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Originally Posted by Garth
I heartily agree that all companies on the stock exchange have an obligation to make as much money as they can. But, Exxon Mobil is a very different company than Pepsi. If Pepsi starts charging $4 a can, people would stop drinking it. But if oil is costing $4 per gallon it will be paid.
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Your correct so far sir.
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I guess what I'm trying to say is that supply and demand doesn't work if there is a guarantee of demand. Because they know we will never be able to go without it, they can charge whatever they want and we will have to buy it. The only thing that maintains the prices were they are is competition. However there is very little to keep all of the oil companies from deciding to raise their prices together. If they did that we would simply pay it. And when I see a Shell station and a Chevron station raise their prices in exact step with each other, makes it very hard not to think that.
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Where you've gone wrong here is that you believe that gas companies set their own prices. The government has limits on what you can charge for gas at any station no matter who is selling it, so the price is artificially altered before you ever get to the pump. If the price per barrel continues to rise and refining continues to be covered in as much red tape as it is now, then prices won't ever fall and we'll just have to find some other means of producing energy for transportation.
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As for profit margins, I understand the concept. All I'm saying is that they could take a bit of a profit cut for our economy. If they are currently making 10% profits, couldn't they cut the prices by 5% and settle for only $5 Billion in total profits?
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So you want for the govt to seize privately made profits for the good of the masses? Sounds like communism to me.
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If you can't tell, I think oil should be socialized. It works for Mexico.
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If there is any country on this planet we shouldn't model ourselves after, Mexico might be it.