Breaking Wind

So, the oil industry is reporting record profits. How is this possible? They must be fleecing you and me! Greedy bastards!

But wait a minute... if oil is so profitable, where are all the oil startups trying to jump in and grab some of the booty? Where's all the new refinery construction? New ports? New pipelines? Entrepreneurs must be pretty dumb not to be entering the oil industry right now in the face of these record profits. Oh wait, it's almost impossible to build a refinery or pipeline, you say? Hmmm, why is that? Government regulations and NIMBYism you say? Hmmm...

So I guess that means that this really is a windfall, and the source of the windfall is all the wonderful barriers to entry the government has erected to keep competition out of the oil industry. And now the government is demanding payment for their help in the form of a "windfall tax" above and beyond the tax windfall they will already receive. I guess our friendly neighborhood congresscritters are too afraid to ask for bribes directly in the face of recent scandals, so instead they'll get their bribes "officially" and pay them out to their buds in the form of earmarks, then get cushy jobs when they leave congress. How do I sign up for that?

So, I guess when I hear Nationalist People's Radio talking about windfall profits, I won't yell at the radio any more telling them it's not a windfall. It's sure as heck a windfall, just not for the people they claim.

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Actually there are pretty

Actually there are pretty low barriers to entry, all you need is a few hundred thousand dollars to drill a shallow well. That's why profits are small except in times of shortage.

Extraction is far from being

Extraction is far from being the only service provided by oil companies. Transportation and refining are at least as expensive and just as regulated. Even if you have a well, who's going to refine that oil? Why, your big-oil competitor of course!

I guess big oil companies

I guess big oil companies have been engaged in the despicable process of giving legitimacy to the Chinese government too...

Ohmigod the oil company just

Ohmigod the oil company just made money at my expense! Of course, so did Wal-Mart, the grocery store, the local burger place, the movie theater, the place that changes the oil in my car, and the nice lady who rents my house to me. Come to think of it, greedy businesspeople are making money off of me every day! I demand the government do something!:wall:

I demand the government do

I demand the government do something!

Good idea. The government's been making record losses, so they must be on our side!

For what it's worth I think

For what it's worth I think my greedy landlord would charge less if there were no government regulation.

>>Oh wait, it’s almost

>>Oh wait, it’s almost impossible to build a refinery or pipeline, you say? Hmmm, why is that? Government regulations and NIMBYism you say? Hmmm…

Gee, I wonder if the owners of the existing refineries and pipelines gave "campaign contributions" to those legislators who created the barriers to entry?

It's called "Corporate Statism" for a reason.

You're absolutely right, TJ,

You're absolutely right, TJ, but it's the legislators who have the responsibility to me. Or that's the idea, anyway.

A question about oil

A question about oil prices:
Bill O'Reilly and other populists were claiming that the oil companies were manipulating their prices after Hurricane Katrina to make their excessive profits. If I remember correctly, he also said that because Congress would be looking into the matter, that the companies in turn would lower prices. Basically, claiming that the oil companies were at least working at the same time, or together, to jack the prices up and down when they felt the heat...

Now, I have to admit, there has been an eerie situation in prices after Katrina, at least in the Louisiana area. First, the prices "skyrocketed" after Katrina (which seems normal considering that the supply of gas was hit). Then, over a period of time, the gas prices dropped to less than $2.00 a gallon (this was about I'd say November), which would make sense if the gas companies had fixed their supplies. Since then, the gas prices have again risen again to where regular unleaded is $2.30/gallon. My theory at the time of Novermber was that the oil companies had fixed the supply, and so the prices dropped. But now that the prices have risen to almost post-Katrina levels, I don't know what to think?
Does anyone know if any shocks happened to world oil supply in the last few months? Is this just a local phenomenon of Louisiana?

I hate to say it, but I am beginning to revise my opinion of the possibility of collusion, or at least that politics has a greater impact on prices than I had thought (ie that corporations can "rig" prices against the market succesfully)...

Frank: Roderick Long has


Roderick Long has already argued that the existence of government indeed has the effect of encouraging large, hierarchical, cartelized firms.