true, who would have ended up paying the 25% tax on "unreasonable" profits earned by "big oil"? You know the tax I'm talking about the one that "Republicans refused to allow debate on".

The oil companies own some of the property where domestic oil is pulled from the ground. They have to purchase the oil that they import from other nations though. They don't own that land, other nations own it. The Saudi's own the oil fields in Saudi Arabia for example. In order to supply consumer demand, "big oil" has to spend a portion (a significant portion actually) of the money they receive from consumers to purchase that oil.

Regardless of the amount of profit that the oil companies make, every penny that they spend to purchase that foreign oil is provided to them by consumers that purchase their product from "big oil". If the price goes up, 100% of the cost of the oil is ultimately paid for by the consumer isn't it?

Who defines a "reasonable" profit? Is the four percent profit that the oil companies make "unreasonable"? If so, what about the profit made by software companies like Microsoft, IBM, or Apple?

If the government should decide that the profit margin of the oil companies is "unreasonable", what about the tax margin that the government takes in? After all, even by conservative estimates (no, I don't mean estimates made by people holding to a conservative ideology, I mean relatively modest estimates) the government (federal, state and local combined) is taxing "big oil's" products at more than twice the "unreasonable" profit taken by "big oil".

If the government increases the tax that "big oil" has to pay on "windfall" profits, who do you think is ultimately going to pay that tax? Do you honestly believe that "big oil" is going to pay it in the end? With what money? Some magical mystical source of money unrelated to the consumer? Or don't you believe that that tax is going to be passed on to the consumer in the end?

Do "antitrust" regulations and laws that apply to companies doing business within the United States apply to nations doing business outside the United States? If so, since when? How is it that our Senate thinks that they do… or should?

When I was in college I had to take courses in economics. One thing that we were taught in "entry level" economics courses was about the relationship of price to supply and demand. Surely you're familiar with the concept. If you have a large supply of a commodity relative to demand, then you can afford to charge a low price for the commodity's sale, and in fact will have better sales if you do. On the other hand, if you have a limited supply of a commodity, and the demand keeps growing for it, you must raise the price, or soon that limited supply will be no supply.

Our Democratic senators don't seem to understand this concept. We are told that it's ridiculous to assume that trying to increase our domestic supply of oil could ever have an impact on prices. Meanwhile, artificial restrictions on our domestic supply are met with increasing demand for the limited foreign supply and somehow rising prices must be the result of "price gouging"?

Does anybody really believe that?

One more question…

If you have a limited supply of a commodity and you have a growing demand for that commodity, and through government regulation the price for the commodity is frozen at a particular level (to prevent "unreasonable" profits), what do you think the result will be?

In case, you're stumped by the question, consider the few times when a gasoline retailer decides to sell his product at low (under a dollar per gallon) prices… every now and then you hear about it on the news. As soon as the word gets out, people flock to that retailer. There are soon massively long lines at the pumps (remember the Carter years?) and before you know it every drop of gasoline that the retailer has has been sold.

Is that what we want? Long lines, gas shortages and the like? It certainly sounds like that's what Senate Democrats want to me.

I TOLD you it was a silly question.

Cross posted to NW Bloggers.