Cue the cries of 'socialism' and willful ignorance of the fact that the Brits are living it up as our own 'free market' economy continues to tank.

The Pound just hit a 26 year high against the dollar a few months ago.

Link (new window)

81.5 percent of the cost there is tax. Who's gouging exactly?

Sounds something like Teddy Roosevelt, though I can't be sure.

Someone google "trust busting" from the turn of the 20th century.

Halfmast Trousers: Sounds something like Teddy Roosevelt, though I can't be sure.

"The Government must in increasing degree supervise and regulate...Such increased supervision is the only alternative to an increase of the present evils on the one hand or a still more radical policy on the other."

Shaggy_C:

In a word, fascism.

Which costs more, turning over the profits, or paying the fine?

eqtworld: Something tells me their margins are not outrageous.

Profits up 40% last year. Link This immediately after jacking up prices across the country. They needed it to meet the bottom line, right?

Hooray for the Westminster system

If you don't fine them more than the increase in their profit, they will simply regard it as part of the cost of doing business. You have to cut into the bottom line to accomplish anything. Cut their profits below zero for the year and then you'll see an impact in future years because they'll actually go "Oh shiat, we better not do this."

Capitalist1: Shaggy_C:

In a word, fascism.

"Fascism is an authoritarian political ideology (generally tied to a mass movement) that considers the individual subordinate to the interests of the state, party or society as a whole. Fascists seek to forge a type of national unity, usually based on (but not limited to) ethnic, cultural, racial, religious attributes. Various scholars attribute different characteristics to fascism, but the following elements are usually seen as its integral parts: patriotism, nationalism, statism, militarism, totalitarianism, anti-communism, corporatism, populism, collectivism, autocracy and opposition to political and economic liberalism."



"Franklin D. Roosevelt, president of the United States from 1933 to 1945, described fascism in his 1942 "Message from the President of the United States Transmitting Recommendations Relative to the Strengthening and Enforcement of Anti-trust Laws" as follows:

The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power."

Sounds more like modern day amerika to me.

Subby got it right: "In an event that would never happen in the US..."

And thank Allah for it. Oil, gas, and electricity moguls are making money because they're peddling the single most salable commodity in the world, ENERGY, not because they're crooked and taking advantage of the system. Take a look at ExxonMobile, the single most hated corporate entity the world over-- they make around 5 to 10 CENTS profit per gallon of gasoline sold. That isn't gouging, that isn't profiteering, that's simple economics. Their profit margins are unbelievably slim, but they continue to make a killing because the demand for what they sell hasn't waned a bit, DESPITE the rise in costs of production.

The idea that ANY government would go to a company and say, "You're making too much money, and even though you've done nothing illegal, you owe it to us and the rest of our people to give us that money back," IS socialism. I pray Subby REMAINS correct in his statement, and that it never happens here.

Capitalist1: In a word, fascism.

in a word, moron.

eqtworld: I would like to see the profit margin for this company averaged an and plotted on a graph over the last 10 years.

Something tells me their margins are not outrageous.

Unfortunately, most people aren't smart enough to understand the difference between PROFIT MARGIN and PROFIT. If they keep their margin the same and the cost of providing gas and elctricity rises,then the profit will rise in terms of dollars. To the uneducated this would be windfall profits or profiteering.

I am sure that Karl Marx would agree with the Hero tag for this one.

ayesee: Subby got it right: "In an event that would never happen in the US..."

And thank Allah for it. Oil, gas, and electricity moguls are making money because they're peddling the single most salable commodity in the world, ENERGY, not because they're crooked and taking advantage of the system. Take a look at ExxonMobile, the single most hated corporate entity the world over-- they make around 5 to 10 CENTS profit per gallon of gasoline sold. That isn't gouging, that isn't profiteering, that's simple economics. Their profit margins are unbelievably slim, but they continue to make a killing because the demand for what they sell hasn't waned a bit, DESPITE the rise in costs of production.

The idea that ANY government would go to a company and say, "You're making too much money, and even though you've done nothing illegal, you owe it to us and the rest of our people to give us that money back," IS socialism. I pray Subby REMAINS correct in his statement, and that it never happens here.

Since gas is approximately $3.25 a gallon and ExxonMobil is running at about a 10% profit margin, you might wanna rethink those maths.

If big oil would re-invest 5-10% of their profits into decentralizing refineries and increasing capacity, they could shut a good portion of their detractors down before they even start. The fact that they're unwilling to do this little should be a dead give-away that their only concern is profit uber alles.

