Oil Company Execs Defend Profits to Senate

Ok, this was just the headline on Drudge, so I know you're not reading this here first:



This is absolute nonsense. Let's look:

Notice that the US DOJ has approved a whole lot of huge mergers in the past few years? Notice how the antitrust laws were used famously to breakup Standard Oil in the early 1900s?

"Your sacrifice appears to be nothing," Sen. Barbara Boxer, D-Calif., told the executives, citing multimillion-dollar bonuses the officials are receiving amid soaring prices at gasoline pumps and predictions of more of the same for winter heating bills.

But I respectfully disagree. You see, given a monopoly, or a relative one, prices for things like gasoline rise. They rise to a price that maximizes profits for the companies involved.

If your government on one hand allows companies to merge into many fewer companies, reducing all competition for prices in the marketplace, and then is confused by why there is price-gouging, then you can only say they are not thinking well. This is a natural outcome, and any other one is a government-regulated market. We have a tradition in this country of (a) ensuring competition in the market and (b) letting the market do its job.

So please, make changes to your own DOJ and its enforcement of the Sherman Antitrust Act, instead of complaining to executives at companies that are simply competing lamely in a market without enough competition.

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