But it won't. It will go to wasted projects like the 100 million bridge to nowhere and stuff like that.

That is the problem, we no longer have public works projects, we have political employment projects. Paying more for getting less. Putting more money into the system would not solve anything, it would just mean that more would be siphoned off into such projects.

The global energy market is too big for it to be actively manipulated. There are too many people involved and far too much money. It is sort of like the currency market nowadays. Governments once thought they could manipulate them, but as long as their currency is in the free market they can't.

The simple truth is that there is too many real problems in the energy market that are encouraging people to sock their money there. Energy seems to be the safest market currently. Until that changes, I wouldn't expect much of a change in energy prices.

Oh, want to hear a scary thing. Even with the high prices, according the today's WSJ, as a % of total household expense, we are still paying less for all energy costs then they did in 1980/81.

>>>Maybe yes. Maybe no. But are you ever going to see any benefit at all from that $1.80/gal you're donating to the new Gulfstream?

Several times over. There is the tax on the gasoline, plus Lehman brothers has to spend the money somewhere, which is taxed, and so forth and so on. And it will generally cycle faster than with government spending.

All about throughput.

I just don't buy it Soho, We have had laws on the books for regulating the energy commodities for 78 years up until 2000 when deregulation with the Enron loophole was put in the farm bill late at night. The fact that it was put in late at night tucked quietly in the farm bill should be a red flag to all of us. Regulation was indeed working all those 78 years. In 2000 the government was all together out of the oversight and regulating buisness of what these comapnies were up to and with the loophole it was now the governments responsibility to give reason to regulate instead of the other way around as in the pre Enron loophole days, the last 78 years. If it made no difference to deregulate the energy commodities then why did Senator Grassley secretly put it in a farm bill late at night? It smells to high heaven thats hes a lobbyist now. Why then since 2000 have the oil prices not reflected the true cost of a barrell of oil with global demand it should be at at 55 dollars a barrel today? We are now at 140 a barrel Something stinks here and its the corporate environment and billionare speculators buying congress to keep the Enron loophole open. From the hearing on c-span a 120 dollar barrell of oil split is 40- 40 -40... 40% to the costs of producing the oil 40% to the oil cartell and 40% to the speculators. Don't tell me it would make no difference if they closed the loophole. The experts testifying said in closing the loophole it would reduce the cost tommorow by 25%. Oh yes the oil is being manipulated and U.S. comapnies are in bed and set up in foreign countrys to avoid any U.S. law. We can change this lawlessness. Thats what regulation does, It keeps corporations from manipulating and we should start by closing the Enron loophole. Forget free market, We need a fair market.

Let's say you are a Saudi prince with four wives, 11 sons, who are each married to an average of 3 wives who have given you a total of 983 grand children who you want to carry on your name in style and propogate your genes. Do you
a) call for selling Saudi oil as fast as possible at as low a price as possible, investing the proceeds in US dollars that may or may not be sound in two decades
b) call for selling Saudi oil as slowly as possible to maximze the cash flow over all time, with the only constraint being sufficient current cash flow to keep you and your fellow princes in luxury and to bribe the rest of the Saudi people to prevent them from rising up and overthrowing the House of Saud.

If you pick b, and that price is $135 a barrel, and you are being attacked verbally and that might turn into a military attack, you put the blame elsewhere, on speculators, by claiming the supply/demand means the price should be $70.

In other words, if the US cuts back on its oil consumption to match the level of the EU with a larger population, the price of oil will fall to $70 for the long term, and you can live with that. But if the US insists on consuming oil as if each US citizen is a Saudi prince, then you will be happy to take $135-200 a barrel for oil.

There are no secrets here. Saudi Arabia can sell future oil contracts at any price they want because they have oil. They suffer no losses if the price of oil falls, but they lose money if the price rises further. They are betting the price will stay high because they aren't meeting the demand because they are greedy and want the highest price.

And sitting in one of your five luxury condos, you chuckle at the idiots like Bush who think they know the oil business, and that promoted selling as much of the oil in the US as they could for fire sale prices instead of holding on to it until the price is high enough to make selling it worthwhile.