And it's not so much that the government is saying, "You make entirely too much money." They're saying, "You're helping to tank our economy, and you're getting rich off it. Not so fast." Or do you think that governments have no business legislating against threats to stability?

KillTheStupid: Unfortunately, most people aren't smart enough to understand the difference between PROFIT MARGIN and PROFIT. If they keep their margin the same and the cost of providing gas and elctricity rises,then the profit will rise in terms of dollars. To the uneducated this would be windfall profits or profiteering.

They jacked up prices 15% in the same year that their overall profit rose 40%. If they were doing so well already, why the need for an increase in prices? Your attempt at obfuscation disappoints.

Compared to other world currencies, the dollar is going down like the Titanic. Although greedy-ass oil execs are partially to blame, the tanking economy is partial to blame. I the dollar was > the euro, we'd have 1.50/2.00 a gallon gas.

Keep funneling your cash to China, dumbasses.

And let's not forget that actual market competition amongst the oil giants is nigh-nonexistent, while gasoline is a necessary commodity to a very large percentage of all purchasers. Would you tolerate the kind of behavior from insulin suppliers or firefighting equipment manufacturers?

But please, use basic econ to try to defend Big Oil. It just gets funnier and funnier.

TheCid: Cut their profits below zero for the year and then you'll see an impact in future years because they'll actually go "Oh shiat, we better not do this."

Yes, you will see an impact in future years, just not the one that you think. If you take all of the profit from an entity (a corporation or a person), why would they continue to provide the goods or services that they were providing before?

Eventually, they'll just decide that it's not worth it and they'll go do something else. Then you'll have either government run utilities or utilities run by people who aren't qualified. Capatilism and free markets insure that jobs are filled by people who are the most suited for those jobs.

/If only we could make the election process more like the free market process.

Should be "these kinds of behavior". I need to stop typing until I get some alcohol in me.

/Hurray, it's my Friday!

ayesee: Subby got it right: "In an event that would never happen in the US..."

And thank Allah for it. Oil, gas, and electricity moguls are making money because they're peddling the single most salable commodity in the world, ENERGY, not because they're crooked and taking advantage of the system. Take a look at ExxonMobile, the single most hated corporate entity the world over-- they make around 5 to 10 CENTS profit per gallon of gasoline sold. That isn't gouging, that isn't profiteering, that's simple economics. Their profit margins are unbelievably slim, but they continue to make a killing because the demand for what they sell hasn't waned a bit, DESPITE the rise in costs of production.

The idea that ANY government would go to a company and say, "You're making too much money, and even though you've done nothing illegal, you owe it to us and the rest of our people to give us that money back," IS socialism. I pray Subby REMAINS correct in his statement, and that it never happens here.

I see your point, but it would be easier to agree with if it weren't for the fact that energy is not something we can reasonably choose to be without. We're over a barrel that way. They know this, and they know we know it, and it really wouldn't matter if they jacked up their prices 300%, we'd most likely still end up paying it because there's really no alternative to not having energy for your home or gas for your car.

Sure, some enterprising young entrepeneur might find a way to buck the system, but overall people are too busy just trying to run their own lives they don't have the time or wherewithal to find alternatives to outrageous fee increases and would likely suffer greatly at the hands of these companies.

I have no problem with government oversight of these types of companies. It's necessary for them to insure that the country doesn't come to a grinding halt because none of their citizens can afford the costs of running their homes or automobiles. If it were some non-essential item like a particular brand of computer software, I would be against government oversight, but I think in order to keep the engine that drives your economy running smoothly, they need to have a certain level of consumer protection.

TennesseeTuxedo: I have no problem with government oversight of these types of companies. It's necessary for them to insure that the country doesn't come to a grinding halt because none of their citizens can afford the costs of running their homes or automobiles.

+1 for sense.

In capitalist US, companies fark YOU!

But seriously, I think the companies here would rather pay the fine than return profits.

Living it up? Have you ever lived in the UK? Comparatively Healthcare sucks. Housing sucks. Transportation costs suck. For all the complaining they do, American middle class live much better than most if not all the world including all of Europe.

tbeatty: Living it up? Have you ever lived in the UK? Comparatively Healthcare sucks. Housing sucks. Transportation costs suck. For all the complaining they do, American middle class live much better than most if not all the world including all of Europe.

This move in the UK isn't about the middle class, it's about the poor. I think I would rather be poor in the UK than the US.

KillTheStupid: TheCid: Cut their profits below zero for the year and then you'll see an impact in future years because they'll actually go "Oh shiat, we better not do this."

