The Tao of Politics

One of my main concerns is: how can I make a difference? There are thousands of political blogs out there. It’s easy to get lost in that ocean. So I may blog about politics on occasion, or I may blog about health issues, depending on where my interests lead me, and where I feel I can contribute something of significance.

Saturday, October 29, 2005

Big Oil, Little People

Well you see, this is one thing I don’t blame the oil companies for (read article). But while I’m not blaming the oil companies, it is the public that is really getting screwed, as usual.

But this is one thing I do blame the oil companies for. You see, even though companies like Google may have huge profit margins too, Google didn’t take their money out of my pocket. The oil companies did. Look, we’ve tried having a President in the Oval Office who is chummy with Big Oil, Big Business, etc. Don’t we want to try having a President who cares about people like you and me? Not only that, but doesn’t this article shine a light on the fallacy of supply side economics? I mean, these oil companies have so much cash they don’t know what to do with it. So, are they going to use it to build new refineries? No. Are they going to use it to create jobs for people who need jobs, like the Bush economic theory is supposed to go? I doubt it. Are we going to get rebates? I'm not holding my breath.

Yes, the country is moving in the wrong direction, and we need a change, bigtime.

10 Comments:

  • At 8:32 PM, Anonymous Anonymous said…

    Your comparison of the source of profits for Google and big oil is amusing, but incorrect. Google's profits DO come from your pocket, albeit indirectly. You pay for Google's profits through the products you buy from Google advertisers.

    How did you feel about big oil when crude was $9 a barrel and profits were scarce? Now that oil is becoming scarce, who will pay for development of new sources of energy? Big oil needs these seemingly out-sized profits to develop new sources and technologies to feed our future hunger for energy.

    Your argument stirs emotion, but has no basis in economics.

     
  • At 6:35 AM, Blogger Carl said…

    Anonymous,

    Errrr, those Google profits were budgeted for and built into the costs of the products we purchased and would have been spent on radio or TV or print ads anyway. Meaning that competition for your purchasing dollar comes into play: if a company spent too much on advertising and had to raise it's prices because of that, another company could come along and undercut their price and steal some business.

    The oil company profits were windfall oligopolic profits and sucked directly out of our pockets.

    Your analogy is fraudulent.

     
  • At 6:36 AM, Blogger Carl said…

    Ed,

    See if you can find a DVD of "The Oil Factor", and you'll see where these monies went to.

    PS It wasn't to research and development...

     
  • At 9:36 AM, Blogger Ed Bremson said…

    So let's see, Google's profits do come from my pocket, but not really? OK.

    And big oil is going to use these profits "to develop new sources and technologies to feed our future hunger for energy?" I wish that was the case. From what I read it doesn't seem to be the case, including one of the articles cited in my article.

    Anyway, let's wait and see the results of congressional investigation of price gouging.

    In the meantime, while you're trying to heat your home this winter, and the prices go higher, tell me who you blame, Google or Big Oil.

     
  • At 9:55 AM, Anonymous Anonymous said…

    Poor big oil. It needs its profits. Boo hoo hoo.

     
  • At 11:04 AM, Blogger david said…

    Just so I am clear, carl, economic laws apply to products advertised on Google, but not oil? If, as you assert, supply/demand does not affect oil, how do you explain $10 per barrel oil in 1998?

    I did suffer through The Oil Factor. I found it sensationalistic, incomplete and shortsighted. How do you suppose new energy sources will be developed? By the government? Who do you think will pay? Big oil has great incentives to transform itself into big energy.

    Yes, Ed, Google's profits come from your pocket -- no confusion here. If you doubt this fact, you probably believe the burden of corporate taxes is actually borne by corporations.

    When I pay my high heating bill, I will have a long list on whom to place blame, including, but not limited to:
    - you: for ignoring economic forces
    - environmentalists: for driving up costs and reducing supplies through regulations with questionable results
    - Congress: for failing to address the issues, choosing instead to hold sound bite-creating hearings
    - Presidents, current and past: for failing to lead the nation and Congress to make and support difficult decisions

     
  • At 11:12 AM, Blogger Carl said…

    No, David, and if you paid attention to my post rather than your own hysterics, you'd see that the money paid to Google would have been earned anyway, but the profits earned by ExxonMobil and the other oil companies these past few months ARE WINDFALL PROFITS!

    Which means they skip nearly ANY contervailing expenditure and end up as pure profit to the oil company.

    errrr, you DID study economics, correct?

    Perhaps you might consider returning your degree.

     
  • At 12:55 PM, Blogger david said…

    Hysterics, carl? Return my degrees, carl? What a great way to elevate the debate! ROFL

    I think I understand how you missed the shortsightedness of The Oil Factor. You are ignoring oil investments made over many years. What is your time horizon for investment/return correlation? Oil companies predominately use FIFO accounting. In the current environment, this increases their reported profits while reducing the impact of recent investments. As your assertions don't match your positions, I suggest that your working definition of windfall profits has nothing to do with economics. Instead, it is any profit in excess of what you consider fair, with fair defined according to the pain in your wallet.

    Regarding Google profits, your position requires constant total advertising spending over time -- not true. Additionally, applying the definition you used for oil, I could easily assert that Google profits are a windfall because they did not make significant related investments within the quarter the profits were earned. This is the SAME assertion you make about oil profits -- incorrect in both cases.

    While you are attempting to explain your way out of the windfall profits hole, you could also try to explain loss-making oil production that was forced during 1998. Were these windfall loses?

     
  • At 1:02 PM, Blogger Carl said…

    *YAWN*

    David, I'll go over this one more time...no wait. I'll make you do it.

    Go to wikipedia, and go look up "monopoly profits" and report back what you find.

    That's what Ed is objecting to.

    MmmmmmK?

     
  • At 1:46 PM, Blogger david said…

    Monopoly? Are you referring to the 54 oil companies publicly traded in the US? Or, the countless privately held domestic producers? That is not a monopoly by any reasonable definition.

    Get some coffee to help you wake up. You have several unanswered questions from my previous posts.

     

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