It does not seem fair that we are paying through the nose for gasoline, yet oil companies are making a huge profit, does it now? According to President Obama and Harry Reid, the oil companies deserve to help us close the gap on our budget deficit. After all, it is only fair, correct?
The big flaw is this logic is the law of supply and demand. When you have limited supplies and high demand the middle man is making a killing. It is the nature of economics. If prices are artificially low, no matter who is the reason for the low price, and the demand remains constant, then the result will be a shortage. The rich will get even richer. The consumers will get left with even less while paying more. Forcing the oil companies to lower their prices, or to charge them more taxes will cause supplies to dwindle and prices will go even higher. Supplies will become more limited. This policy will only make environmentalists happy.
If Congress really wants to punish the oil companies, they should enact policies that will permanently increase supply. This will cause the prices to drop. It will then cut into the profits of the oil companies. Then the only vehicles on the planet that will be parked more are the leer jets of oil executives. What any company fears the most is more competition.
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