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May 23, 2008

Laura Ingraham - It's Oil-Bashing Time Again

Today on the Laura Ingraham show, she spent some time discussing Senator Dick Durbin's attack on the oil companies. Dick Durbin, of course, is the senior senator from Illinois, and his tenure in Congress is a direct result of not enough people listening to my advice.

Durbin is upset about the high oil-company profits, which he thinks are the results of "price gouging". Now, I think the Senator is wrong, so I sent Bruce to the oil prices page at the Department of Energy web site, and had him chart the difference between the price of oil and the price of gasoline over the past few months. If there were any gouging going on, we ought to see a widening gap between the price of gasoline and the price of oil. If the oil companies were simply reaping a fixed percentage off the top, we should see the two prices moving in parallel. Instead, we see the price of oil rising faster than the price of gasoline.

So where do the profits come from? Let's look at gasoline inventories (another statistic available from the DOE web site). The blue line here shows what's happened during the current year.

There's a definite trend, which is straight down, and when inventories go down in an inflationary period, we get The Curse of Inventory Profits. In other words, the ledger shows a big gain, but the gain is an artifact of the accounting procedure which will disappear when the inventories are restocked.

If the real culprit in those high profits is dropping inventories, then it's worthwhile to ask who is responsible. On her show, Laura mentioned this editorial in Investor's Business Daily, in which the author chronicles all the things Congress has done to keep the oil supply down and strangle our refining capacity. So, in actual fact, the Big Oil profits, such as they are, can be laid at the feet of Dick Durbin himself.

Now, at this point, I might accuse Durbin of being in the pocket of Big Oil because he's boosting their profits. That, however, is a Keith Olbermann trick. I have no evidence that Durbin is getting under-the-table payments from oil companies or is holding a public tribunal to cover some secret agenda. Dick Durbin is simply stupid: he doesn't know what I know.

So, if you're from Illinois, there's something you can do to stop the continuation of government policies that make gasoline more expensive and force oil companies to spend millions of dollars lobbying for their own survival instead of looking for new ways to make us less dependent on foreign imports: don't re-elect this guy. He's running again in the fall, and if you don't vote him out now, we'll have six more years of policies that don't work.

Trust me. Unlike Senator Durbin, I've taken the time to figure out what's really going on.

Respectfully submitted,

Ferdinand T. Cat

# At Fri 1:24 AM | Permalink | Trackback URI | Comments (2) | More Laura Ingraham | Tags: charts conservative Democrats Dick Durbin economics gas prices gasoline Illinois inventory profits Keith Olbermann liberals oil prices

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Comments

Posted by: kimsch at May 23, 2008 3:51 PM

Posted by: Machiavelligz at May 24, 2008 8:47 PM