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Donger
08-01-2008, 10:02 AM
http://www.politico.com/news/stories/0808/12237.html

Sen. Barack Obama (D-Ill.) on Friday announced an “Emergency Economic Plan” that would give families a stimulus check of $1,000 each, funded in part by what his presidential campaign calls “windfall profits from Big Oil.”

Details are in this six-page policy paper.

The first part of Obama’s plan is an emergency energy rebate ($500 to individual workers, $1,000 to families) as soon as this fall.

“This rebate will be enough to offset the increased cost of gas for a working family over the next four months,” Obama said. “Or, if you live in a state where it gets very cold in the winter, it will be enough to cover the entire increase in your heating bills. Or you could use the rebate for any of your other bills or even to pay down debt

Separately, Obama’s plan includes a $50 billion stimulus package that his campaign claims would save more than 1 million jobs.

Half of the money would go to state governments, which are facing big budget shortfalls, and half would be used for national infrastructure, including replenishing the Highway Trust Fund, rebuilding roads and bridges, and repairing schools.

Obama announced his plan 27 minutes after a Labor Department report showed unemployment hit a four-year high of 5.7 percent in July — the highest rate since March 2004, when it was 5.8 percent.

“We need to do more,” Obama said in a statement. “That’s why today I’m announcing a two-part emergency plan to help struggling families make ends meet and get our economy back on track.

McCain reacted to the surprisingly dour jobs report with a two-paragraph statement: "Across this country, Americans are hurting and today's job numbers are just the latest reminder of the economic challenges we face. ... Unlike Sen. Obama, I do not believe that raising taxes is the answer to our economic problems. There is no surer way to force jobs overseas than to raise taxes on businesses.”

Obama announced his plan for a windfall profits tax on oil companies on June 9 in Raleigh, N.C., as he launched a two-week economic tour after clinching the Democratic nomination.

Friday’s proposal says Obama “is proposing to offset the cost of his emergency energy rebates over the next five years by enacting a windfall profits tax on big oil companies.”

“Obama simply asks that big oil companies contribute a reasonable share of the windfall profits they receive from high oil prices over the next five years to pay for emergency assistance for families right now,” the campaign says.

BucEyedPea
08-01-2008, 10:04 AM
LOL! This is the BIG change from Bush? Another stimulus check.
He doesn't understand economics based on how it's to be funded.
But then Mac isn't strong on economics either.

Chief Faithful
08-01-2008, 10:07 AM
If most Americans were not economically illiterate he could not begin to get away with proposals like this. :banghead: This is not even stealing from the rich this is stealing from the middle class to give to the middle class inorder to buy votes. :cuss:

Nightfyre
08-01-2008, 10:11 AM
I like how he more or less made up these windfall profits.

***SPRAYER
08-01-2008, 10:14 AM
If most Americans were not economically illiterate he could not begin to get away with proposals like this. :banghead: This is not even stealing from the rich this is stealing from the middle class to give to the middle class inorder to buy votes. :cuss:


You mean it isn't free money?

:drool:

Donger
08-01-2008, 10:17 AM
Personally, I would like to know how Barack Hussein defines "windfall profit." Is it a certain amount of total profit per quarter? I certain profit margin?

chiefforlife
08-01-2008, 10:18 AM
I didnt like the first "stimulus check" idea, and I dont like this one either. Taxing the oil companies will only insure that the "stimulus checks" go right back into the even higher price of oil.

***SPRAYER
08-01-2008, 10:18 AM
Personally, I would like to know how Barack Hussein defines "windfall profit." Is it a certain amount of total profit per quarter? I certain profit margin?

Are you trying to suggest Obama invented an arbitrary term "windfall profit"?

:hmmm:

Donger
08-01-2008, 10:22 AM
Are you trying to suggest Obama invented an arbitrary term "windfall profit"?

:hmmm:

Not at all. I believe that it goes back to Carter.

I would just like to know how Barack Hussein defines it. I would imagine all businesses would like to know as well.

***SPRAYER
08-01-2008, 10:36 AM
I would just like to know how Barack Hussein defines it.

At his convenience.

;)

'Hamas' Jenkins
08-01-2008, 10:44 AM
I know policy really doesn't have a place here, but what the hell:

Obama's Proposal

Among the options Illinois Senator Obama is mulling is imposing a 20 percent tax on the cost of a barrel of oil above $80, said Grumet, who spoke at a conference in Washington today.

``The industry has profited greatly -- over $150 billion in 2007 -- due to global instability fueled by conflict in Iraq, failing domestic fiscal policies that have weakened the U.S. dollar and skyrocketing global demand resulting from a lack of investment in alternatives,'' said the Obama fact sheet.

Energy companies argue that new taxes will discourage production at a time when supply is needed most.
Oil companies got about $12 billion in tax breaks last year, Grumet said, and the windfall tax would aim to roll back all of those subsidies.

The top five oil companies, San Ramon, California-based Chevron Corp.; Houston-based ConocoPhillips; Irving, Texas-based Exxon Mobil Corp.; BP Plc in London; and the Hague-based Royal Dutch Shell Plc. reported $123 billion in profits for last year.

