Posted on 01/27/2015 12:48:03 AM PST by Up Yours Marxists
A fair price for gas - or for anything - is the price point where supply equals demand.
Nuf ced.
Exactly. That’s why they’re doing it. They can afford to take the short term loss for the long term power play.
My theory is that the production exceeded demand for a long enough period (5 quarters?) that the speculators needed to dump their contracts that helped to restrict near term supply and drive up the price. a quarter at ~$50 would see if that is in fact a market clearing price for the open market.
My suggestion is for the feds to do their Constitutional duty. Tariff foreign oil trade heavily, not the citizens with an unconstitutional oil tax. Stop padding crony capitalist corporation pockets. Lift export restrictions while restricting imports whenever a surplus of Muslim crude gets poured into the country at a price well below minimum Muslim operating costs.
Then the US market will sort itself out without heavy political foreign influence. The japs did this for years with the auto industry and their artificial fascist financial doping of their economy. Good thing it backfired on their imperialistic butts.
It makes no sense to damage our refining and petrochemical industries by making our feedstock more expensive than other nation.
The US oil industry competes just fine with the rest of the world. Stop looking to government to ‘help’ private industry, selecting winners and losers in the market place.
We need to shrink the role of the federal government. Not grow it and it more taxes.
It might even be good for the oil patch. Entrepreneurs are born out of necessity. How many may take a second look at methodology or technology that suddenly makes financial sense when your back is against the wall?
America’s edge, if regulators can be brought to heel, is innovation, not oil extraction.
Mosf economists would agree: occasional contractions are eventually good for the firm, the industry, and the economy. With oil patch rolling in the tall clover for years, there were inevitably many marginal and inefficient producers surviving only because of inflated oil prices. After a significant contraction, most of the marginal producers will have gone by the wayside. But their rigs, workers, and leases will have been snapped up by more efficient, better capitalized businesses, so when oil prices recover, the industry that emerges will be stronger than the one at the beginning of the slump.
Survival of the fittest works in business as well as biology.
Your policy would guarantee the reverse.
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