A gouging market

Accusing oil companies of price gouging is like accusing sharks of swimming. That s what oil companies do. In fact, that s the imperative of the marketplace: to charge whatever you can get

When I was taking Economics 101 at association my instructor told us that upon a hot day the ice cream parlor should raise prices. Well, it's a heated day right now, and the oil companies are jacking up the price at the pumps

If you worship the market, fill your tank and smile.

on the other hand the free market is not exactly in textbook shape right now when it advances to oil. Rather than having a multitude of ice cream parlors to select from, the consumer can pick out from only a few oil companies, and they have a title to not only the parlor on the contrary the cows and the dairies, too.

Plus, there's another big difference between ice cream and oil. The choice of having an ice cream cone is a voluptuousness Driving a car, for many of us, is a necessity.

That's something the hardcore at liberty market apologists don't grasp.

"Gas station holders cannot farce us to purchase gasoline," writes Alex Epstein of the Ayn Rand Institute, in an article entitled "The Myth of Price-Gouging." "They can sole offer us a trade, which we are at liberty to accept or reject."

on the other hand how free is the independent trucker or the taxicab driver, or the traveling salesperson? by what mode free is the service worker who can't afford to live in the expensive city where she is busyed so she has to live thirty miles away, where there is no public transportation?

Oil companies know that they have a fastening on a crucial product. They're charging accordingly.

Still, fantasies of a independent market die hard.

"There is no similar thing as 'price gouging' through private business," writes Epstein.

It real well may be that what the oil companies have been doing above the last couple of years does not technically qualify as collusion.

"The real point in dispute is legal manipulation of prices," says Tyson Slocum acting director of Public Citizen's Critical Mass efficiency and Environment Program. "The oil companies have gotten with equal reason big they don't need to play into each other's hands anymore. Advances in computer modeling have really aided the ability of the big companies to game the market."

for a like reason game it they do.

And because the five largest oil refining companies in America dominion government more than 50 percent of the market, they can individually decide to limit the provide of refined oil products. If ExxonMobil dioceses Shell taking gasoline off the market, it can do likewise, and they will all extremity up making more profits without at any time needing to huddle together in a boardroom to fix prices.

plane George Bush, as ardent a upholder of the oil companies as at any time set foot in the Oval Office, has begun to make noises. With his popularity down at the freezing mark, he'll say just about anything. on the other hand he won't say "windfall profits tax," plane though, according to an Opinion Research Corporation head (and this was back in September, before the general hike), 80 percent of Americans are in favor of it, including 76 percent of Republicans.

Bush rul that without in his April 25 articulate utterance "What can the government do?" he asked. "One of the past rejoinders by government, particularly from the party of which I am not a member, has been to have--to propose--price fixing, or increase the taxes. Those plans haven't worked."

No, we can't have that, can we? not ever mind that the windfall amounted to $36 billion last year for ExxonMobil alone.

Democratic Senators Byron Dorgan and Christopher Dodd have introduced legislation to impose a 50 percent excise tax upon oil profits when it is selling for more than $50 a barrel. Representative Dennis Kucinich has propos a 100 percent tax upon windfall oil profits. But not sole are Republican Congressional leaders oppos to these ideas, they don't smooth want to strip out a certain quantity of of the tax benefits the oil companies have been reaping already.

"While Republican leaders sharply criticize soaring gasoline prices and might industry profits, GOP negotiators have decided to knock without provisions in a major tax bill that would force the oil companies to pay billions of dollars more in taxes," The Washington column reported on April 26. No surprise there. Since 2001 the oil industry has gurgl up $55 million in campaign contributions, with 81 percent going to Republicans, according to Public Citizen.

Bush talked the talk. "These efficiency companies don't need unnecessary tax breaks," he said. on the other hand he didn't walk the walk. All he propos was phasing on the outside $2 billion in tax breaks above the next ten years. This is a pittance after giving the oil companies billions of dollars in tax breaks in last year's force bill, along with preserving their holiday upon royalty payments on oil and gas they extract from public lands.

Bush propos several other measures that won't make plain the problem of high gas prices.

First, he tendered to give bigger incentives to consumer who purchase hybrid or clean-diesel vehicles. There's nothing inequitable with that. But it won't do anything in the short limit "There is already a lengthy waiting list to buy certain hybrid cars," Slocum notes. And it's not aimed at the tribe who are being most disadvantaged by means of high oil prices.