Yes, you will see an impact in future years, just not the one that you think. If you take all of the profit from an entity (a corporation or a person), why would they continue to provide the goods or services that they were providing before?

Eventually, they'll just decide that it's not worth it and they'll go do something else. Then you'll have either government run utilities or utilities run by people who aren't qualified. Capatilism and free markets insure that jobs are filled by people who are the most suited for those jobs.

/If only we could make the election process more like the free market process.

If you take away all the profit for performing ACTION X, the company will no longer perform ACTION X. If that's artificially hiking prices on a product with inelastic demand, then good. It goes down to a more appropiate level.

They won't decide "it's not worth it to provide oil", they'll decide "it's not worth it to artificially gouge prices". By the looks of it, they would have made plenty of profit this year without hiking the prices up 15%. They should have done so.

Occam's Chainsaw: But please, use basic econ to try to defend Big Oil.

This argument is so easy that anyone with an understanding of basic econ should be able to grasp it.

If you think that Big Oil is charging too much then a) invent a new technology that does the same thing for less, b) ride a bicycle, or c) walk.

Would you tolerate the kind of behavior from insulin suppliers or firefighting equipment manufacturers?

Pick any good or service that you want and you can apply the same argument. People always have a CHOICE: Buy it or don't buy it. The things that (liberal) people like to lump under the heading "necessities of life" are ridiculous. Gas and oil are not necessities of life. Just ask the Amish.

Bad things will happen any time that a government tries to control prices. Their will be shortages, almost non-existent customer service and long lines. Look at what's happening in Venezuela right now.

It's easy. When you take away someone's incentive for doing ___________[INSERT ANYTHING HERE], they will stop doing ___________[INSERT SAME ANYTHING HERE]..

KillTheStupid: Gas and oil are not necessities of life. Just ask the Amish.

Facepalm!

Absolutely everybody I know who works in the oil biz agrees that prices are way, way above where they should be if it were only market forces.

But the commodity trading markets (NYMEX, etc.) are driven by emotion of the asshat oil traders. These traders never, ever take delivery, but they make a ton of money on the swings and they keep jacking it up and up every time Ahmadinejad farts.

U.S. Trading runs in the 600,000,000 barrels per day range on the Nymex alone.
U.S. Consumption runs in the 21,000,000 barrels per day range.

See what I mean? I wish I knew how to inject sensibility into the stupid markets.

I'm not sure what people think companies should do when the supply of X that they use rises. See, oil prices go up then energy and fuel costs go up so, for all you econ 101 drop outs, companies raise prices.

As long as oil is $100+ per barrel your gas and heating costs are gonna be high. You want gas prices to drop start calling China and India and gripe about all their economic development in the last 20 years and ask them to stop it.

/Nuclear power would have helped a bunch but the same folks who cry about "gouging" also hate nuclear power.
//Likely too late for nuke
///Likely to early for any other options
////Get used to it

ayesee: social

Uhmmm, you know that the UK is (supposedly) a Socialist country, right? You know the difference between Socialism and Communism, right?

Also, just a note to everyone else: GAS here means GAS (http://en.wikipedia.org/wiki/Gas), not GASOLINE! No one is discussing the cost / taxation on Petrol!

/the more you know

Chris...

Meanwhile, there are laws hindering the free market, for example when a hurricane flattens a town, and people show up with wood and generators and sell them for what the market would bear. But then the boot of government comes down on you.

Remember, it's only free market when you can buy the government.

Sir Cumference the Flatulent: Meanwhile, there are laws hindering the free market, for example when a hurricane flattens a town, and people show up with wood and generators and sell them for what the market would bear. But then the boot of government comes down on you.

Remember, it's only free market when you can buy the government.

I can't tell whether you're defending the people who exploit hurricane victims or pointing out that such an undesirable event is the natural consequence of a "free" market and therefore should be prevented.

Hopefully it's the latter.

Glasgowsfinest: tbeatty: Living it up? Have you ever lived in the UK? Comparatively Healthcare sucks. Housing sucks. Transportation costs suck. For all the complaining they do, American middle class live much better than most if not all the world including all of Europe.

This move in the UK isn't about the middle class, it's about the poor. I think I would rather be poor in the UK than the US.

Poor people in The United States can so much assistance that it isn't even funny. People are usually just too lazy to go about filling out paperwork and actually getting out of the house.

Brett Favre: Poor people in The United States can so much assistance that it isn't even funny. People are usually just too lazy to go about filling out paperwork and actually getting out of the house.

