Down with the evil Gas lords II: Kaak's Revenge!

[Flubber]

Originally posted by Spiffor

Yes. My point is that the refining market is far from being a pure market (i.e. one where price competition is harsh on both sides). And thus, that market mechanisms do not accurately explain gas prices.

I think many people feel it (even among those whose political agenda would be to "let the market decide"), and that explaining to these people how a market works in order to put an end to the conversation, well, such behaviour misses the point.

I agree that pretty much any market that requires you invest several billion dollars to enter ( and would take YEARS for a new operation), is not exactly a "pure market".

However, I do not see how market mechanisms do not explain the general trend in gasoline prices. A necessary component of gasoline has increased greatly in price. Also over the last several years, some refining capacity closed (probably due to low profitability but thats just speculation on my part) and then the double whammy of Katrina-Rita damaged a significant chunk of capacity again.

The crude price increase HAD to result in increased gasoline prices. The reduction in refining capacity apparently has made refining reasonably profitable now and with capacity remaining tight, this situation might continue for a while. If it does, we could see new capacity come on stream IF there is a reasonable expectation of the profitability continuing.


Spiffor-- what would your solution be? Would you just nationalize key industries or would you go further to the abolition of all private property? How about regulated refining margins (Refiners might LIKE that since their profit leveks have been lower thanregulated industries like utilities)

[Lawrence of Arabia]

exxonmobile executive who just retired got $430 million severence package.

[Flubber]

Originally posted by Kidicious




Yeah because there aren't any billionaires. It's just rhetoric.

I never said that there were no billionares but a company like ExxonMobil (the target of choice in this thread) has thousands of shareholders, many of them pension funds representing thousands more. While some very rich people are there, a LOT of them are the "average joe" teacher, or nurse, or hospital staff or unionized plant worker.

So ya -- if you refer to earnings of a supermajor as "paying billionares" it IS just rhetoric

[Lawrence of Arabia]

i dont understand how you can justify 430 million severence pay.

[Flubber]

Originally posted by Lawrence of Arabia
exxonmobile executive who just retired got $430 million severence package.

I saw that (old news really) and on a personal level I find it to be way too much--- But thats not my choice and there are many baseball and basketball players that get similar levelsof compensation for doing much less.

Its a private business and if the shareholders think they are getting good value paying out sums like that, then that is their choice.

[GhengisFarbâ„¢]

Originally posted by Lawrence of Arabia
exxonmobile

There's an Exxonmobile?

Does it look anything like the batmobile?

[Lawrence of Arabia]

almost the same, but its green and has a tendency to sink when in alaska.

[Flubber]

Originally posted by Lawrence of Arabia
i dont understand how you can justify 430 million severence pay.

I don't . I also wouldn't feel any need to justify if they gave him a dollar-fifty and a shoeshine. Its an arrangement between two private parties . He was the head of the largest corp in the world so arguably is the "Michael Jordan" of the business world

[Kidlicious]

Originally posted by Flubber
Its an arrangement between two private parties . He was the head of the largest corp in the world so arguably is the "Michael Jordan" of the business world

It was once our money.

[Flubber]

Originally posted by Kidicious


It was once our money.

So was the money paid to ballplayers, or movie stars or the latest techno barbie doll.


But to me the question isn't what a company does with our money once we give it to them. Irrelevant in many ways . . .


You have already stated that a company's desire to make profit is irrelevant to you so why should you care if money is paid out to a CEO or to shareholders? If they paid this guy one hundred grand or 1.1 billion, it wouldn't change what they could charge for oil one little bit

[Kidlicious]

Originally posted by Flubber
So was the money paid to ballplayers, or movie stars or the latest techno barbie doll.

So that makes it ok?

But to me the question isn't what a company does with our money once we give it to them. Irrelevant in many ways . . .

I don't really know how to respond to this. You don't care what companies do with our money? Why do you participate in discussions about business and economics?

You have already stated that a company's desire to make profit is irrelevant to you so why should you care if money is paid out to a CEO or to shareholders? If they paid this guy one hundred grand or 1.1 billion, it wouldn't change what they could charge for oil one little bit

Oh boy! Those are my choices? I only get to choose between the millionaire CEO and the shareholders?

[Flubber]

Originally posted by Kidicious

So that makes it ok?

Yes and no. I don't personally see how one person can be worth that much money for their personal labour but that is the choice of the people paying them. Perhaps people should rail against the $10 admission to a movie or high concert prices or something.

Originally posted by Kidicious


I don't really know how to respond to this. You don't care what companies do with our money? Why do you participate in discussions about business and economics?

To aggravate you

No seriously- When I pay x for a carton of milk, I don't care how much the dairy farmer paid himself or his wife. If I perceive it as a fair price for milk, I pay it. Leave aside the fact that 450 million or whatever is , relatively speaking , an insignificant sum to ExxonMobil. It seems like such a huge number but it is a small fraction of 1 % of their annual revenue.

In a discussion about how GASOLINE prices are set, I don't see how its relevant how much or little a company pays its ceo. ExxonMobil gets the same price for its oil as the company with a ceo making 100K or the Mormon Oil Co-operative for that matter

Originally posted by Kidicious


Oh boy! Those are my choices? I only get to choose between the millionaire CEO and the shareholders?

No. Obviously a company can spend it on whatever they choose. For instance they could give a raise to Kaak's dad.

Seriously I'm not sure what your question is--Whetehr they give that 400+million to a ceo, or the shareholders or if they buy girl scout cookies with it--- none of these decisions will impact the price of gasoline. I think you know that-- its just that its a big flashy and outrageous number

[JohnT]

Perhaps people should rail against the $10 admission to a movie or high concert prices or something.

Well, to be honest this thread is about railing against the high price of gas.

Personally, I think the guy earned every single one of those dollars and I'm shocked, SHOCKED that XOM isn't giving him more.

[Flubber]

Originally posted by JohnT

Perhaps people should rail against the $10 admission to a movie or high concert prices or something.

Well, to be honest this thread is about railing against the high price of gas.

That was my point. Perhaps they should rails against other things where people are paid huge sums. In oil there is at least a reason why a higher price is needed to create enough profit on the higher-cost-to-produce barrells.


With a concert ticket, the fixed costs are relatively low and the high price is ALL about giving more money to the artist

[Spiffor]

Originally posted by Flubber
Spiffor-- what would your solution be? Would you just nationalize key industries or would you go further to the abolition of all private property?

I'm for the nationalization of essential industries (like drinkable water, electricity), and refineries belong to them.

I'm all for letting market mechanisms apply for non-essential goods and services (Ipods etc.)