My gas price has dropped by more than a full dollar in the past month or so, as the Congress continues to gripe at oil company executives for "windfall" profits. Did we really elect REPUBLICANS to lead this sort of anti-capitalist inquiry?
The populistic idiocy the Congress is engaging in by decrying oil prices (even as they drop to pre-Hurricane Katrina levels) is rather disgusting; especially considering the history and relative profitability of the oil industry. Steve Chapman of the Chicago Trib explains:
. . . The critics on Capitol Hill don't seem to notice that pump prices have fallen by 92 cents a gallon since Labor Day, a 30 percent decline.
That happened mainly because of a couple of minor factors known as supply and demand. Consumers curbed their driving when prices peaked, and in recent weeks, Gulf Coast oil refineries have increased their output. Both factors helped to loosen a tight market. And the big oil companies were somehow powerless to keep prices up.
They usually are. For all we've heard about their "record" profits, it's not that lucrative a business. Over the last five years, the American Petroleum Institute points out, the oil and natural gas industry netted 5.7 cents on every dollar of sales, compared to 5.5 cents for all U.S. companies.
For every boom in the oil patch, there is a bust, which usually lasts longer than the good times did. During much of the last quarter-century, the industry has grappled with glut. Measured by its return on investment capital, report Jerry Taylor and Peter Van Doren of the Cato Institute in Washington, "the oil and gas sector has been less profitable than the rest of the U.S. economy over the past 33 years."
Maybe the President will finally start brandishing his veto pen. That would be a nice change from the fiscal idiocy he's allowed by abdicating his veto in the past 4.5 years.