Obviously, capping gas prices would not be fair. Businesses have to have the right to follow supply and demand.

HOWEVER, price gouging is illegal! With oil companies having record profits, something has to be done.

Could a law capping oil PROFITS work?

What if oil companies weren't allowed to mark up the price more than a specific amount from what they bought it for?

I am not trying to be insulting here but do you have any idea of how markets work?

Who determines the price of a barrel of oil?
Who determines the cost of refining a gallon of gas?
Who determines the price of a gallon of gas at the pump?
Who determines the costs associated with distribution, marketing and other operational costs for oil and gasoline?

How much profit did any of the oil companies make in any quarter last year? In the first quarter of this year?
Who determines what an "acceptable level of profit" is for a corporation in America?
Who determines what a "fair" price is for a gallon of gas? And fair to whom?

You do realize that you cannot legislate prices, don't you?
You do realize that if you legislatively cap prices and profits oil companies will stop buying and refining oil and stop selling gasoline, right?

The Oil Industry has not been free market for decades. They cannot drill. They cannot build refineries. The oil companies are making between 8 and 9 cents a gallon. That is less than your bank makes.

Who is the enemy here? The enemy is a conglomerate of the Global Socialists, the Global Warming environmental wackos and our very own Congress.

If you want to cap profits, the profits being made by our Government on oil should be capped. The Government's profits are more like 6 times that of what the oil companies make. It's more than a little hypocritical that the Democrats blame the oil companies. If we announced immediately that we are going to begin harvesting what is rightfully our's, the oil on US property, to boost quantity on the US market while at the same time setting the free market loose to develop alternative fuels, OPEC would drop their prices. However, they know the Democrats are stopping drilling and new refineries and therefore are not increasing production so the price will go down. We are headed for Jimmy Carter's gas lines and it will be the Democrats' fault because they are in lock-step with the Environmental crazies and George Soros' Open Society Gobal Socialist world ideology. Plus, they want to kill the economy prior to the election and blame it on Bush so that their marxist will get elected.

Maybe we should put an individual, personal tax on every lawmaker for every tax hike they legislate commensurate with the tax % they legislate. Yes, let's tax the taxers! Perhaps then they wouldn't be so free wheeling with our money.

Capping profits is absurd; but more importantly, it is COMMUNISM.

This entire issue is a Red Herring being used by liberal politicians hoping to score points with those Americans who have zero knowledge of economics, free markets, communism, the causes of higher gas prices, the nature of business, or anything related to the above; and who therefore buy the MSMs vilification of "Big Oil".

Those in Congress demanding "answers" from the oil companies are either disingenuously hoping to gain further political influence among an American populace which still believes the idiocy peddled by the MSM; OR they are totally ignorant of how business, markets, and the U.S. economy works. I don't know which is more frightening; that so many Americans are so easily duped, or that those "brilliant elites" that the people continue to elect are so hopelessly incompetent that they can't even grasp simple economic reality.

Of course, had we actually gone to "War FOR Oil" in Iraq, we wouldn't be having these problems.

If Congress continues to act as it has, there will inevitably be real "Wars for Oil" -- several of them.

It's not communism. I'm as "limited government" as the next guy, but the role of the Federal Government is to step in when capitalism doesn't work. The oil companies are breaking the law by price gouging. That is when capitalism doesn't work. There is no competition.

I don't know where you are getting that oil companies are suffering, since they have been making record profits the last couple of years, and just sent their retiring CEO a $400 million dollar "going away gift" (Exxon/Mobile). Remember when their financial records went public a year or so ago?

I agree that price capping is wrong. But the government has to step in and stop price gouging especially when it ruins the foundation on which our society runs! It's going to kill our economy! But how do you stop it? The only way to stop it is to decide what is acceptable profit. Who does that? Someone has to! Look at what % of markup they have used in the past, back when they were competitive. Use that as a guide.