I seem to remember a story late last year about a congressman who tried to live for a week off the equivalent of food stamps or welfare or something (including not eating at Congress dinner parties and the like). I think he ended up with just cents left over? Basically, it didn't end very well at all.

Today, Americans pay an average of 45.9 cents in taxes per gallon of gas. The federal gas tax is 18.4 cents per gallon while the average state and local tax is 27.5 cents. These taxes pumped more than $54 billion into federal and state coffers last year alone. Diesel taxes totaled $9 billion more.

Almost all gas taxes are levied at a flat rate per gallon, regardless of whether a gallon of gas costs $1.49, $2.49, or $3.49. So while industry profits go through booms and busts, government profits grow steadily larger.

While politicians decry large corporate profits, those profits generate large corporate income-tax payments. We estimate that over the past 25 years, the major domestic oil companies paid about $518 billion in corporate income taxes to Uncle Sam and state governments. Oil companies pay billions more to governments in off-shore royalties, severance taxes, property taxes, and payroll taxes - and the list goes on.

The Govt. makes a hell of a profit too....but nobody says anything about that.

Shaggy_C: Cue the cries of 'socialism' and willful ignorance of the fact that the Brits are living it up as our own 'free market' economy continues to tank.

The United States does not have a pure free market economy. In fact, the government interference in the economy runs very deep.

America's present problems have arisen through the policies of the Bush government, and not market failures.

TheCid - it looks like we agree on how incentives and disincentives work. The disagreement lies in your belief in price gouging.

I beleive that there is no such thing as price gouging. Ever. If you don't like the price then don't buy it and use something else.

I live in Florida, and every time that we have a hurricane we get stupid news reporters standing in front of Home Depot showing the price of plywood. We run out of plywood almost immediately after the storm. Home Depot doesn't move as fast as it could to get more plywood here because there is no incentive to do so. The increased costs of express shipping and the headache of re-routing shipments from other areas to FL are not worth it for the same price. If they raise the price then they will have deal with people crying about price gouging.

The same thing goes for carpenters who went to New Orleans after Katrina. They were charging $50/hour for basic carpentry when the price before the storm was about $20/hour.

Q.- Why were people willing to pay that and not complaining about price gouging? A. - Because they really needed it and they were willing to pay for that service. If they thought that it was too expensive then they could have done it themselves or waited for more carpenters to arrive and for the price to drop.

It's easier to understand when the entity doing the "gouging" is a person standing right in front of you than it is when it is faceless corporation, but it is actually no different.

Elephantman: Today, Americans pay an average of 45.9 cents in taxes per gallon of gas. The federal gas tax is 18.4 cents per gallon while the average state and local tax is 27.5 cents. These taxes pumped more than $54 billion into federal and state coffers last year alone. Diesel taxes totaled $9 billion more.

Almost all gas taxes are levied at a flat rate per gallon, regardless of whether a gallon of gas costs $1.49, $2.49, or $3.49. So while industry profits go through booms and busts, government profits grow steadily larger.

While politicians decry large corporate profits, those profits generate large corporate income-tax payments. We estimate that over the past 25 years, the major domestic oil companies paid about $518 billion in corporate income taxes to Uncle Sam and state governments. Oil companies pay billions more to governments in off-shore royalties, severance taxes, property taxes, and payroll taxes - and the list goes on.

The Govt. makes a hell of a profit too....but nobody says anything about that.

You forget, they pay their CEOs in stock which generates capital gains tax at 19% instead of the 33% their millions should be taxed at. So with our government many trillion dollars in debt, they're gaming the system to rob us of money that could be paying that debt.

There shouldn't be a single tax on any income above $50k that goes DOWN until the debt is paid. The capital gains loophole should be closed ASAP. It's income, call it what it is and get the damn debt paid off.

KillTheStupid: This argument is so easy that anyone with an understanding of basic econ should be able to grasp it.

If you think that Big Oil is charging too much then a) invent a new technology that does the same thing for less, b) ride a bicycle, or c) walk.

You forgot d) develop and miniaturize cold fusion to power your car and e) learn how to teleport. If we're going to suggest nonsensical solutions, we might as well get 'em all in.

Seriously, what realistic short term solution do you have for someone with a 30 mile+ commute which incurs a lesser economic penalty than simply bending over and buying more overpriced gasoline? I'm already doing the more cost-effective behaviors of keeping my car tuned up, my delta-v low, and my tires in good condition to maximize gas mileage. Hint: developing new technology isn't cheap or short term, and walking 30+ miles a day isn't realistic.

