Big Oil v. Big Coffee

Mark Perry asks:

What's next? Congressional investigations to determine if coffee speculators are driving up prices? Allegations of "price gouging" at Starbucks? Investigations of "windfall profits" for "Big Coffee"?

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Business and Self-Regulation

Grass somehow manages to grow up through small cracks in the sidewalk. Similarly, the American private sector somehow seems to be exerting itself despite the vast expansion of government by the White House and Democratic Congress.

Case in point: The announcement last week by four oil companies - Chevron, ConocoPhillips, ExxonMobil and Shell - that they are setting up a $1 billion joint venture to design, build and operate a rapid-response system to contain spills as deep as and deeper than BP’s Deepwater Horizon disaster.

Their goal is a system that can start mobilizing within 24 hours of an oil spill. They hope to have it up and running within 18 months.

I suppose one might ask why oil companies didn’t do this before. But it seems a vivid contrast with the apparently hapless performance of the Minerals Management Service, recently renamed the Bureau of Ocean Energy Management, Regulation and Enforcement, which seems to have sat on out-of-date response plans for years and which was not able to call in equipment and personnel to respond to the April 20 BP spill for weeks or months...

Consider Underwriters Laboratories, founded in 1894, whose UL stickers come attached to regulator products. Or the Society of Automotive Engineers, founded in 1905, which sets standards for the automobile and other industries.

Government hasn’t had to step in because UL and SAE work well without them. Federal regulators couldn’t plug the BP well. The oil companies’ joint venture promises to be able to do so.

Another case in point, which is different and more diffuse: the “capital strike.” In the wake of the uncertainty raised by the Obama Democrats’ huge increase in regulations and pending increases in taxes, businesses are sitting on cash and not hiring, banks are buying Treasury bonds and not lending, investors are not investing and consumers aren’t buying. The economy languishes...

Two lessons seem apparent here. One is that private firms can do things government regulators can’t do. The other is that if you choke the golden goose enough, it stops producing eggs - and you have to get your hands off its neck.

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Oil in the Gulf

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A Year of Oil Prices

One year ago, on July 3, 2008, oil prices settled at a record high -- a once-unthinkable $145.29 a barrel

On Thursday, it settled at $66.73, less than half the record price, following a $2.58 decline.

In between, a global demand surge morphed into a global economic slowdown -- one that would drive the price of oil as low as $33.87 in December -- followed by the partial recovery that has been underway since.

A year ago, oil was driven higher by two factors. One was the emergence of new global economic powers such as China, India and Russia, competing with the United States and the West for the world's oil. The other was a weak dollar, the currency of crude trading.

read the CNN article

Tax Burden: Oil Companies v Bottom 50% of Taxpayers

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Who Owns teh Oil Companies?

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Cartoon: Windfall Profits