Exxon Mobil said first-quarter net income rose to $10.9 billion, or $2.03 a share, from $9.28 billion, or $1.62, a year earlier. The profits report fell short of analyst estimates as production dropped and profit margins from refining narrowed.

banyon
08-01-2008, 10:45 AM
If most Americans were not economically illiterate he could not begin to get away with proposals like this. :banghead: This is not even stealing from the rich this is stealing from the middle class to give to the middle class inorder to buy votes. :cuss:

WTF, how is it "stealing from the middle class"?

***SPRAYER
08-01-2008, 10:45 AM
Let's all dress up in suits and pretend we're running for president!

Donger
08-01-2008, 10:47 AM
I know policy really doesn't have a place here, but what the hell:

Obama's Proposal

Among the options Illinois Senator Obama is mulling is imposing a 20 percent tax on the cost of a barrel of oil above $80, said Grumet, who spoke at a conference in Washington today.

``The industry has profited greatly -- over $150 billion in 2007 -- due to global instability fueled by conflict in Iraq, failing domestic fiscal policies that have weakened the U.S. dollar and skyrocketing global demand resulting from a lack of investment in alternatives,'' said the Obama fact sheet.

Energy companies argue that new taxes will discourage production at a time when supply is needed most.
Oil companies got about $12 billion in tax breaks last year, Grumet said, and the windfall tax would aim to roll back all of those subsidies.

The top five oil companies, San Ramon, California-based Chevron Corp.; Houston-based ConocoPhillips; Irving, Texas-based Exxon Mobil Corp.; BP Plc in London; and the Hague-based Royal Dutch Shell Plc. reported $123 billion in profits for last year.

Exxon Mobil said first-quarter net income rose to $10.9 billion, or $2.03 a share, from $9.28 billion, or $1.62, a year earlier. The profits report fell short of analyst estimates as production dropped and profit margins from refining narrowed.

That doesn't answer my question at all.

banyon
08-01-2008, 10:50 AM
That doesn't answer my question at all.


`(c) Reasonably Inflated Average Profit- For purposes of this chapter, with respect to any applicable taxpayer, the reasonably inflated average profit for any taxable year is an amount equal to the average of the adjusted taxable income of such taxpayer for taxable years beginning during the 2002-2006 taxable year period (determined without regard to the taxable year with the highest adjusted taxable income in such period) plus 10 percent of such average.


http://thomas.loc.gov/cgi-bin/query/F?c110:1:./temp/~c110jgzGEM:e16619:

***SPRAYER
08-01-2008, 10:51 AM
That doesn't answer my question at all.



That seems to be O-Bot standard operating procedure---

Make a condescending remark and post a link or a cut and paste from B.O.'s website. And the link never has anything to do with what was/is being discussed. I guess their strategy behind it is they assume you aren't going to check it out.

Donger
08-01-2008, 10:54 AM
`(c) Reasonably Inflated Average Profit- For purposes of this chapter, with respect to any applicable taxpayer, the reasonably inflated average profit for any taxable year is an amount equal to the average of the adjusted taxable income of such taxpayer for taxable years beginning during the 2002-2006 taxable year period (determined without regard to the taxable year with the highest adjusted taxable income in such period) plus 10 percent of such average.


http://thomas.loc.gov/cgi-bin/query/F?c110:1:./temp/~c110jgzGEM:e16619:

That's how Barack Hussein defines it?

banyon
08-01-2008, 10:57 AM
That's how Barack Hussein defines it?

That was the bill the Republicans filibustered. Monies would've gone into alternative energies or if the companies just invested themselves, then they would've gotten a credit that offset the tax, but that was too unbearable for Ted Stevens and co.

Donger
08-01-2008, 11:00 AM
That was the bill the Republicans filibustered. Monies would've gone into alternative energies or if the companies just invested themselves, then they would've gotten a credit that offset the tax, but that was too unbearable for Ted Stevens and co.

What bill was that?

Here's a summary of the taxation that Exxon paid recently:

In 2007, Exxon disclosed income taxes of $30 billion on revenue of $390 billion and net income of $40.6 billion, a new record.

Including income, sales-based and all other taxes, Exxon paid $105.7 billion in 2007 taxes, or about 44% of its revenue. Averaged out during 2003-07, the company calculated that it paid about $13 billion a year in U.S. taxes.

BucEyedPea
08-01-2008, 11:01 AM
That's how Barack Hussein defines it?

That was from the Library of Congress where our central planning socialists define what a reasonable and unreasonable profit is. Lol!

Donger
08-01-2008, 11:04 AM
Heh. I suppose Barack Hussein will go after Big Corn next? Big Steel?

Billionaire investor and Barack Obama supporter Warren Buffett on June 25 turned on the Democratic presidential candidate over a proposed windfall profits tax on oil companies. Buffett also criticized Obama’s decision to reject public financing for his campaign.

“I think it is very hard to have windfall taxes,” Buffett told CNBC’s Becky Quick on “Power Lunch” from New York City.. “Steel has doubled in price. Is that a windfall for the steel producers? Sure. Corn is $7 a bushel; soybeans are at $15 a bushel. I don’t think any candidate in his right mind with the number of electoral votes in farm states would say you ought to tax farms specially because they are getting a windfall.”



Obama, whom Buffett has publicly supported, said June 9 he would impose a windfall profits tax on oil companies.



