The American Spectator

Reader Mail

Oil for One

5.11.06 @ 12:01AM

(Page 3 of 5)

Poor Ben is so confused he forgets what profits are made by the poor little old oil companies. Billions, that is with a capital "B." They are earning unheard of profits, it is almost embarrassing. Poor Ben.
-- Marc Espinosa

You have it right, it is we the people too lazy to walk a few feet and want big wheels.
-- unsigned

I have a great deal of respect for Mr. Stein. We might even have crossed paths in the White House when he was writing speeches and I was with WHCA. He is normally a model of common sense. That's why it's all the more sad to see him resorting to the same tired old strawman being used by conservative commentators of all stripes: that it's gas prices, not windfall profits, that have consumers up in arms.

Reasonable people understand that gas prices are driven by the cost of oil. But if it were that simple, how could (for instance) gas prices go up 25 cents in four days here in California? Why is there a headline in today's OC Register saying "Oil drops...gas prices up"? Does Mr. Stein think that it takes only four days for gas to be transported from the Middle East, refined, and trucked to a gas station? I hope not.

The fact is that oil companies make their windfall -- their unearned -- profits by raising the price of gas before the increased cost of oil or refinery operations or outages can possibly propagate through the system. To put it another way, and as Mr. Stein points out, the gas at a gas station was produced when oil prices were lower, or refinery capacity greater, or whatever the excuse de jour is, but the pump price is raised nonetheless. Then, when gas prices go down, they never quite go down to where they were before, regardless of actual costs.

Mr. Stein can choose to see this as a commodities market in action, but the rest of us see it as exploitation. Nobody wants to deny oil companies their due profits; we just want to pay for what gas really costs, not what speculators playing with the market can force it to cost.
-- Sam Samuels

Thanks, Ben, for the article on oil prices and not to blame oil companies. Lots of little people own a "little" interest in minerals. We have been raped too long by those wanting cheap fuel and not let it rise according to "inflation." Price the barrel of oil based on THE COLAS that congressmen allow themselves each year for their salaries, and oil would be, I bet, $100 a barrel.
-- Charlie Rankin
Mcallen, Texas

You make sense. Although I do not like paying high prices for gasoline, I do not like paying higher prices for other things also. Enjoy your columns.
-- Sidney J. Steingart

In his otherwise well informed and intelligent piece, "Stop the Scapegoating," Mr. Stein suggested we, "… zoom around in our big huge cars as if gasoline (was) still $1.50 a gallon."

Too bad Mr. Stein's view from Malibu didn't extend over the wall that keeps him and every American commentator in economics ignorance and separated from the reality of oil and gasoline prices.

Which reality includes that in 1981 oil was more than $90.00 per barrel in 2006 Dollars and in the same currency, (Which bears about as much relationship to the 2000 Dollar as does, say, the Iraqi Dinar to the Ugandan Shilling) in 2000, in parts of America, gas reached $5.30.

That is, in 2006, thanks to the Fed's artificially holding down interest rates and running its printing presses overtime, which machinations might reasonably, in less polite circles, be called counterfeiting, it costs three 2006 dollars to buy a January 21, 2001 $1.50.

And we Americans are gladly zooming around in our big huge cars because gasoline still is $1.50 a gallon.

And because we want to!
-- Brian

I believe your article is half right and half wrong. Granted, the ones with the gas guzzlers and a car for every individual in the family are victims of their own habits. Most certainly, not enough has been done by this country to take advantage of other power resources: i.e., solar, atomic, and wind.

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Taxes, Education, Economics, Business, Federal Budget, Social Security, Environment, Constitution, Law, Supreme Court, Military, Iraq, Energy, Oil