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Politics : Don't Blame Me, I Voted For Kerry -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (78663)	8/1/2006 4:14:55 PM
From: TimF	Read Replies (1) \| Respond to of 81568

Gouging is price-fixing, collusion, done in concert with all former competitors creating an illegal monopoly. Thank you. So your not using the legal definition, but as long as your definition is consistent I can just plug in "price-fixing" every time you say "gouging". Another trick they use is to create artificial shortages. This is proven on the Enron trader tapes. Enron dealt with much smaller and newer markets, where there was a highly perverse set of incentives created by the regulatory structure. Enron clearly cooked its books (and that's what brought them down). How much they manipulated prices is somewhat less clear but to the extent they did so they where enabled by the regulations to do things they couldn't have done in a really free market. OPEC is a cartel. They also are not subject to American antitrust law. They can operate as a cartel if they want to because such operation is legal under their laws and they haven't signed a treaty requiring them to forgo such activity. OTOH OPEC doesn't operate for the benefit of Exxon Mobil, or Shell or BP. Those companies have to pay the OPEC countries the full market price for oil. The current market price for oil request increased demand combined with a slower growth in supply, more than it reflects any operation of a cartel, but to the extent that a cartel does manipulate it, its the same old OPEC action that has gone on for decades. Also, notice that whenever the oil prices go down, you don't get the savings for a week. And then just a few pennies. But whenever the oil prices go up, the gas prices go up immediately, as much as possible. Companies always try to maximize their profits, and are reluctant to lower prices. So they don't drop prices right away, but over time competition forces them to do so. When the price of oil goes up the replacement cost for that oil goes up immediately and its normal to try and increase the price of the finished product. If there are a lot of good competing products, or if competitors for the same product don't have to pay the increased cost than normal market competition might force the producer to keep its prices steady and just eat the extra cost. But with oil and gasoline demand doesn't change rapidly with price increases, so the cost gets passed along. Again normal market operations, no collusion or cartel needed to explain that. If the oil price is manipulated by a sinister secret world wide conspiracy, how come its still lower in real terms than it was in the early 80s? Is the conspiracy incompetent?