“I’ll make oil companies like Exxon pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs and other bills,” Obama said, according to Reuters.



“But they [farms] are getting a windfall from commodity prices,” Buffett said. “Maybe they deserve it because commodities have been under priced, but to pick out one commodity – with copper at $3.60 a pound, you could say that the copper producers are getting a windfall. The networks are getting a windfall because of the Olympics. So, I don’t think that picking anybody that’s had a commodity that’s increased in price a lot and saying that there’s a special tax because of that makes any sense.

banyon
08-01-2008, 11:05 AM
That was from the Library of Congress where our central planning socialists define what a reasonable and unreasonable profit is. Lol!

This is looney even for you. :(

Donger
08-01-2008, 11:07 AM
This is looney even for you. :(

What's loony about it? Isn't Barack Hussein saying that a certain amount of profit (or profit margin, or something) is unacceptable?

Taco John
08-01-2008, 11:12 AM
Give me more of my money back. I'll take it.

This beats the hell out of a gas tax holiday.

Taco John
08-01-2008, 11:13 AM
This is looney even for you. :(


I totally disagree. Her statement is pretty much 100% accurate.

banyon
08-01-2008, 11:15 AM
What bill was that?

Here's a summary of the taxation that Exxon paid recently:

In 2007, Exxon disclosed income taxes of $30 billion on revenue of $390 billion and net income of $40.6 billion, a new record.

Including income, sales-based and all other taxes, Exxon paid $105.7 billion in 2007 taxes, or about 44% of its revenue. Averaged out during 2003-07, the company calculated that it paid about $13 billion a year in U.S. taxes.

It was the Consumer-First Energy Act of 2008 (S.3044).

Am I supposed to shed a crocodile tear about their taxation? After taxes they still broke their own record for profits in a year.

banyon
08-01-2008, 11:16 AM
What's loony about it? Isn't Barack Hussein saying that a certain amount of profit (or profit margin, or something) is unacceptable?

The loony part is describing the Library of Congress as some sort of collectivist central planning facility.

Donger
08-01-2008, 11:20 AM
It was the Consumer-First Energy Act of 2008 (S.3044).

Thanks. I presume Barack Hussein supported said bill?

Am I supposed to shed a crocodile tear about their taxation? After taxes they still broke their own record for profits in a year.

Whether you cry or not isn't my concern. I was just pointing out that they do indeed pay substantial taxes already. But, I suppose it isn't enough?

banyon
08-01-2008, 11:21 AM
Thanks. I presume Barack Hussein supported said bill?



Whether you cry or not isn't my concern. I was just pointing out that they do indeed pay substantial taxes already. But, I suppose it isn't enough?

Not if they're just passing the taxation costs along to the consumers.

Donger
08-01-2008, 11:25 AM
Thanks. I presume Barack Hussein supported said bill?

Interesting:

Sen. Barack Obama [D, IL] Abstain

Donger
08-01-2008, 11:25 AM
Not if they're just passing the taxation costs along to the consumers.

I see. They should just eat the cost?

Donger
08-01-2008, 11:29 AM
Okay, here's how that bill defined windfall profit. Can someone explain it to me in layman's terms please?

SEC. 5897. WINDFALL PROFIT; QUALIFIED INVESTMENT.

`(a) General Rule- For purposes of this chapter, the term `windfall profit' means the excess of the adjusted taxable income of the applicable taxpayer for the taxable year over the reasonably inflated average profit for such taxable year.

`(b) Adjusted Taxable Income- For purposes of this chapter, with respect to any applicable taxpayer, the adjusted taxable income for any taxable year is equal to the taxable income for such taxable year (within the meaning of section 63 and determined without regard to this subsection)--

`(1) increased by any interest expense deduction, charitable contribution deduction, and any net operating loss deduction carried forward from any prior taxable year, and

`(2) reduced by any interest income, dividend income, and net operating losses to the extent such losses exceed taxable income for the taxable year.

In the case of any applicable taxpayer which is a foreign corporation, the adjusted taxable income shall be determined with respect to such income which is effectively connected with the conduct of a trade or business in the United States.

`(c) Reasonably Inflated Average Profit- For purposes of this chapter, with respect to any applicable taxpayer, the reasonably inflated average profit for any taxable year is an amount equal to the average of the adjusted taxable income of such taxpayer for taxable years beginning during the 2002-2006 taxable year period (determined without regard to the taxable year with the highest adjusted taxable income in such period) plus 10 percent of such average.

`(d) Qualified Investment- For purposes of this chapter, the term `qualified investment' means, with respect to any applicable taxpayer, means any amount paid or incurred with respect to--

`(1) any qualified facility described in paragraph (1), (2), (3), (4), (5), (6), (7), or (9) of section 45(d) (determined without regard to any placed in service date), or

`(2) any facility for the production renewable fuel or advanced biofuel (as defined in section 211(o) of the Clean Air Act 942 U.S.C. 7545).

If I'm reading it correctly, this bill defines "windfall profit" as when a company makes 10% greater profit in one year as compared to the previous year(s). Is that correct?

banyon
08-01-2008, 11:30 AM
I see. They should just eat the cost?

