Of course, at the moment it’s frustrating to pay more at the pump, but oil profits aren’t the culprit, nor would punishment of the energy companies help to bring down the cost of fuel. When businesses pay a heavier burden in taxes, it doesn’t make prices go down; it generally forces prices to go up, whenever companies can pass on the cost to the consumer. The idea that “windfall profit taxes” would cause oil companies to charge less flies against every rule of economic reality. If you add to the cost of production with new levels of governmental taxation or regulation it means that either prices go up or else profits go down – meaning less incentive for production, less production and, inevitably, higher prices.
Moreover, any attempt to “cap” the price of gas at the pump in the US would prove massively counterproductive. If oil companies receive less money for their products from American consumers than they do from consumers in Europe, Asia and elsewhere, isn’t it obvious that they’ll divert most of their production to those economies where they receive the best prices? In other words, if energy companies couldn’t sell their products in the US for market prices, they’d send them to hungry, surging markets in the rest of the world for top dollar, creating a US gas shortage that would prove far more damaging than even $3.50 a gallon.
Despite the disruption of war and hurricanes and capricious government regulation, big oil companies have managed to insure the steady, uninterrupted supply of energy that fuels every aspect of our personal and business lives. The profits they’ve generated while answering these needs hardly count as “obscene.” The only real obscenity involves the inane liberal conviction that companies or individuals engaged in legal, constructive endeavors should ever feel ashamed or apologetic about their success.
Republican Candidates Versus The New York Times: Why Isn’t the Economy Growing Faster? | John C. Goodman