The Man’s Recent Comments

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  Amen Mr. Foley

  Right on.  On Gas prices posted 3 years, 6 months ago 28 Responses

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  You're all forgetting about Antitrust

  The basic assumption that everyone's overlooking (with the exception of one or two who question the "free" aspects of the oil market) is that the oil companies are an oligarchy.  This means that they get together, discuss terms like costs of refining crude oil (legal) and then, because no one in the administration has cared one way or the other about regulatory enforcement (I'm looking at you Justice Department and FTC) the old boys club feels free to discuss price (illegal).  

  This is not a free market.  There is no competition.  "Price is high because its summer and demand increases" is almost an embarassing a factoid as "Price is high because people need more gas to heat their homes in the Winter."  The fact of the matter is that so long as big brother is not watching, these kids will play nice with one another.  Thus, they are able to charge a price that far exceeds their costs (hence the record profits).  In a truly free market, these guys would be undercutting each other to the point that excessive profits would be unattainable.

  The best way to effectuate a lower price of gasoline (which many of you seem to disfavor given that lower price leads to increased demand) is to foster mistrust among the oil companies.  Under the current White House, these execs are able to meet in secret (often with the VP present) and set price with impunity.  They trust each other when there is no one to rat them out to.  No one is going to put them in jail (or prosecute for treble damages as permitted by the Sherman Act).

  We can foster mistrust by convincing one company that the others are cheating on the cartel.  We should tell Exxon that BP is selling gas on the side at a cheaper rate.  Then you tell BP that Exxon is selling on the side too.  Before you know it, these guys will start to look at each other cross-eyed again.  Until then, you can claim its a supply and demand issue till the cows come home, but those market forces only exist when the market is free.  Here, its held captive by a group that Congress doesn't even have the backbone to swear in prior to testifying/lying.

  -The Man      On Gas prices posted 3 years, 6 months ago 28 Responses