If you're in the vaccuum of the assumption of pure capitalism, then they should be in a competitive situation where they aren't in a position to simply dictate to consumers how much of the costs they can pass along. Unfortunately, that's not the case (especially since this is *such an inelastic good), so IMO this thype of constraint is needed to protect consumers from speculation and price fixing and other types of cartel and monopolistic behaviors. That, or antitrust actions by the people asleep at the switch at the DOJ.

BucEyedPea
08-01-2008, 11:42 AM
This is inconsistent.
banyon thinks FDR keeping prices up = good in the Great Depression
But bad now? *scratching head*

banyon
08-01-2008, 11:44 AM
This is inconsistent.
banyon thinks FDR keeping prices up = good in the Great Depression
But bad now? *scratching head*

If I actually engage this question, you're just going to run away anyway, right?

Taco John
08-01-2008, 11:45 AM
If you're in the vaccuum of the assumption of pure capitalism, then they should be in a competitive situation where they aren't in a position to simply dictate to consumers how much of the costs they can pass along. Unfortunately, that's not the case (especially since this is *such an inelastic good), so IMO this thype of constraint is needed to protect consumers from speculation and price fixing and other types of cartel and monopolistic behaviors. That, or antitrust actions by the people asleep at the switch at the DOJ.



So then, you're for nationalizing the industry, no?

Or to suit your pallette... You're for nationalizing the industry, but using terms and definitions in such a way that you could reasonably (at least in your mind) call someone else loony for characterizing it as such.

banyon
08-01-2008, 11:47 AM
So then, you're for nationalizing the industry, no?

Or to suit your pallette... You're for nationalizing the industry, but using terms and definitions in such a way that you could reasonably (at least in your mind) call someone else loony for characterizing it as such.

No is correct. I am not for any of the radical extremes you paint here.

'Hamas' Jenkins
08-01-2008, 11:51 AM
Okay, here's how that bill defined windfall profit. Can someone explain it to me in layman's terms please?

[i]SEC. 5897. WINDFALL PROFIT; QUALIFIED INVESTMENT.

`(a) General Rule- For purposes of this chapter, the term `windfall profit' means the excess of the adjusted taxable income of the applicable taxpayer for the taxable year over the reasonably inflated average profit for such taxable year.



If their raw profits are far exceeding what would normally be expected from inflation, then that excess would be taxed accordingly.

If inflation is 3.3%, and the price of your commodity has doubled, ,and you are still making a profit of 10%+, then I'm safely assuming that you would be far outpacing "reasonably inflated profit average."

Moreover, let's say they actually have less margin on oil this year. Even if they make 2% less margin, if their total revenue goes up 80%, they are still profiting far more than they did last year in terms of net dollars.

BucEyedPea
08-01-2008, 11:52 AM
It's true this is a heavily subsidized and overly regulated industry. That's more the problem here. The solution would be to undo those conditions and free it up so as to not bar any entry. Just the threat of competition will help hi energy prices. banyon's solutions are just more of the same and he thinks he going after purely market based causes.

You do know that the Iraqis' pay only 4¢ for a gallon. Guess who subsidizes that? We do.

Chiefnj2
08-01-2008, 11:53 AM
McCain reacted to the surprisingly dour jobs report with a two-paragraph statement: "Across this country, Americans are hurting and today's job numbers are just the latest reminder of the economic challenges we face. ... Unlike Sen. Obama, I do not believe that raising taxes is the answer to our economic problems. There is no surer way to force jobs overseas than to raise taxes on businesses.”

Translation = I have no idea how to fix the situation, so I'll sling some mud.

Donger
08-01-2008, 11:54 AM
If their raw profits are far exceeding what would normally be expected from inflation, then that excess would be taxed accordingly.

If inflation is 3.3%, and the price of your commodity has doubled, ,and you are still making a profit of 10%+, then I'm safely assuming that you would be far outpacing "reasonably inflated profit average."

Moreover, let's say they actually have less margin on oil this year. Even if they make 2% less margin, if their total revenue goes up 80%, they are still profiting far more than they did last year in terms of net dollars.

Thanks. I wonder if they want to apply such control over other industries as well, or is it just oil?

RaiderH8r
08-01-2008, 11:57 AM
The loony part is describing the Library of Congress as some sort of collectivist central planning facility.

Yeah, everybody knows that title goes to the Democrat Caucus room. Duh.

'Hamas' Jenkins
08-01-2008, 11:59 AM
Thanks. I wonder if they want to apply such control over other industries as well, or is it just oil?

I imagine it is just oil given the fact that a rather small amount of people are in control of a resource that is *taxing* the rest of the populace to such a great extent (16% of income for some on fuel costs??).

BucEyedPea
08-01-2008, 12:02 PM
I have a better idea, let's put heavy regulations on the Left Environmentalists.

Donger
08-01-2008, 12:02 PM
I imagine it is just oil given the fact that a rather small amount of people are in control of a resource that is *taxing* the rest of the populace to such a great extent (16% of income for some on fuel costs??).

If the oil companies were setting the price of crude, I would suppose they would have a valid argument.

Donger
08-01-2008, 12:03 PM
I have a better idea, let's put heavy regulations on the Left Environmentalists.

Pelosi's only trying to "save the planet." Giver her a break; it must be a tough job.

