Friday, April 28, 2006
Why be so "crude" about gas prices?
If I hear one more person whinning and complaining to me about the "outrageous oil prices" I think I'm going to go apesh*t! I've just about had all I can stand of these IDIOTS running up and down the isles screaming thoughtless dribble like: "Big Oil Is PRICE GOUGEING," "The Government should DO SOMETHING about those billion dollar crooks!, and "I'm gonna have to sell my children to fill up my Suburban!" Seriously... SHUT UP!
Ok, in case you didn't already know how economics works since you went to puplic school here's a quick lesson on supply and demand. When the demand for a product is greater than the supply of the product the price of the product goes up. There... was that so hard? Supply and demand is the MAIN factor in the price of gas. The demand for crude oil is much higher than the supply.. therefor the price of a barrel of oil is high... thats why its costing $75 per barrel right now. And the cost that the oil companies incur in purchasing the crude oil DIRECTLY affects the price that they have to CHARGE to cover said cost. High incurred cost = high charged price of gasoline and ALL OTHER PRODUCTS made from the crude. Not to mention the fact that we have a SEVERE shortage of refineries that can convert that crude into the miriade of other products that is made from "black gold." And don't make me mention the stiffling restrictions that the environmentalits and democrats have slapped on refineries ( like sulfer filteration and multiple fuel mixtures using ethanol and other expensive additives ) as well as drilling restrictions on our own soil (ANWR anyone?). That FORCES us to have to rely on very expensive foreign oil rather than on our OWN massive reserves in Alaska and off the coast of Florida.
Now... Let us assume that gas is 3.00 per gallon. By the time you remove the imbedded taxes ( state AND federal ) which comes to around 85 cents per gallon, the COST of the oil and refining and transportation which comes to nearly 2.00 per gallon, AND the price that the gas STORE charges us which is around 10 cents per gallon the oil company itslef makes ONLY 25 cents per gallon of 87 octane gasoline! That, again in case you are from the public school system, comes to LESS than 10% profit margin!
PROFIT MARGIN is the factor that we have to look at in determining how much these oil companies are actually making. Did you know that your local financial institution ( ie. Bank ) makes near 20% profit margin? That means that for every dollar that the bank makes (gross) it had to spend around 80 cents which leaves them with 20 cents profit (net). Grocery stores typically pull down around 13-15% profit margin... they have to pay 87 -85 cents for every dollar they make ( gross ) leaving them with 13-15 cents to pocket (net)... "But, But These Huge Evil Oil Companies are making BILLIONS of dollars!".... True, but they are also SPENDING billions of dollars to do so. Exxon made some 800 BILLION dollars last quarter ( gross ). They SPENT 792 BILLION dollars... thus leaving them with 8 billion left with which to finance exploration, research, and pay they stock holders. Oh, and by the way, its the STOCK HOLDERS that are making the profits... NOT the company. If you want to get in on the action you can BUY STOCK in Exxon or BP or Shell or any of the other companies that make that money.
So don't tell me that Exxon or BP are gouging prices and that we can FORCE them to lower prices by applying additional taxes or by taking "windfall taxes" from them. Can anyone tell me WHY that won't work? .... Anyone?
BECAUSE CORPORATIONS DON'T PAY TAXES! People do! Any cost that the oil companies incur WILL BE passed on to the consumer. Higher cost = higher price. Its that simple. Oh Oh Oh Oh, one last thing: No amount of boycotts will make the prices go down. Why is that? Lets imagine everyone decides to NOT buy gas on May 6th and 7th ( saturday and sunday). Sure no one buys any gas that weekend, but tell me what happens on monday? EVERYONE rushes to the gas stations to buy gas and the largely increased demand on these stations WILL result in a gas shortage which will inevitably cause the price to go EVEN HIGHER!
Does that make sense? Embargoes and boycotts only WORSEN the problem by causing an unnecessary shortage.
So, what can we do to lower the "great burden" or high prices at the pump? How about voting. Thats right. It is up to we Americans to put people in office that will do whats needed to remove the influence of the "Environmental Wackos" in Washington so that we can start drilling for out OWN oil and so that we can build MORE refineries so that the cost of producing oil will be less. THAT is the only way that gas prices will EVER come back down to "acceptable" levels again.
Now... that wasn't so hard, was it?
Ok, in case you didn't already know how economics works since you went to puplic school here's a quick lesson on supply and demand. When the demand for a product is greater than the supply of the product the price of the product goes up. There... was that so hard? Supply and demand is the MAIN factor in the price of gas. The demand for crude oil is much higher than the supply.. therefor the price of a barrel of oil is high... thats why its costing $75 per barrel right now. And the cost that the oil companies incur in purchasing the crude oil DIRECTLY affects the price that they have to CHARGE to cover said cost. High incurred cost = high charged price of gasoline and ALL OTHER PRODUCTS made from the crude. Not to mention the fact that we have a SEVERE shortage of refineries that can convert that crude into the miriade of other products that is made from "black gold." And don't make me mention the stiffling restrictions that the environmentalits and democrats have slapped on refineries ( like sulfer filteration and multiple fuel mixtures using ethanol and other expensive additives ) as well as drilling restrictions on our own soil (ANWR anyone?). That FORCES us to have to rely on very expensive foreign oil rather than on our OWN massive reserves in Alaska and off the coast of Florida.
