I keep waiting for a realistic plan from the politicians to get the
price of gas lower. So far all I have seen is a plan from Obama and the Dems
to tax the oil companies. Somehow this is supposed to make them lower
prices. I guess there's something about economics I don't understand.
Obama's understanding of economics is nil.
First of all, the oil companies may be making record profits, but their profit margins are staying the same. That means they're making their profits in volume. Asia and the Middle East are ordering and using more oil than ever before. Since oil is a global commodity, the price goes up, even though domestic oil consumption has gone down.
Many people are, sadly, economic illiterates. They don't understand that corporations and business do NOT pay taxes...they collect them. Consumers, shareholders, employees, and investors pay the taxes. If a business has money that must be used to pay taxes, that is less money than would have otherwise been used to expand production, compensate employees (new hires and raises for existing hires), pay dividends to retirees and other investors, etc. The final price of every product we buy has an embedded tax (estimated 22%) that the businesses collect, not pay. When you buy a $1 loaf of bread, $0.22 is the "corporate income tax" part. Did the corporation pay that tax? Nope. The buyer of bread did. Increase the "corporate income tax", and you increase the price of bread.
In other words, adding a "profits tax" on the oil companies means less oil exploration, less supply, and of course, higher pump prices. That'll teach those evil oil companies a lesson: how dare they sell us gasoline! Brilliant way to address the gas price situation, Senator Empty Suit.
There is a short-term and a long-term solution.
Short-term: remove speculators from the equation. Since speculators are responsible for the irrational and detached (from supply and demand, as well as from reality) prices we see today, they should be stopped cold in their sorry tracks. I love capitalism, but what they're doing isn't capitalism. Capitalism is based on supply and demand, and these vermin are engaged in a shell game. When Goldman Sachs says last week that they "forecast" oil to hit $150 a barrel by July 4th, all while they're putting their clients into the oil futures market, it's no coincidence that oil shoots up and enriches their clients. They lie about supply and demand in order to influence the market. In most civilized societies, we call that "fraud" and dole out jail sentences for it.
Close the Enron Loophole, and oil drops about $25 - $35 a barrel overnight.
Long-term: ignore the treehuggers and go get our own oil. Global "warming" is an anti-capitalist junk science scam designed to cripple the American economy, and it should be ignored. Drill here, drill now.
Also, we need to build more nuclear power plants and use nuclear energy to run our power grids instead of coal and oil.
Finally, we do need more alternative energy sources. Not just nuclear energy for our cars, but solar power, wind power, and battery power (for cars). We've been talking about that since the 1970's, but for some reason, the treehuggers keep saying it like it will happen overnight. We need it, but how about we develop those alternative sources WHILE we're getting more oil from our own property!
Sorry...rant over.