HonestChieffan
08-01-2008, 12:12 PM
The entire proposal is absurd. As time goes on Obama reinforces his lack of experience, his desperation to buy votes, and a total disregard for the impact of such stupid ideas as a windfall profit tax.

Taco John
08-01-2008, 12:13 PM
The entire proposal is absurd. As time goes on Obama reinforces his lack of experience, his desperation to buy votes, and a total disregard for the impact of such stupid ideas as a windfall profit tax.

Why is it any more absurd than Bush's "stimulus checks?"

More of our tax money in our pockets can only be a good thing, no? We're the ones that earned the money in the first place, right?

Taco John
08-01-2008, 12:16 PM
No is correct. I am not for any of the radical extremes you paint here.


Ok, now we're getting somewhere... Nationalizing an industry is radical. I can buy that.

Donger
08-01-2008, 12:17 PM
Why is it any more absurd than Bush's "stimulus checks?"

More of our tax money in our pockets can only be a good thing, no? We're the ones that earned the money in the first place, right?

Seems like the oil companies are the one's who "earned" it.

Nightfyre
08-01-2008, 12:18 PM
If you're in the vaccuum of the assumption of pure capitalism, then they should be in a competitive situation where they aren't in a position to simply dictate to consumers how much of the costs they can pass along. Unfortunately, that's not the case (especially since this is *such an inelastic good), so IMO this thype of constraint is needed to protect consumers from speculation and price fixing and other types of cartel and monopolistic behaviors. That, or antitrust actions by the people asleep at the switch at the DOJ.

WHAT CARTELS AND MONOPOLISTIC BEHAVIORS? You are making shit up here. 10% profit margin (from what donger told me) is indicative of a HIGHLY COMPETITIVE INDUSTRY. No one is going to sell you gasoline at a loss. The variable costs of CRUDE alone have practically doubled over the last year. No one can get cheaper crude, or they would. Therefore, the cost to produce is universally (meaning for all producers) increased, the cost to purchase is universally increased. No surprise.

Further still, if you want to talk about barriers to competitive entry, you need to look no further than the costs involved with just trying to be ALLOWED to create an oil refinery. Of course, your friends, the democrats, would have nothing to do with allowing those vile abominations to be constructed. As usual, the increased levels of government and regulations prevents competition from entering the market allowing oil companies to garner slightly elevated profit margins over a perfectly competitive market, yet let's blame the company for acting in the best interest of its shareholder.

Where is penchief with his greed-ethic nonsense? You wanna go too/

Nightfyre
08-01-2008, 12:18 PM
The entire proposal is absurd. As time goes on Obama reinforces his lack of experience, his desperation to buy votes, and a total disregard for the impact of such stupid ideas as a windfall profit tax.

Its moronic to assume those costs wouldn't be factored into the cost of gasoline on an industry wide tax. All you'd see is an increase in price to match it.

Chiefnj2
08-01-2008, 12:21 PM
WHAT CARTELS AND MONOPOLISTIC BEHAVIORS? You are making shit up here. 10% profit margin (from what donger told me) is indicative of a HIGHLY COMPETITIVE INDUSTRY. No one is going to sell you gasoline at a loss. The variable costs of CRUDE alone have practically doubled over the last year. No one can get cheaper crude, or they would. Therefore, the cost to produce is universally (meaning for all producers) increased, the cost to purchase is universally increased. No surprise.

Further still, if you want to talk about barriers to competitive entry, you need to look no further than the costs involved with just trying to be ALLOWED to create an oil refinery. Of course, your friends, the democrats, would have nothing to do with allowing those vile abominations to be constructed. As usual, the increased levels of government and regulations prevents competition from entering the market allowing oil companies to garner slightly elevated profit margins over a perfectly competitive market, yet let's blame the company for acting in the best interest of its shareholder.

Where is penchief with his greed-ethic nonsense? You wanna go too/

Since there were only one or two applications submitted in the last 30 years to build a new refinery the Dems didn't have much of an opportunity to block or deny the construction of such a facility.

splatbass
08-01-2008, 12:21 PM
I like how he more or less made up these windfall profits.

Really?

http://www.chron.com/disp/story.mpl/nation/5918750.html

Nightfyre
08-01-2008, 12:32 PM
Really?

http://www.chron.com/disp/story.mpl/nation/5918750.html

Let me highlight the important statistic for you

Low refining margins slashed the company's refining income by $1.8 billion. A refining margin is the difference between what companies pay for crude and the selling price of gasoline and other products made from it, and those margins have been squeezed amid rising oil prices.


These "windfall profits" are nothing short of bogus. The margin as a percentage has gone down. they had to invest more on a regular basis and therefore earn a higher dollar amount. If I invest $10000 in t-bonds and receive 3% annually, I would receive $300. If I invest $20000 and my 'profit' suddenly jumps to $600, is that a windfall profit? I think not.

banyon
08-01-2008, 12:33 PM
WHAT CARTELS AND MONOPOLISTIC BEHAVIORS? You are making shit up here. 10% profit margin (from what donger told me) is indicative of a HIGHLY COMPETITIVE INDUSTRY. No one is going to sell you gasoline at a loss. The variable costs of CRUDE alone have practically doubled over the last year. No one can get cheaper crude, or they would. Therefore, the cost to produce is universally (meaning for all producers) increased, the cost to purchase is universally increased. No surprise.