KillTheStupid: Pick any good or service that you want and you can apply the same argument. People always have a CHOICE: Buy it or don't buy it. The things that (liberal) people like to lump under the heading "necessities of life" are ridiculous. Gas and oil are not necessities of life. Just ask the Amish.

Gasoline is a necessity for many in that its availability is directly tied to their ability to live and work, and the alternatives are unfeasible. This doesn't apply to soccer moms who "need" their Hummer or people who commute >10 mins. These are the individuals who have the options of use gas or be fired / be evicted / starve.

The Amish don't need gasoline because their lives aren't centered around it. They work, shop, and live within a radius of less than 20 miles. Strawman.

spamdog: KillTheStupid: Gas and oil are not necessities of life. Just ask the Amish.

Facepalm!

Hee Hee! I've been trying to come up with a worthy rebuttal to these comments, but I think it would be better to just allow him to continue posting on his own. It's really accomplishing much more than any response I could make.

/Whee! Let's all be Amishiathat'll show 'em!

dalbuc I'm not sure what people think companies should do when the supply of X that they use falls.

When the supply falls, the price *should* go up. It's the only fair way of resolving scarcity. What these whining, socialist lefties never consider is that if Exxon just gave away gasoline at $0.01/gal that would just mean more people who be wasting it in jet skis and hummers and every single day every gas station would be empty by about 10:00 am. Result: people who grow food wouldn't have the gas to get it to market.

Furthermore, here's a bit of economics 101 for my liberal friends: corporations do not keep their profits - if Exxon makes 100 brazilian dollars, every last cent of that money is paid out to shareholders. All of it. And the biggest investors in Exxon are pension plans. So when hillary says, "I want to take those profits" what she's really saying is, "I want to take money away from your pension plan"

KillTheStupid: TheCid - it looks like we agree on how incentives and disincentives work. The disagreement lies in your belief in price gouging.

I beleive that there is no such thing as price gouging. Ever. If you don't like the price then don't buy it and use something else.


Someone doesn't know what an inelastic demand is. Go take a real econ class instead of just repeating right-wing propaganda.

Ah, the Farkbot censors. Almost as much fun as a RickRoll.

tosbalok: Yeah, shareholders. Like the CEO who got $400 million for retiring.

Keep spewing the lies- they WANT you to think that the "liberals" are trying to take your money away.

Glasgowsfinest: tbeatty: Living it up? Have you ever lived in the UK? Comparatively Healthcare sucks. Housing sucks. Transportation costs suck. For all the complaining they do, American middle class live much better than most if not all the world including all of Europe.

This move in the UK isn't about the middle class, it's about the poor. I think I would rather be poor in the UK than the US.

Exactly. The U.K. and Europe are great places to be poor. Congratulations on your society's crowning achievement.

But anyway, this article is a stupid one to draw general inferences from - it's about public utilities, which have to be regulated anyway, since government -provided monopolies shelter them from market forces. There are no economics lessons to be taught here.

Occam's Chainsaw: Gasoline is a necessity for many in that its availability is directly tied to their ability to live and work, and the alternatives are unfeasible.

The alternatives are not unfeasible, just not very pleasant or easy.


TheCid: Someone doesn't know what an inelastic demand is. Go take a real econ class...

I'm sure that somewhere along my way to becoming a CPA that I took more than one economics class, so I fully understand inelasticity. When prices for gas get high enough and people start making the choice to use alternatives, whatever they may be, then we will see elasticity in the oil business.

instead of just repeating right-wing propaganda.

Registered Libertarian. Hate government interference in anything except military and roads.

Occam's Chainsaw: Seriously, what realistic short term solution do you have for someone with a 30 mile+ commute which incurs a lesser economic penalty than simply bending over and buying more overpriced gasoline?

Carpool (2x a month reduces your costs by 10%)
Split the drive between POV and public
Move closer

KillTheStupid: Registered Libertarian. Hate government interference in anything except military and roads.

Hurrr patrol!

YouPeopleAreCrazy:
Carpool (2x a month reduces your costs by 10%)
Split the drive between POV and public
Move closer

Like I said, alternatives exist, they just might be uncomfortable or - "gasp" - hard. I moved 25 miles closer to work. Not for the cost, because gas was only $1/gallon at the time, but because I was tired of sitting in traffic. Now I'd do it for the cost.

jso2897: Exactly. The U.K. and Europe are great places to be poor. Congratulations on your society's crowning achievement.

I wouldn't say it was the crowning achievement, but I would also say it's nothing to be ashamed of either. I like the idea of a fairer society.