kalm wrote: ↑Thu May 19, 2022 9:38 am
GannonFan wrote: ↑Thu May 19, 2022 8:57 am
Funny, the business I work in we don't stay in markets where we don't make at least a 25% profit margin. If we were just making 12% we'd get out of the business. So when government decides to institute a wind-fall profit tax, how do they decide how much money everyone should make?
Also, in the quote above from that progressive economic policy research group, why should "profit margins" be coming down? Isn't it possible that, given it was clear with the incoming administration that it would be a focus to eliminate fossil fuels, that these companies started to protect themselves from losing money and diversified elsewhere and also got rid of things that would cost them money? There's a reason why we don't really do much, if any, refining in this country anymore. The political headwinds have been obvious, so a decent company would've planned accordingly for that and protected their losses. Looking at profit margins only tells you if the business is managing their losses versus their revenues.
Agreed. So we really shouldn’t be complaining about gas prices. It’s all working how it’s supposed to.
Uh, no, we should, but the blame goes elsewhere. Oil companies didn't create massive inflation by themselves, or even at all. Inflation has been, and always will be, a money supply problem - too much money chasing too few goods and services. Don't need fancy economics for that, and the Fed and the government used to know that. But, we go ahead and drop $3T-plus into an already overheated economy already reeling from supply difficulties that were both pandemic related and how-we-responded to the pandemic related, and we let the Fed drag their feet for a good two years and lose sight of their major mission to counter inflation and here we are - on the brink of a recession and even people like Janet Yellen are now using the word "stagflation".
Is every company that raises their prices a price gouger? No, of course not. Is there a company out there somewhere who is price gouging? Of course there will be. But that's the problem with letting inflation out of the barn in the first place, it tends to become self-fulfilling and there's no easy way out of it except for economic retraction. The people in charge blew this one, big time. No need to be searching the weeds for scapegoats, government and the Fed are on TV plenty enough to know who they are.
