Point is, there's something wrong with the way people read oil prices. This allows for hyper-political sites like ThinkProgress to feed off the public's irrationality. In one article they write,
We can expect these companies, all of which rank in the top 10 of the “Fortune 500 Global Ranking,” to reveal billions of dollars more in profits, after earning $375 million in profits per day in 2011 ($261,000 per minute), and $368 million per day in the first three-months of 2012 — bringing their combined profits to $1 trillion from 2001 through 2011.The U.S. government rakes in a $1 trillion dollars a year, and they're not even global. I'm not sure why liberals should be more comfortable with that than oil profits. It's not like people in government aren't greedy. It's not like they're omniscient angels that both the ardent desire and know-how to spend money in everyone's best interest. It's not like they have a great track record. And it's not like the political left are very fond of government right now.
I think the answer is they're comparing what they think of as a realistic view of markets to an ideal view of government. In some perfect world government probably could spend a $1 trillion a year pretty well. I would spend it on fundamentally new infrastructure, basic R&D research, and the poor. But I shouldn't be comparing the private sector to what I would do if I were king. I should be comparing the real life private sector to real life government.
I'll give you one really important reason why I'm more comfortable with oil than government, because it comes from consensual transactions, not coercion.
And I know life without gasoline is hardly a choice. You try riding a bike to work these days (Hi January in Canada). But there's this crazy option nobody thinks about, you could drive less.
Ultimately I have to believe that that's what people do when gas prices go up. If people didn't drive less in response to higher prices, the prices would go up. And if they still didn't drive less, they'd go up again. And I know gas prices do go up (more than we'd like them to). But I mean they'd go up right at this moment. If we're really, truly, totally at the mercy of the oil industry, prices would consume every bit of every excess dollar. That would be the profitable thing.
But the truth is, we do have a choice. Maybe not to spend some minimum amount on gasoline that it takes to survive, but we spend a lot more than that. This is altogether different from the "consent" we give government. You know, where you can say, "no no no no I don't want this. Leave me alone. I'm not interested. For the millionth time no. Please put away that gun, don't throw me in jail" but actually you're saying, "yeah, I totally consent to paying taxes." Because social contract.
And by the way, oil doesn't make especially high profit margins suggesting that the market power of big oil is actually very limited (industries with the highest profit margins, Oil Company Earnings Reality over Rhetoric, Big Oil not as Profitable as People Think)
