Wednesday, April 2, 2008

Government Shell Game (Starring Big Oil)

As the big rigs were slowing down and stopping yesterday to protest the continuously and ridiculously increasing prices of diesel fuel, oil executives were being dragged before Congress to explain why they were making money.

First, the truckers. I can think of nothing that will jack up the price of everything than the continuing punishment that both owner/operators and trucking companies have to suffer as fuel prices continue to skyrocket. With that in mind, I fully support anything they can do to get attention for what will become the problem that can cripple our country the fastest. As their costs increase, we will see it impact us. And since virtually everything is delivered by truck, even the fuel that goes into the trucks, the price of everything will go up.

So Congress, with fuel prices doubling over the past decade, has leaped into action. Have they begun to take steps to open access to all the oil in America? Have they really tried reducing our dependence on oil by getting viable alternatives online? Have they yanked the taxes slapped onto every gallon of gas we use? Have they listened to me?

Hell no! This is Congress we're talking about here.

Their solution was to drag some top oil executives before their "greatness" and have the executives "explain" why they were making money.

Now before you anti-capitalist moonbats start blasting me for defending "Big Oil", let me say this: the industry made total profits of $123 billion last year. I will let our capitalistic system decide whether that is "fair" or "reasonable" or "excessive" for them to make that. So I'm not going to defend them, or attack them, or waste my time with anybody who wants to do either.

My problem is with the imperial Congress. They first give the oil companies tax breaks while taxing us for every gallon of gas we pump. They create conditions where the supply of domestic oil is limited while global demand is up. They limit development of viable alternatives (nuclear) with light-years of red tape while advancing agendas (ozone, global warming/cooling/climate change) that increase the costs to refine, produce, and use fossil fuels. And then they take a private business, drag their executives from the business of making money, and march them, McCarthy style, into hearings where Congressmen get the chance to make stupid statements to please their various constituencies. Then they threaten those tax breaks, which can only increase the price of gas if then now take them away. Especially since we're paying for the tax breaks whether the oil companies get them or not.

In reality, this hearing bullshit does NOTHING!!! This is really just one of our government's obsessions. They play the shell game, always hiding the real answers and making sure nobody can find them. After all, if they solved our problems, what would we need them for?


Obob said...

exactly. I ignored the story on Congress to a degree because it was a cheap show on our dime. Most of the people in Congress are jealous they didn't have the business saviness to make that kind of money. So they scowl at them and demand "answers."

Timothy said...

Just allow me to say:
God Bless Big Oil!

God, please work on the dunderheads in Congress!

Good post.

Toad734 said...

What they should be doing is explainging why Oil and Gas was one of the biggest contributors to the Bush campaign and that Cheney, Rice, Bush Sr. all have ties to the oil industrie and why gas was $1.40 when Bush took office and its $3.50 now (I think that's what the Mission Accomplished sign was all about). That, and why Exxon has become the most profitable company in history at the same time their gas is crippling the American economy.

No one said that they shouldn't make money, what they are saying is why are they raping us with no vasoline. The answer is sits at 1600 Pennsylvania Ave.

Patrick M said...

You're right about the gas spike, and the GOP, including Bush, had a few years of total control to fix some of the damage that has been collecting over decades. They failed to do so.

And if "Mission Accomplished" had been about oil, we'd be sucking Iraq dry right now.

And I'm surprised at you. I figured you'd be the one to say they shouldn't make money. I may yet turn you from the Dark Side! HAHAHAHAHAHAHA!

Toad734 said...

Of course they should make money or they wouldn't do it. In 2006 they made record profits and in 2007 they made more profits than any company in history with profits, not revenues, of 39.5 billion dollars. What I am saying is that they are using the war in Iraq and the disrupted supply line of oil there to justify higher prices. Obviously it's not actually costing them as much to bring us the oil as compared to the amount they are charging us. Sure, they have to pay more for a barrel of oil but that’s again another excuse to charge us more. The higher the ticket price, the higher the margins. If they were working on 20% margins when oil was $40 per barrel and they keep the same margin at $100 per barrel, they have a vested interest for that oil to be bogged down behind a war zone for as long as possible. By influencing Washington to go to war with all their millions of dollars in political donations, they have increased their profits by 150% based on those 20% margins (20% of $40 is $8, 20% of $100 is $20 which is an increase of $12 per barrel) Now, who in the Whitehouse that makes decisions about war is from Texas and has strong ties to the oil industry and whose family members all have financial interests tied up in oil and oil contractors?

Are you starting to think that perhaps Exxon could be called a war profiteer? They certainly aren’t out there with protesters to end this war. In fact, they have a vested interest to keep it going and coincidentally over 75% of all Oil and Gas political contributions go towards Republican candidates. In 2004, 89% of Exxon’s 1 billion dollars went towards republican candidates. And you wonder why we are still in this war.

In 2005 Bush then gave 8 billion dollars in tax breaks to the Oil and Gas industry (you scratch my back I'll scratch yours). With all these savings, why have gas prices gone up?

Exxon’s CEO recently received a 4 million dollar bonus on top of the millions he already makes and Chevron Texaco’s CEO recently received a 3.5 million dollar bonus. Do you think high gas prices are putting a dent in his wallet?

If you don't think this is criminal, there is something wrong with you. Any Libertarian should be outraged by the intrusion of private business and politics and then the government serving their corporations and not their people.

Patrick M said...

Okay, I'll make this really short. You're leaving out a whole lot of factors that influence the price of oil that Big Oil has no control over. That includes the speculation market, the global oil demand, and the costs of everything that affect the transit.

The war impacts the flow of Iraqi oil, which we aren't getting in quantity.

And yes, if you missed the point of the original post, I am pissed about the incessant need of the government to intervene in the economy, including the oil price issues they seem unable to solve.

I also seemed to mention something about not trying to slam or justify the oil companies due to the relatively marginal role they have in setting prices. That was because it tends to cloud the debate by introducing classism. As usual, I was right.

Toad734 said...

Youre missing it. They can control the price of oil by getting people elected who will start wars in the middle east. I think you will find that some of the biggest proponets of this war came from oil and gas. So they don't directly influence the price of a barrel of oil but they most certainly influence it. They also directly influence the cost of gasoline as they are the ones who turn it into gasoline and thus, sell the gasoline.

Im not saying that OPEC, China and global demand or even the US driving SUVs don't have an impact on oil. I am saying that the Exxons of the world are war profiteers who are exploiting this war and crippling our economy.

Patrick M said...

Even shorter answer:

You seem to think the current problem was caused in the last 5 years.

The problem has been brewing for the past 50 years. The current climate has just brought it to a head.

But you go for the easy and shortsighted answer, primarily because it fits your ideological bent. This is the reason the discussions usually resemble Napoleonic battlefield tactics: two sides standing face to face, shooting the piss out of each other until the ammo or soldiers run out.

Toad734 said...

What problem has been brewing for 50 years? High oil prices?

Patrick M said...

Our infrastructure has been stagnant for 30 years and our dependence on oil has been increasing since WWII. Add to that expanding economies around the world, increased regulation, and a government that plays blame politics, and you get half a century of this shit.