PS, if the speculators are driving the price up from the Saudi set $110 a barrel to $135, when the demand falls back and the price collapses, the price will fall to $80 as the market is cleared of losing contracts, the deregulated hedge funds will lose billions, the Fed will need to bail out some bank, and then the price of oil will stabilize at $110.

Thanks Mulp for your post, Its so complicated to follow the money sometimes. You seem to have a much better understanding of this oil mess than I do but What if the demand does not fall back for a few years? Closing the Enron loophole would still be a part of the problem solved don't you think?
I couldn't help wondering if the Saudi's told Bush to take a hike maybe it was because they were charging us as they always had but with the speculators now taking in 40 percent of a 120 barrel of oil, the saudi's felt this was not thier problem because it wasn't of their making. And
thought something like...hey thats your American problem, we are just doing buisness how we have always done buisness, you made it easy with the enron loophole for the speculators to run roughshod on your own people so why blame us? I value your opinion Mulp on this issue.

The N.H. Union Leader
EDITORIAL
June 12, 2008

WHAT IS a "reasonable" corporate profiit? Is it 8 percent, 16 percent, 25 percent? What profit is unreasonable? Don't know? The Democratic majority in Congress thinks it does. And that should scare everyone.

Senate Republicans on Tuesday blocked a windfall profits tax proposal that would tax any "unreasonable" profit made by big oil companies. Yes, that word is actually in the bill. How is Congress to determine what level of profit is unreasonable? Well, that's the scary part. Would you let Congress determine what level of profit your business should make, and then confiscate the rest?
Editorial logo

Of course you wouldn't. But "Big Oil" is the bogeyman of the day, blamed by Democrats for high gas prices (when they aren't blaming Republicans in general and President Bush in particular). So the Democrats consider it fair game for unfair and unreasonable punishment by the government.

The truth, however, is that the case for this new tax is nonexistent.

First, oil company profits are not "unreasonable," however one might define that term. Oil and gas companies earn an average of 8.3 cents per dollar of revenue, compared to 7.8 cents for the Dow Jones average, the San Francisco Chronicle reported in April. And those huge oil company profits are big in dollar, but not percentage, terms.

Exxon-Mobil has earned more money than any other American company in the past five years. But last year, it's most profitable ever, its profit was only 10.9 percent of revenues, Fortune magazine reported last month. Bank of America's profits were 12.6 percent, Pfizer's were 16.8 percent, Coca-Cola's were 20.7 percent, Google's were 25.3 perccent, and Microsoft's were 27.5 percent. Whose profits are "unreasonable"?

While Exxon-Mobil was earning 10.9 percent profit last year, it paid 44 percent of its revenues in taxes, The Wall Street Journal's MarketWatch reported on Tuesday. Forty-four percent! The government took four times as much from Exxon-Mobil's revenues as shareholders did. "Big Oil" isn't paying its fair share? Hogwash.

You might also be interested to know that 52 percent of Exxon-Mobil's stock is owned by fund investors such as mutual and pension funds. That means you. If it is slapped with a windfall profits tax, your retirement plan might be the one paying the price.

And if all that weren't enough, there is the evidence from the 1980s. In 1980, President Jimmy Carter advocated and Congress imposed a windfall profits tax on oil companies. Guess what happened? Domestic oil exploration dropped, and the promised tax revenues did not materialize. It actually made us more dependent on foreign oil. Isn't that what Congress wants to prevent?

In their push to tax oil companies even more for the sole reasons that they have made record profits lately and the public wrongly suspects those profits of being responsible for high gas prices, Sen. Barack Obama and his Democratic Party are trying to move us back to the failed thinking of the late 1970s. That would be economically harmful, not helpful.

The idea that imposing confiscatory taxes on oil companies will somehow reduce the price of oil has no basis in fact. It shows the flawed economic thinking of a party that still assumes, despite all evidence to the contrary, that high taxes help the country, low taxes hurt, and the government can make everything better by asserting greater control.