Now... Let us assume that gas is 3.00 per gallon. By the time you remove the imbedded taxes ( state AND federal ) which comes to around 85 cents per gallon, the COST of the oil and refining and transportation which comes to nearly 2.00 per gallon, AND the price that the gas STORE charges us which is around 10 cents per gallon the oil company itslef makes ONLY 25 cents per gallon of 87 octane gasoline! That, again in case you are from the public school system, comes to LESS than 10% profit margin!
PROFIT MARGIN is the factor that we have to look at in determining how much these oil companies are actually making. Did you know that your local financial institution ( ie. Bank ) makes near 20% profit margin? That means that for every dollar that the bank makes (gross) it had to spend around 80 cents which leaves them with 20 cents profit (net). Grocery stores typically pull down around 13-15% profit margin... they have to pay 87 -85 cents for every dollar they make ( gross ) leaving them with 13-15 cents to pocket (net)... "But, But These Huge Evil Oil Companies are making BILLIONS of dollars!".... True, but they are also SPENDING billions of dollars to do so. Exxon made some 800 BILLION dollars last quarter ( gross ). They SPENT 792 BILLION dollars... thus leaving them with 8 billion left with which to finance exploration, research, and pay they stock holders. Oh, and by the way, its the STOCK HOLDERS that are making the profits... NOT the company. If you want to get in on the action you can BUY STOCK in Exxon or BP or Shell or any of the other companies that make that money.
So don't tell me that Exxon or BP are gouging prices and that we can FORCE them to lower prices by applying additional taxes or by taking "windfall taxes" from them. Can anyone tell me WHY that won't work? .... Anyone?
BECAUSE CORPORATIONS DON'T PAY TAXES! People do! Any cost that the oil companies incur WILL BE passed on to the consumer. Higher cost = higher price. Its that simple. Oh Oh Oh Oh, one last thing: No amount of boycotts will make the prices go down. Why is that? Lets imagine everyone decides to NOT buy gas on May 6th and 7th ( saturday and sunday). Sure no one buys any gas that weekend, but tell me what happens on monday? EVERYONE rushes to the gas stations to buy gas and the largely increased demand on these stations WILL result in a gas shortage which will inevitably cause the price to go EVEN HIGHER!
Does that make sense? Embargoes and boycotts only WORSEN the problem by causing an unnecessary shortage.
So, what can we do to lower the "great burden" or high prices at the pump? How about voting. Thats right. It is up to we Americans to put people in office that will do whats needed to remove the influence of the "Environmental Wackos" in Washington so that we can start drilling for out OWN oil and so that we can build MORE refineries so that the cost of producing oil will be less. THAT is the only way that gas prices will EVER come back down to "acceptable" levels again.
Now... that wasn't so hard, was it?
Tuesday, April 25, 2006
Nothing Mexican on Cinco De Mayo
“Nothing Gringo on May 1″ ...
I finally reached the end of my rope the other day when I read of yet another protest, a “Day Without Immigrants” boycott scheduled for May 1 that is also being marketed by activists as “Nothing Gringo on May 1.” Judging by the conversations I have had with friends and family, I know that many of you have had enough as well.
While there is not much that we can do on a local level to combat the illegal immigration problem except support like-minded elected officials with our dollars and our votes, I plan to do something that may make me feel just a little better. And I invite you to join me.
“Nothing Mexican on Cinco de Mayo”
This year, “Cinco de Mayo” (”the 5th of May”) falls on a Friday. Normally, I way be in my favorite Mexican restaurant ( Casa de Mexicana ) enjoying a “chimichanga del polo” and a huge glass of tea... This year, that ain’t happening.
For the most part, the holiday of Cinco de Mayo is a limited, regional holiday in Mexico, celebrated most vigorously in the state of Puebla where the Mexican militia repulsed a French invasion attempt in 1862. The holiday has actually become a bigger deal in the U.S. where commercial interests have promoted the holiday with products and services focused on Mexican food, beverages and festivities ( yet another commercially hyped holiday ala Christmas ).
This year, Cinco de Mayo will be a celebration of my hope that America will repulse the current invasion of illegal aliens. I will not patronize my favorite Mexican restaurant nor any other Hispanic-owned or “Mexican-themed” business on May 5 or the week thereafter. Neither will I employ the services of any company that I know to employ illegal aliens.
If you feel as frustrated and as voiceless as I do, please join me in my mini-protest and support America’s sovereignty with your dollars on Friday, May 5.
( Idea suggested by Bob Griggs )
