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.
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".
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
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.
Until the 70's the saw was "1 bu wheat == 1 bbl oil". Now, it's more
"20 bu wheat == 1 bbl oil". Needless to say, my margins are no better
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.
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.
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.
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
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).
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.
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.
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
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
I am as pro-business as they come, but the current employee stock voting
situation is iniquitous and unfair.
Tim Daneliuk email@example.com
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
Tim Daneliuk firstname.lastname@example.org
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.
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
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.
aware that there are weasels everywhere, and that the energy industry
seems to have more than their share.
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
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
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 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).
Tim Daneliuk email@example.com
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