OT: Have we become that stupid ..

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I am for as little government intervention as possible but I believe that the Oil companies, insurance companies, and electric companies should be limited to the "percent" of profit that they can make. Earlier this year I heard that Exxon had made 10 times the profit as the year before. How can they make 10 times the profit if sales have not gone up proportionally? Uh huh, price gouging and the media sets us up for it the day before.
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"Leon" wrote in message

Texas did that for a long time with the Utilities ... too bad the rural common sense exhibited by early legislators got polluted by the carpetbaggers mentality of the 70's and 80's, and the MBA's ability to buy politicians from the big cities bent on "getting theirs".
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Leon wrote: ...

What business are you in? Why should yours be allowed to make whatever profit level you can as opposed to someone else's?
What is needed isn't price control but reducing the restrictions on increasing supply...
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My business does not affect the economy of the whole country as do the ones I mentioned. I am self employed designing and building custom furniture and cabinets. Suppose your groceries and house payments go up 50% this year like the gasoline you buy has. Let the luxury items go up but basically everyone has to have gasoline, insurance, and electricity suppliers and those suppliers are well aware it. My customers can choose not to buy my products but darn few Americans can choose not to have any thing to do with Oil, Electricity, and Insurance.
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Leon wrote:

That's business...
Until the 70's the saw was "1 bu wheat == 1 bbl oil". Now, it's more like "20 bu wheat == 1 bbl oil". Needless to say, my margins are no better than yours.
While harsh, I see no basic justification for price controls in the long term. There's some justification for trying to get some short term relief to try to fix results of the current natural disaster and a little longer term to try to aid the recovery from the last 20 years or so of shortsighted policy which has been the prime cause of non-expanding production facilities.
If there were any specific place where I <might> support additional regulation it would be to add some additional controls over the purely speculative side of the commodities markets. The problem there is that the markets serve a purpose and it is often true that fixes cause more disruptions than they cure.
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Leon wrote:

I'll stand on both sides of this issue. I think we need to carefully examine current talked about oil sources for the absolutely least harmful methods of extraction, while also limiting oil and electrical "utilities" to a reasonable profit level, tied to inflation. When I was a kid, it was done that way throughout NY State. Now? So-called utilities have become just another in an evergrowing group of businesses whose primary aim is to screw the customer out of as much money as possible. Yes, businesses are there to make a profit. Yes, making a good profit is the reason for the existence of most businesses. But at one time, businesses tended to get started as a way for one or two or however many people to make a living, hopefully a good one, while also providing a product or service to as broad a customer base as possible--done by keeping quality up and price down.
That's gone, and it left at higher speed throughout the greedy '80s, and even the ashes are being sucked out the door by corporate (and stockholder) greed of the new century.
Someone really needs to acquaint MBAs, including that beady eye asshole in the White House, with the story of the golden goose, because they are strangling it, more quickly each week.
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[...]

Exactly what I think. I call the economic system now in place "greed driven chaos economy", where stuff gets produced because it promises profits and not because it's needed, as can be seen by such enourmous markets for cell phone ring tones, addictive drugs and SUVs.
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Juergen Hannappel wrote:

It's the other way 'round...demand creates the market for those items just as it does for oil or bread. If nobody was interested in the coolest ring tone for the cell phone, no one would be able to sell them. If the teeny-bopper wants to spend his $$ that way, there's no reason someone shouldn't supply that ability.
Regarding the drugs, etc., it's been long demonstrated one can't legislate morality.
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[snip]

Demand is one; advertising is another. Witness prescription drugs, toiletries, soup, autos, etc. One could make a case that the latter is more powerful than the former.     Burma Shave,     jo4hn
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jo4hn wrote:

All that advertising does is (hopefully, successfully :) at least from the sponsor's viewpoint) is to stimulate/create demand. If it doesn't succeed, no market. So it all comes back to demand.
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Duane Bozarth wrote:

The original complaint/statement was about greed, not foolishness. Foolishness is a part of being human, so ring tones fit perfectly in that context, but it's possible to be upset that a guy in the entertainment industry has a contract that gives him $130 million for a year's work duing which by ever indicator he failed to properly do his job. Or by Enron. Or by price gouging by oil distributors. Or by profiteering by...ah hell, the list is endless. Ring tones are just teenaged silliness that unfortunately overlaps in those as old as 35, IME (as does much teenage silliness these days).
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Charlie Self wrote: ...

Certainly corruption and willful negligence are not to be condoned. But despite the high profile such cases make, they're still more the exception than the rule.
As for the entertainment bozo, perhaps there's some event or relatvely recent occurrence of which I'm supposed to be aware, but I've no clue as to who/what you refer to. If the studio paid, one would assume they felt they got their money's worth or they would have taken recourse.
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Duane Bozarth wrote:

Orvitz? Is that his name? Supposedly the right fit to run Disney and blew it big time. He had a platinum parachute, and there doesn't seem to be much that is done when these hotshot execs find themselves riding the saddle of the Peter Principle. There are hundreds who have gotten pushed out the door with major millions lining their retirement walls.
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Charlie Self wrote: ...

