Wednesday, April 23, 2008
Capitalism works like this ...
On his syndicated radio program today, Nashville-based talker Phil Valentine asked the following question (and I'm paraphrasing here):
Why do oil companies have to charge the prevailing market price for their goods?
With oil companies taking in record profits, I'm sure a lot of people are asking the very same question. "Can't they just lower their prices to give all us Ordinary Joes a break?" they ask. Well, here's a newsflash for such-minded folk: Publicly-owned businesses aren't in business to give anyone a break; they're in business to provide goods and services the public at large desires and - AND - make a profit.
That said, corporate directors have one primary job: to maximize profits so that their company's stock increases in value. A company can't do either of those things by selling the goods it produces at below-market prices. If'n that sounds like a bad thing to you, well, direct your Web-browser to the Communist Party's site and click the "join now" button.
With that off my chest, I'd like to tell ol' Phil this:
Any CEO or corporate board member who proclaimed that he or she wished to provide the goods produced by his or her company at prices below what the market dictated would face an immediate shareholder revolt ... and he or she would soon be looking for another job. And that's why you ain't gonna see any oil company selling gasoline below what the market is dictating.
So there.
Why do oil companies have to charge the prevailing market price for their goods?
With oil companies taking in record profits, I'm sure a lot of people are asking the very same question. "Can't they just lower their prices to give all us Ordinary Joes a break?" they ask. Well, here's a newsflash for such-minded folk: Publicly-owned businesses aren't in business to give anyone a break; they're in business to provide goods and services the public at large desires and - AND - make a profit.
That said, corporate directors have one primary job: to maximize profits so that their company's stock increases in value. A company can't do either of those things by selling the goods it produces at below-market prices. If'n that sounds like a bad thing to you, well, direct your Web-browser to the Communist Party's site and click the "join now" button.
With that off my chest, I'd like to tell ol' Phil this:
Any CEO or corporate board member who proclaimed that he or she wished to provide the goods produced by his or her company at prices below what the market dictated would face an immediate shareholder revolt ... and he or she would soon be looking for another job. And that's why you ain't gonna see any oil company selling gasoline below what the market is dictating.
So there.
# posted by Joltin' Django @ Wednesday, April 23, 2008 
Comments:
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It is amazingthat nations on the globe are becoming rich due to the oil they are selling. The US is sitting on piles of oil in the interior and off the coast and we are not doing anything with it because of Congress members who worship at Al Gore's front porch. If we had started drilling oil in Alaska when that was first discussed in the late 1990s, we would already be using millions of barrels of oil from that, and the US would be in a better position to try to influence what oil prices are trading at. We never learn.
# posted by 
: 23 April, 2008 15:07
: 23 April, 2008 15:07
IF WE HAD PUTIN IN THE OVAL OFFICE WE WOULD BE DRILLING FOR OIL EVERYWHERE AND ANYWHERE, AND WE WOULD BE RICH IN THE PROCESS, AND WOULDN'T BE PAYING 3.50 FOR GAS
There's a little more to it than just that. Oil companies can lower prices to increase sales. Car dealerships do it. Airlines do it. Shell could lower prices to be more competitive with BP, for example. Also, unlike other commodities, a lot of this oil is coming from federal land. We own that together. That should enter into the equation, as well.
I'm with whoever it was that said we need to just stop arms sales to oil rich countries, or adjust the price of an rpg or fighter jet, tank, etc, accordingly
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