Look, if they really aren't price gouging, then it wouldn't affect them at all, would it? If they aren't marking up way more than they used to, then it wouldn't hurt them one bit, right? But if they are, (as their financial records show), then this will keep them from just trying to take advantage of the American people.

hoodleehoo wrote:It's not communism. I'm as "limited government" as the next guy, but the role of the Federal Government is to step in when capitalism doesn't work. The oil companies are breaking the law by price gouging. That is when capitalism doesn't work. There is no competition.

I don't know where you are getting that oil companies are suffering, since they have been making record profits the last couple of years, and just sent their retiring CEO a $400 million dollar "going away gift" (Exxon/Mobile). Remember when their financial records went public a year or so ago?

I agree that price capping is wrong. But the government has to step in and stop price gouging especially when it ruins the foundation on which our society runs! It's going to kill our economy! But how do you stop it? The only way to stop it is to decide what is acceptable profit. Who does that? Someone has to! Look at what % of markup they have used in the past, back when they were competitive. Use that as a guide.

Look, if they really aren't price gouging, then it wouldn't affect them at all, would it? If they aren't marking up way more than they used to, then it wouldn't hurt them one bit, right? But if they are, (as their financial records show), then this will keep them from just trying to take advantage of the American people.

Uh..no.  Congress has had the CEOs of the oil companies testifying ad nosium.  They have found NO price gouging.  If they had, they'd be screaming about it.

Here's the problem..Congress!

It is as usual.  Congress caused the problem, Congress is continuing to create an even deeper problem and Congress claims they will fix the problem.   Will they?  No.   They take no blame.  They throw the blame on oil companies.

Do you know that if you took inflation and went forward from the sixties, the price of gas using today's inflation index would be around $3.76/gallon.  A loaf of bread when I was a girl was 12 cents.  Today it is between $2 and $3.  How much inflation is that???  A McDonald's hamburger was 18 cents.  It is now over $3.  What's that inflation?

Congress is keeping the free market from being free regarding oil.  They cannot drill.  They cannot build new refineries.

All those profits you write about..40% of the oil stock is owned by teachers' unions.  Yes, regular citizens in the U.S. own oil stock and are profiting.  

The oil companies do not need to have their profits capped nor taxed more.  They need to be set free to put what is rightfully our's in our gas tanks at a much lower cost.  

Again..Congress is causing this problem.  The Democrat Congress in bed with the environmental wackos and unions.

hoodleehoo wrote:It's not communism. I'm as "limited government" as the next guy, but the role of the Federal Government is to step in when capitalism doesn't work. The oil companies are breaking the law by price gouging. That is when capitalism doesn't work. There is no competition.

You cannot be a "limited government" kind of guy and really mean this.  The market and capitalism is not broken.  Government regulation has prevented the development of domestic energy resources and thus limited supply and thus contributed to lower supplies of oil as demand increases.  The market is doing exactly what it should do when demand increases and supply is limited.  You have got to understand this.  

hoodleehoo wrote:I don't know where you are getting that oil companies are suffering, since they have been making record profits the last couple of years, and just sent their retiring CEO a $400 million dollar "going away gift" (Exxon/Mobile). Remember when their financial records went public a year or so ago?

No one here has said the oil companies are suffering.  Read the posts again.  Someone pointed out that the markets are not free since the government has prohibited all new drilling and development of domestic supplies for years.  If the oil companies were free to harvest domestic energy sources they might actually make more money but their profit per dollar of expense might be less than it is now.  Would that bother you?  

hoodleehoo wrote:I agree that price capping is wrong. But the government has to step in and stop price gouging especially when it ruins the foundation on which our society runs! It's going to kill our economy! But how do you stop it? The only way to stop it is to decide what is acceptable profit. Who does that? Someone has to! Look at what % of markup they have used in the past, back when they were competitive. Use that as a guide.

Look, if they really aren't price gouging, then it wouldn't affect them at all, would it? If they aren't marking up way more than they used to, then it wouldn't hurt them one bit, right? But if they are, (as their financial records show), then this will keep them from just trying to take advantage of the American people.