Further still, if you want to talk about barriers to competitive entry, you need to look no further than the costs involved with just trying to be ALLOWED to create an oil refinery. Of course, your friends, the democrats, would have nothing to do with allowing those vile abominations to be constructed. As usual, the increased levels of government and regulations prevents competition from entering the market allowing oil companies to garner slightly elevated profit margins over a perfectly competitive market, yet let's blame the company for acting in the best interest of its shareholder.

Where is penchief with his greed-ethic nonsense? You wanna go too/

You don't think OPEC is a cartel? I don't even understand how you could dispute that claim.

As for American industries, have you seen their names lately? ConocoPhillips, ExxonMobil, ChevronTexaco, BPAmoco. These used to be 8 companies, now they are 4.

As for your point about profit margin, as Donger has tried to argue nonsensically, profit margin is not the key indicator, profit is. You can easily increase profit by increasing volume or your market share.

This is a pretty good summary (http://www.citizen.org/documents/oilmergers.pdf) of what's happened in the last 15 years:

________
Mergers, Manipulation and Mirages: How Oil Companies Keep Gasoline
Prices High, and Why the Energy Bill Doesn’t Help
Summary
The United States has allowed multiple large, vertically integrated oil companies to merge over the last five years, placing control of the market in too few hands. The result: uncompetitive domestic gasoline markets. Large oil companies can more easily control domestic gasoline prices by exploiting their ever-greater market share, keeping prices artificially high long enough to rake in easy profits but not so long that consumers reduce their dependence on oil (after all, if prices went up too high for too long, then we’d seek alternatives to oil).
The largest five oil companies operating in the United States (ExxonMobil, ChevronTexaco,
ConocoPhillips, BP and Royal Dutch Shell) now control:
· 14.2% of global oil production (nearly as much as the entire Middle East members of the
OPEC cartel).
· 48% of the domestic oil production (which is significant given the fact that the U.S. is the
3rd largest oil producer in the world).
· 50.3% of domestic refinery capacity.
· 61.8% of the retail gasoline market.
· These same five companies also control 21.3% of domestic natural gas production. It is therefore little wonder why these top companies enjoyed after-tax profits of $60 billion in 2003 alone.
These figures are in stark contrast to just a decade ago, when the top five oil companies
controlled only:
· 7.7% of global crude oil production.
· 33.7% of domestic crude oil production.
· 33.4% of domestic refinery capacity.
· 27.0% of the retail market.
· In addition, in 1993, the top five U.S. companies controlled only 12.7% of domestic natural gas production.
The major difference between 1993 and 2003 is that the largest oil companies have merged with one another, creating just a handful of oil monopolies that control significant chunks of the American oil and gas markets. Armed with significant market share, companies can more easily pursue uncompetitive activities that result in price-gouging. The lack of investigations into domineering practices by these large companies may be explained by the more than $67 million the oil industry has contributed to federal politicians since 1999—with 79% of that amount going to Republicans. In addition, t

Nightfyre
08-01-2008, 12:36 PM
Since there were only one or two applications submitted in the last 30 years to build a new refinery the Dems didn't have much of an opportunity to block or deny the construction of such a facility.
Thats because they build them elsewhere, where people are willing to allow an oil refinery. Environmental regulations and nimby sentiment in addition to high labor prices pushing refining out of the country? say it isn't so.

banyon
08-01-2008, 12:38 PM
Thats because they build them elsewhere, where people are willing to allow an oil refinery. Environmental regulations and nimby sentiment in addition to high labor prices pushing refining out of the country? say it isn't so.

As Chiefnj said, there were only 2 applications (including the very recent SD one) in the last 30 years. So without the oil companies even trying, there really weren't any opportunities for communities to raise the kind of opposition you are alleging occurred.

Donger
08-01-2008, 12:39 PM
Since there were only one or two applications submitted in the last 30 years to build a new refinery the Dems didn't have much of an opportunity to block or deny the construction of such a facility.

Are you being serious?

Chiefnj2
08-01-2008, 12:40 PM
Are you being serious?

Yes.

banyon
08-01-2008, 12:41 PM
Are you being serious?

That's pretty well known, I had thought.

banyon
08-01-2008, 12:41 PM
It's true this is a heavily subsidized and overly regulated industry. That's more the problem here. The solution would be to undo those conditions and free it up so as to not bar any entry. Just the threat of competition will help hi energy prices. banyon's solutions are just more of the same and he thinks he going after purely market based causes.

You do know that the Iraqis' pay only 4¢ for a gallon. Guess who subsidizes that? We do.

What regulatory bar to market entry do you think is presently keeping people from entering the market?

Nightfyre
08-01-2008, 12:44 PM
You don't think OPEC is a cartel? I don't even understand how you could dispute that claim. Well, I don't see how Mr. Obama is going to tax opec, which is far more relevant to the argument.

As for American industries, have you seen their names lately? ConocoPhillips, ExxonMobil, ChevronTexaco, BPAmoco. These used to be 8 companies, now they are 4.

As for your point about profit margin, as Donger has tried to argue nonsensically, profit margin is not the key indicator, profit is. You can easily increase profit by increasing volume or your market share.