Oh. The golden parachute. A lamentable phenomenon but one that Boards of Directors and stockholders can see isn't repeated if they choose to do so.
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Duane Bozarth wrote:

This problem is relatively easy to fix. The vast majority of public stock is held by large funds - especially retirement funds. These funds DO exercise considerable control over the board and they do control who gets on the board. Despite what you hear about the "rich guys" that control everything, its just not so. Most stock is held by teachers' and other union retirement funds, mutual funds, and so forth. The percentage of public corps held by Management is actually rather small in almost all large publicly traded firms.
When you see an Ovitz or someone similar walking out with big cash, remember that the many citizen owners - expressing their will through their retirement holdings especially, put that deal into play in the first place, presumably because they believed that the individual in question was worth the price of his/her contract. IOW, it's not the Rich Bastards doing this, it's the many owners of the funds permitting/encouraging it.
The problem is *the next biggest group* of investors - the employees. Most companies of any size grant stock as a portion of employee retirement/401K/pension funds. But here's the rub: This very large block of stock (over time) *is voted by the board*! The one significant change in today's corporate governance we need is that if an anyone owns the stock - whether by grant or outright purchase - only *they* can vote it, either directly or by signing a proxy. It does not take anywhere near a full majority of the stock to control the board or win a proxy fight in most companies. By having the employees be able to vote what is theirs, companies would either have to stop granting them stock (to maintain the status quo) or start listening to one of their most significant asset bases.
I am as pro-business as they come, but the current employee stock voting situation is iniquitous and unfair.
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Juergen Hannappel wrote:

You guys are unbelievable. Just *who* do you propose is smart enough/wise enough/experienced enough to be "in charge" of what gets produced and how much profit gets made. How shall we choose? Popular vote? What joke - the Sheeple already want Something For Nothing. They would bankrupt the economy in months. Politicans? Oh please. I've lived in Canada, the US, and Europe. One thing all these areas have in common is that politicans are largely useless corrupt lumps whose dishonesty makes the sins of the private sector shrink into invisibility.
"Greed" and market economies are what have given us unprecedented lifespan, comfort, free time, gagets, better homes, and and overall higher quality of life. The one thing we've apparently utterly failed to do is educate people on how economics actually operate and what works (and what does not). May I gently suggest the following reading:
Economics In One Lesson - Hazlitt The Road To Serfdom - F.A. Hayek
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On Thu, 1 Sep 2005, Tim Daneliuk wrote:

Two excellent choices for beginnings...follow up with some of the works of Ludwig Von Mises and Murray Rothbard's Man, Economy and State. I would never have expected Hazlitt or Hayek to have been referenced in rec.woodworking though. Good for you, Tim.
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Duane Bozarth wrote:

Hand this man a fine cigar ... Exactly right!
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In 1981, I was part of a group that did a study for a large regional producer/distributor of natural gas. They had the technology and the opportunity to convert various types of coal & tar sands to natural gas. As long as the produced gas was free of price controls, and able to be sold on the market at a price pegged to the world oil price, it was a profitable business, at least on paper.
The leadership was convinced that the various regulators would require them to sell it under the same terms and conditions as the gas they were currently harvesting and selling under strict price controls. The facility was never built.
I presume the resources are still available, but the company has moved on.
Price controls distort markets. That may not be the worst thing in the world, but I doubt we, as represented by government or corporations, are as smart as we think we are.
Patriarch, aware that there are weasels everywhere, and that the energy industry seems to have more than their share.
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Leon wrote:

And then you wonder why the Big Evil Oil Companies don't want to build very costly infrastructure like pipelines and refineries? Here is a clue: You cannot interfere with the profit potential for an institution AND at the same time demand that they sink more money into longterm infrastructure builds.
The US has consistently had growing energy needs while at the same time reducing or eliminating additional energy *sources* from its bag-o-tricks. We haven't built a nuclear plant or an oil refinery in decades. The ANWR just got opened up for drilling even though the will and desire to do so has been there for years. And so on and so on and so on.
The truth is that most people use energy but very few pay attention to the politics of energy production. In one corner you have the Green Gasbag environmentalists who worship the earth and indulge in fantasy science. In another you have the politicans who want to get paid off before anything moves forward. In another corner, you'll find the irresponsible regulators who pay attention to all the wrong things. This allows genuine environmental atrocities like Love Canal to go unmonitored until it is too late so we have to use tax monies to clean up what should have been paid for by the polluter. In the final corner we have positions like the one above: Let's *inhibit* the energy companies from being too successful and lets blame them for all our miseries. Is it any wonder we have a supply/demand problem with energy today?
The reality is that, even at $3+ per gallon, the inflation-adjusted price for energy today is *lower* than it has been throughout most of US history. It is *lower* than the price paid in Europe or Asia on the whole.
The answer to this problem is to let markets do their job. When crude hit $50 a barrel or so, it suddenly became economically rational to process Canadian shale reserves. When it hit $60, even the eco-weenies started making positive noises about Nuclear. As/when/if crude continues rise, there will incentive for alternative/hybrid/yet to be discovered ways to harness energy. The absolute *worst* thing we could do would be to stick the government's beak into the business and further try and regulate desireable outcomes. Meddling by those political pilferers will do nothing more or less than drive investment and people *out* of the energy business.
You think oil companies make too much money? Then this is a great opportunity for you to *invest* in them if you believe their profits are sustainable (I don't - the market always corrects).
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