Wednesday, November 09, 2005

Weep for your country

Via Drudge


'Oil Company Execs Defend Profits to Senate'
Double-take.
'Oil Company Execs Defend Profits to Senate'
I don't really even know what I can say to that. Now you have to defend the fact that you make high profits? It boggles the mind.

What complete ignorance of market forces. This is intelligent design economics at its worst--the belief that the price of any good is dictated by the people selling the good, rather than supply and demand. The high profits of oil companies only means that oil production is capital intensive, and very risky.

The Senator's quotes from the article are saddening, and should make a libertarian out of anyone. These are the people were giving power to?
There is a "growing suspicion that oil companies are taking unfair advantage," said Sen. Pete Domenici, R-N.M. "The oil companies owe the American people an explanation."

I'd say it's Pete Domenici's former economic's teacher that owes the American people an explanation.

"Your sacrifice appears to be nothing," Sen. Barbara Boxer, D-Calif., told the executives, citing multimillion-dollar bonuses the officials are receiving amid soaring prices at gasoline pumps and predictions of more of the same for winter heating bills.
According to Open Secrets, Barbara Boxer raised $16,220,791 in fundraising from 2001-2006. I think that qualifies as multimillions. She spent $15,820,354 of it on her own campaign. What selfishness! How about a little sacrifice?

And we also get this:
A number of Democrats have called for windfall profits taxes on the industry. Other senators, including Majority Leader Bill Frist, R- Tenn., have said it may be time to enact a federal law on price gouging.

If Frist runs for president in 2008, I will do everything in my power to make sure this man is defeated. If he runs against Hillary, I will be seriously tempted to vote for her. This is such a grandstanding, self-righteous, populist move, it is sickening. It represents everything that is wrong with modern democracy.

What he so derisively calls "price gouging" is actually price-rationing of goods in a time of crisis. Oil prices rose tremendously after Hurricane Katrina in the areas hit, and this is a good thing. If that hadn't rose, gas would quickly run out, and the station wouldn't be able to purchase a new supply. But, since prices rose, only those people that really needed gas--that valued it enough to pay the high prices--would buy it. Other people would voluntarily stop using gas for frivolous purposes, and conserve.

This is how price-rationing works, and it is IMMENSELY preferable to government rationing. When the government enforces rationing by disregarding the price mechanism, people don't conserve as much, because prices are kept artificially low. Those people that need the gas the most (such as for their livelihood), and that would be willing to pay higher prices under market prices, have just as much ability to get gas under a rationing scheme as those people that just want to fill up their car so they can cruise main street.

Oh, by the way, here's Frists personal financial information. I think the Senate should look into this.

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