First, define "price gouging?"  That is a political term and not an economic one.  You clearly have no understanding of markets.  If you cap a price of a product or service the supply of that product or service will cease once the cost of the product or service approaches the capped price.  You think things are tough now?  Wait until you can't buy oil for any price.  Think this through and you will conclude that price controls, tried by Nixon in the 70's, don't work.

When you look at this circumstance, or most any other in a business perspective, there is one maxim to keep in mind:

In a capitalist system, more government regulation of a market inflates prices. Period.

Despite good intentions, every instance of intervention we've seen in markets leads to an increase in prices. This is mainly due to the inefficiencies and ulterior motives behind the people in said bureaucracies, and their mistaken belief that they know more about the business than the people who run it. In fact, when government entities try and push markets one way, they almost always find ways around the prodding to get back to where they want to be, despite increased regulation. Profit margins are only operable to a point, and eventually costs have to be passed to the end users- that'd be every person I know over the age of 16. (Sorry no on uses public transport around here, and even so, the costs of congressional meddling are still felt in fares)

Just to cite a few specific examples here in our own country, look at the healthcare industry. Thanks to government subsidization, prices are sky high. While this may be partly due to a (poor) cultural shift in the way we view healthcare as a society, all efforts to slow this assault, with more regulation and bigger bureaucracy, of course, have only worsened the situation.

Shifting the trend away from company pensions to state-managed social insurance has lead to funds be diverted away from the people who pay for them towards other government programs. Gotta have room for all that pork in the annual budget, don't ya know? That whole system is so misguided that it requires today's workforce to pay for yesterday's- all in the name of egalitarianism. So what happens when we see a huge population shift? The money dries up, and the so-called "insurance" doesn't do much to assure people.

Let's not forget food and drug regulation. While government entities are sometimes helpful here in keeping us safe from poor imported standards (wouldn't want people to get sick just so we have the signal to stop buying x product from x foreign business), you could hardly call such entities efficient, especially when nation-wide standards are enforced.

And the recent biggie: subsidizing the bail-out of people who took mortgages they should have known not to. Because of upcoming intervention, we're going to see some massive damage in the financial markets- far more than the bursting of the bubble housing itself had caused- and have to pay higher taxes to indulge the gambling habits of others.

We could go back through this entire last century and find scores of major legislation where incompetency damages our economy thanks to government entities that try to regulate market forces. Just to underscore the oil issue, it is precisely BECAUSE of regulation that were are in our current situation with prices. Ulterior motives lead to bad legislation and regulation producing consequences that government-knows-best representatives were too naïve, foolish, or delusional to foresee.

The answer to our problems is not to regulate, but to lift regulation. Yes, we'll have to deal with higher prices for a while- maybe a year or so, but prices will slide back down. In fact, once our oil companies have a generous supply, they can vastly undercut those that are driving up prices, and flood the global market, lowering prices everywhere.

Poor decisions make for regrettable consequences. Don't delude yourself into thinking that any form of government has a magic wand that can wave away said consequences, especially when it comes to financial issues. Someone has to a pay. Always. Unless you like Carter's ideas of beating back American exceptionalism, take to doses of reality and see us tomorrow.

Congress does not care about the gas crunch. This is classic liberalism---class warfare. The evil, greedy, rich oil executives are getting richer on the sweat of working folks. It is a cheap ploy to get votes in November, and nothing more.

If oil profits are unfair and should be capped, where does profit capping stop? Where do you draw the arbitrary line to say this is too much? What you are really advocating is a quota system. The Soviet Union employed state mandated industrial quotas. Can you say dismal failure.

Take your argument one step further. Capping oil profits will by extension cap the wages of oil company employees and those of service companies that work with the oil companies. And, the service companies that service the service companies. You seeing a pattern here? Before you know it, your noble regulation of corporate profit becomes an income cap for John Q. Public.

Dress it up and paint it any color you want, socialism is still socialism. And it is a very short step from socialism to communism.

Just Say No to the koolaid.

Wow! We have a lot of smart people hanging around here!