Comments on: Oil Executives Face the Big Bad Government

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By: Markus

Markus — Thu, 03 Apr 2008 12:25:23 +0000

You failed econ 101, if you think commodity market can “set” their profit margins. They are price takers which means their profit margin can change a lot depending on the market price for the good. And if have you really taken econ, you would also know that commodity market, such as oil, there should not be any profits, if the market is truly free (free entry and exit). If the market is truly free and if there are profits to be made, someone else could start an oil company and start producing oil.

If government stops tax breaks to these companies, and they respond by reducing supply to the market, that would be evidence of price manipulation by the companies.

We do agree on need to tax breaks for alternative energies. Well guess what, those tax breaks need to be financed somehow, such as removing tax breaks from industries that don’t need them.