The Red and Black

Wow, that is all I have to say about this article. I sure do hope that you have not got into your major classes of economics yet, because you would have failed every one of them. Lets discuss what is wrong with this article....
1. You talk about profits for the oil companies, yes they are high, but have you ever heard of profit margin??? It measures how much out of every dollar of sales a company actually keeps in earnings. For example, a 20% profit margin, means the company has a net income of $0.20 for each dollar of sales. Now, do you know what the oil companies are? They are usually around 9-10%. That puts them bout in the middle of all the fortune 500 companies out there. But you won't hear about that in the lamestream media, it's all about "profits".
2. If you are an "economics" major, you should know that if you tax a company, the consumers are the ones that bare the cost of that. An oil company is not going to lower it's cost when you tax them, they are going to increase the cost, because why should they take a loss so the government gets more money? If you owned a business and you were taxed more, wouldn't you raise your price so you can bring in more money and still compete in the market? That is what is going to happen if you take away the tax credits. That is why more and more companies are going over seas because the U.S. is one of the only industrialized nations that still have a crazy tax code on companies. Oil companies already have to pay a great deal of taxes already, somewhere around $1.30 or something per gallon. The lesson here for all you democrats is to let the free market run it's course and have less government involvement.
3. Oil companies are not the ones that determine the price per gallon. The price is managed by the market and what the suppliers sell it at. Companies in the middle east know that supply for oil is growing at a great rate, so they raise the price to manage that, something else you'll learn in your economics classes. But the market determines the prices, more so, the future contracts for oil is determining the price. I am sure you have heard about them in the news, the price of oil raising over $140 a barrel. But did you notice that when Bush came out and said he was going to take off the ban of off-shore drilling, that the price of oil in the market dropped like $12 in one day? And what happen? The price of gas dropped something like $.40 this month. It has settled now because the future's are settling around $115-120.
4. I do agree with that the congress does need to do something about this. And that soultion for now is to off-shore drilling to buy us some more time to find a better solution. That is why you may of heard of many Republican congressman staying to debate off-shore drilling while mostly all democrats (and some Republicans) went on "vaction". What has this congress accomplished? Absoultly nothing.
I hope people will agree with me that this article is not very good and the Red and Black needs to do a better job in finding people that are actually knowledgable in the world of business.

One more thing also. The Obama's plan on taking money from oil companies and giving a $1000 credit to the middle class. There is one thing wrong with this, the money he wants to take from oil companies is not the oil companies money, they are the STOCK HOLDERS money!!! And majority of the stock holders are the middle class. They are teachers, police, firemen, etc's pension funds. Their retirement plans. So think about that too.

Wow, this guy is a complete idiot. Drill Here, Drill Now. http://www.americansolutions.com/ Nice response G.

The Drill Here movement is a wedge issue. It misses the bigger picture, which is the need to provide incentive for the development of alternative fuels. I've also never met a single economist who wholeheartedly embraces subsidies because of their habit of distorting markets...so much for this guy being an idiot.

You guys can chant your little slogan all you want, but you're only hurting yourselves.

You can always tell you've hit a nerve when the opposition comes out name calling. The energy crisis is real and it requires a new way of thinking. If big oil doesn't get on board the true consequences will be felt down the line, and it's not anywhere near as long a line as it used to be. It's easy to fall back on the idea that capitalism is the answer to all, but energy resources are finite and that is a hard truth. We either find our way to renewable resources or we invite catastrophe. Rocky Cole speaks a truth here.

The responses to this article so far have been interesting. That much anger usually indicates an agenda. The fact is that the energy crisis is real and cannot be solved in the old ways. Paul Erlich told us this in the seventies in THE POPULATION BOMB. It has come up scores of times since, and the truth has become clearer and clearer. The energy resources we now use are finite. Renewable resources are the only answer. We could have started much earlier, but didn't. At some point, it's now or never.

I hardly consider subsidizing the oil industries "letting the free market run its course." Let the tax credits go and let the market run the course, why don't we?