04 May 2006

Big Overhead = Big Profits

The Left wants you think the oil companies are gouging citizens at the pump. The Right is pandering to the Left. It's bad when one party is demagoguing, it's exponentially worse when both parties demagogue.

It's quite simple folks, the reason oil profits are at record highs is because the cost of doing business is at a record high. Neal Boortz explained it best (I'm paraphrasing here)...when you have a product that costs $0.80 to produce, you sell it for $1.00, meaning a $0.20 profit and a 20% profit margin. When the product costs $1.60 to produce, what do you sell the product at to maintain that 20% profit margin?? The same thing is true of gas...when prices go up to do business and be profitable, the prices at the pump have to do likewise.

2 comments:

Dick in the Dirt said...

Exactly right. The market at work. The sooner we can get the President and the Congress out of the way -- out of our wallets and away from the pumps, the faster the consumer will resolve the issue.

Michael said...

Welcome back, Chris! And congrats on the wedding!

Getting government out of the oil equation altogether would be a major step in the right direction. Their taxes (obvious and embedded) add way too much to the price of oil from the wellhead to the pump to the cars that are running it.

It's not even a Left vs. Right issue (point of order here: there is no such thing as Left or Right in politics anymore) it's a government vs. everyone else issue. Shoot, the only real Leftists around anymore are Libertarians. The other guys are just socialists.