Wednesday, April 19, 2006

Oil, economics, and politics

Like every one of you, I hate paying through the nose for gas right now. I hate seeing that gas prices aren't coming down any time soon, either. However, something I hate even more is the pandering that politicians engage in, for the purposes of scoring some points with the electorate. Senator Byron "Helmet-head" Dorgan of North Dakota is next to shamefully exploit the nation's frustration. From the AP:
Amid record oil prices and soaring gasoline costs, Exxon Mobil's $400 million retirement package to its former CEO is a "shameful display of greed" that should be reviewed by Congress and investigated by federal regulators, Democratic Sen. Byron Dorgan said on Tuesday.

Dorgan said he wants Exxon Mobil officials to appear at a Senate Commerce Committee hearing to explain how the corporation "justifies" giving its former boss, Lee Raymond, such a huge retirement package.
Let's get something straight here, Dorgan: it is not the role of the Imperial Federal Government to ask a private (i.e. not state-owned) business to "justify" any of its compensation, profits, etc. Where in the hell do you get off trying to browbeat a business into "justifying" its business model for your curiosity?

As if that degree of arrogance weren't enough:
Dorgan said he will push to win passage of his legislation that would impose a windfall profits tax on big oil companies and rebate that money to consumers, unless the companies used their earnings to explore for and produce more energy.
"Windfall" profits tax? Who gets to decide what "windfall" profits are? The market? Nope...the Imperial Federal Government! Holy Shizit, is this still America? The government gets to decide how much profit is "too much" for its liking?

You do realize that such a tax would result in even higher gas prices, since corporations don't pay taxes...shareholders, customers, employees, etc., would bear the burden of such a tax. Gas supplies would drop considerably, which would cause pump prices to skyrocket. You do realize that, right?

Also, what is this nonsense about making gas companies "invest those windfall profits in things that will increase our own domestic energy supplies"? You've got some damned nerve,, Dorgan! I mean, you and your party thwart every single effort to do that very thing: be it drilling in ANWR (a desolate area which was set aside for the express purpose of oil exploration), the Gulf of Mexico, etc. "Go get more oil and gas! Just don't get it from here, or here, or here, or..."

Senator, Dorgan...understands basic supply and demand just fine. However, his insatiable thirst for political gain will trump his common sense in economics any day of the week. The quickest way to drop gas prices is to simply buy less gas...period. Oil companies would be derelict in their fiduciary responsibilities if they didn't charge as much for gas as the market would bear. When demand subsides (and at some point, it will), gas prices will level off again. Last year, we got up to about $3.09 per gallon here...only to see it drop to around $2.19 by Christmas.

I despise the high gas prices, too, but I'm not about to advocate heavy-handed anti-capitalistic leftist tactics to bring down prices (which would do no such thing, anyway). You wanna punish the gas companies AND bring down prices? Don't buy as much gas.