Seem my above post

This is a pretty good summary (http://www.citizen.org/documents/oilmergers.pdf) of what's happened in the last 15 years:

________
Mergers, Manipulation and Mirages: How Oil Companies Keep Gasoline
Prices High, and Why the Energy Bill Doesn’t Help
Summary
The United States has allowed multiple large, vertically integrated oil companies to merge over the last five years, placing control of the market in too few hands. The result: uncompetitive domestic gasoline markets. Large oil companies can more easily control domestic gasoline prices by exploiting their ever-greater market share, keeping prices artificially high long enough to rake in easy profits but not so long that consumers reduce their dependence on oil (after all, if prices went up too high for too long, then we’d seek alternatives to oil).
The largest five oil companies operating in the United States (ExxonMobil, ChevronTexaco,
ConocoPhillips, BP and Royal Dutch Shell) now control:
· 14.2% of global oil production (nearly as much as the entire Middle East members of the
OPEC cartel).
· 48% of the domestic oil production (which is significant given the fact that the U.S. is the
3rd largest oil producer in the world).
· 50.3% of domestic refinery capacity.
· 61.8% of the retail gasoline market.
· These same five companies also control 21.3% of domestic natural gas production. It is therefore little wonder why these top companies enjoyed after-tax profits of $60 billion in 2003 alone.
These figures are in stark contrast to just a decade ago, when the top five oil companies
controlled only:
· 7.7% of global crude oil production.
· 33.7% of domestic crude oil production.
· 33.4% of domestic refinery capacity.
· 27.0% of the retail market.
· In addition, in 1993, the top five U.S. companies controlled only 12.7% of domestic natural gas production.
The major difference between 1993 and 2003 is that the largest oil companies have merged with one another, creating just a handful of oil monopolies that control significant chunks of the American oil and gas markets. Armed with significant market share, companies can more easily pursue uncompetitive activities that result in price-gouging. The lack of investigations into domineering practices by these large companies may be explained by the more than $67 million the oil industry has contributed to federal politicians since 1999—with 79% of that amount going to Republicans. In addition, the oil industry spends an additional $50 million every year lobbying Congress and the White House. These investments into buying support of Congress and the White House is paltry compared to the largest five oil companies’ $125 billion in after-tax profits since 2001.
Gasoline prices are rising because of uncompetitive actions by this handful of new megacompanies, not because of environmental regulations. Forecasts say that gas prices will reach historic highs this spring, with the national average exceeding $1.80 a gallon, the highest prices (adjusted for inflation) since 1985. Already in some parts of the country, prices passed $2.10 a gallon, with some predicting as much as $3 gallon in certain areas by this summer.
The Bush administration blames environmental rules for causing strains on refining capacity, prompting shortages and driving up prices. But in reality it is uncompetitive actions by this handful of companies with large control over our nation’s gas markets that is directly causing these high prices. These uncompetitive actions by the largest oil firms have forced much of the 920,000 barrels of oil per day of refinery capacity formerly owned by smaller, independent refiners that has been shut down in recent years.
The U.S. Federal Trade Commission (FTC) concluded in March 2001 that oil companies had intentionally withheld supplies of gasoline from the market as a tactic to drive up prices—all as a “profit-maximizing strategy.” These actions, while costing consumers billions of dollars in overcharges, have not been challenged by the U.S. government.
At the same time that the industry is consolidating, the Bush administration’s decision to fill the nation’s Strategic Petroleum Reserve (SPR) is contributing to tight domestic supplies, further driving up the price of oil and gasoline. Since 2001, President Bush has been removing more than 100,000 barrels of oil a day from the market to stock the SPR, filling it by more than 100 million barrels since he’s been in office to over 640 million barrels—well more than 90% capacity. President Bush’s actions, while providing more than enough protection against external supply shocks, severely strains domestic supplies for the market. For example, if the entire Middle East OPEC cartel decided today to no longer sell oil to the U.S., we could rely on current SPR reserves for ten months to make up the difference. SPR supplies can be selectively released without harming national security while helping the economy and consumers.
In addition, deregulation of energy trading markets (like the ones exploited by Enron) has removed significant transparency from the futures oil and natural gas markets, allowing oil companies and Wall Street investment banks to potentially manipulate the futures markets as well.
While the Bush administration and members of Congress claim that the stalled energy bill will provide new supplies to the market and therefore force down prices, the government’s official analysis concludes that the billions of dollars the energy bill would spend on subsidies to energy...
Blah blah blah, brash claims unsupported by one shred of evidence. Also, withholding supplies is a legitimate business practice as far as I'm concerned. Like, OMG the citizens of America are not selling their homes at supercheap right now! Its common sense.

Donger
08-01-2008, 12:44 PM
Yes.

Are you aware of what is required, in order of time and money, to get a new refinery going?

Nightfyre
08-01-2008, 12:44 PM
What regulatory bar to market entry do you think is presently keeping people from entering the market?
Environmental regulations and nimby sentiments in addition to reporting standards for environmental regulations.

Chiefnj2
08-01-2008, 12:59 PM
Environmental regulations and nimby sentiments in addition to reporting standards for environmental regulations.

If there was a profit to be made the environmental regulations and nimby sentiments would be a matter of cost of doing business.

Donger
08-01-2008, 01:04 PM
If there was a profit to be made the environmental regulations and nimby sentiments would be a matter of cost of doing business.

Or, they could just expand the existing refineries (which they have) instead of dealing with it at all.

I fully acknowledge that the oil companies will maximize profit. I have no problem with that. But to suggest that they haven't built any new refineries not due to the time and money imposed by our government is laughable.

Radar Chief
08-01-2008, 01:11 PM
If there was a profit to be made the environmental regulations and nimby sentiments would be a matter of cost of doing business.

Indeed. "If there was a profit to be made".
That gets to the next question, why isn't there a profit to be made?

But to suggest that they haven't built any new refineries not due to the time and money imposed by our government is laughable.

:hmmm:

Chiefnj2
08-01-2008, 01:23 PM
Indeed. "If there was a profit to be made".
That gets to the next question, why isn't there a profit to be made?



:hmmm:

Because by shutting down most refineries and increasing production at the ones that were in existence they saved money and could control the output and help control prices.

Donger
08-01-2008, 01:29 PM
Because by shutting down most refineries and increasing production at the ones that were in existence they saved money and could control the output and help control prices.

You are aware that we can't meet demand for refined gasoline domestically, right? You are aware that we import not only crude, but also refined gasoline in order to meet our demand?

Last I checked, we average about a million barrels per day. It's ridiculous that we import crude at all, considering we could drill our own, but the only reason we have to import refined gasoline is because we don't have the domestic capacity to refine to our demand.

mlyonsd
08-01-2008, 01:38 PM
Somebody explain to me what is different about this than when Jimmy Carter did it? I think back then it was just on crude, but you know the time, when domestic oil production fell and foreign dependence rose?

Nightfyre
08-01-2008, 02:17 PM
If there was a profit to be made the environmental regulations and nimby sentiments would be a matter of cost of doing business.

Barrier costs to entry. Thats what he asked about. Regulations hurt competition in this respect. What have I not made clear?

SBK
08-01-2008, 03:13 PM
Is there any doubt that democrats do not want the price of oil to go down?

Inflate your tires you poor mother f'ers.

banyon
08-01-2008, 04:53 PM
Well, I don't see how Mr. Obama is going to tax opec, which is far more relevant to the argument.

Seem my above post

Blah blah blah, brash claims unsupported by one shred of evidence. Also, withholding supplies is a legitimate business practice as far as I'm concerned. Like, OMG the citizens of America are not selling their homes at supercheap right now! Its common sense.

Yeah, screw you Federal Trade Commission!

(and collusion is not a legitimate business practice, despite your feelings)

banyon
08-01-2008, 04:54 PM
Environmental regulations and nimby sentiments in addition to reporting standards for environmental regulations.

How are those barriers to entry when they are the same regulations that existing companies must abide by?

Nightfyre
08-01-2008, 05:00 PM
How are those barriers to entry when they are the same regulations that existing companies must abide by?

I worked for an environmental engineering company. More or less, they provided the low-cost end equipment for monitoring a wide variety of plants. They require a high amount of upfront investment when establishing those plants, including the monitoring equipment.

patteeu
08-01-2008, 07:42 PM
Give me more of my money back. I'll take it.

This beats the hell out of a gas tax holiday.

Ron Paul is spinning in his political grave.

Ultra Peanut
08-02-2008, 12:13 AM
It's not perfect, but it's infinitely superior to the "gas tax holiday."

wazu
08-02-2008, 12:18 AM
Ron Paul is spinning in his political grave.

I thought the same thing when I read that. So a company making an 8-9% profit margin should be forced by government to mail $1000 checks to all taxpaying citizens as punishment for their success? What could possibly be more un-American?

Ultra Peanut
08-02-2008, 01:24 AM
And I know this is COMMMMMMMMMUNISM!!!!!!!!!!, but the main thing this does is balance out the tax relief that was granted to the oil companies a while back, since they don't exactly need the help anymore.

banyon
08-02-2008, 09:05 AM
I worked for an environmental engineering company. More or less, they provided the low-cost end equipment for monitoring a wide variety of plants. They require a high amount of upfront investment when establishing those plants, including the monitoring equipment.

How much do these monitoring devices cost in a multi-billion dollar industry?

The barrier isn't minimal environmental oversight, it's that the companies that already have such a lion's market share have already locked in all of the deals and contracts with their buddies in OPEC. If there's any oil left here, it's mainly already leased. I can't just start up an oil company and start talking to King Abdullah tomorrow. The fact that you blame environmental regulations for the aggressive mergers and deals that have actually created the oil oligopoly we have is just being a contrarian, IMO.

It's like saying that I won't be able to start a car wash because of the high cost of making sure my chemicals don't go into the county storm drain. It's a penny in the bucket comparatively.

HonestChieffan
08-02-2008, 12:37 PM
In a liberal/enviro kooks mind, all environmental costs are good. The more the better. Almost as good as taxes.

banyon
08-02-2008, 01:29 PM
In a liberal/enviro kooks mind, all environmental costs are good. The more the better. Almost as good as taxes.

Another solid contribution. :thumb:

***SPRAYER
08-03-2008, 08:25 AM
:clap:

h.leven
09-02-2011, 06:13 PM
bump

:thumb: